Document:

EX-10(BG) SEPARATION AGREEMENT AND GENERAL RELEASE

 

Exhibit No. 10(BG)

SEPARATION AGREEMENT AND GENERAL RELEASE

1. This Agreement specifies the terms of the separation of CHARLES BERGEN CHOKEL
(“Employee”) from PROGRESSIVE CASUALTY INSURANCE COMPANY (“Progressive”).

In consideration of the payments noted in Paragraphs 3 and 4 below, Employee hereby releases
Progressive, its officers, directors, employees, parent, subsidiaries, affiliates, agents and
assigns (the “Progressive Entities”) from all actions, suits, claims, and demands in law or equity,
that Employee ever had or now has against any of the Progressive Entities, by reason of any matter,
cause, or thing, and particularly any claims relating in any way to Employee’s employment
relationship or the termination of Employee’s employment relationship with Progressive, including,
without limitation, any claim under the Age Discrimination in Employment Act, any claim arising
under any federal, state, or local law and any common law claim, but excepting those matters
described in Paragraphs 3 and 4 below.

2. Effective January 31, 2001 (the “Resignation Date”), Employee hereby resigns as an
officer and/or director of The Progressive Corporation, Progressive and of any Progressive
subsidiary or affiliate(s) as is confirmed by Employee’s signature on the resignation letter
attached hereto as Exhibit A and hereby agrees to execute all other documents and undertake any
other action(s) necessary to effect such resignations or any other matters necessary to complete
his obligations as an officer or director of Progressive or any of its affiliates. Employee agrees
to resign his directorships with Plymouth Rock Assurance Company, G & L Holding Group, Inc., Netrex
Holdings L.L.C. and any of Netrex’s subsidiaries or affiliates, and in any other company in which
Progressive has made an equity investment effective the Resignation Date, and to execute all other
documents and undertake any other action(s) necessary to effect such resignations. Although
Employee will remain employed by Progressive until the Separation Date (as defined below), he will
have no authority to make any commitments or representations or take any action on behalf of any of
the Progressive Entities or to bind any of the Progressive Entities in any way. Progressive,
accordingly, shall have no obligation to defend or indemnify Employee for any act or omission by
Employee after the Resignation Date.

3. In full consideration of Employee signing this Agreement and for the covenants
contained herein, Progressive hereby agrees to the following:

A. Employee shall remain an employee of Progressive through the Separation Date (as
defined below) and shall receive-for the period of time between the execution of this Agreement
and the Separation Date — salary in the amount of Two Thousand Dollars ($2,000), payable within
ten (10) days of the Separation Date. The Separation Date shall be the earlier of: (a) January
31, 2002; (b) the date on which Employee begins employment as an employee on the payroll of
another entity; or c) the date of a “Disqualifying Activity” as defined in Section 4B. below.

B. Within ten (10) days of Employee’s execution of this Agreement or upon the
dissolution of all applicable restraining orders, whichever is later, Employee shall be
paid a lump-sum payment of One Million Two Hundred Forty-four Thousand Dollars ($1,244,000)
(the “Severance Amount”), less all applicable withholding taxes.

C. Employee shall be paid for credited but unused Earned Time Benefit (“ETB”) hours
determined as of the Resignation Date. Such payment to be made within ten (10) days of the

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Resignation Date or upon the dissolution of all applicable restraining orders, whichever is
later. Employee agrees that Employee will not be entitled to accrue any ETB hours subsequent
to the Resignation Date.

4.

A. Notwithstanding anything to the contrary provided in any Non-Qualified Stock Option
Agreement (“NQSO Agreement”) heretofore entered into between Employee and Progressive, the
parties hereto agree that, subject to the conditions set forth in Paragraph 4B. below
concerning a “Disqualifying Activity,” if and to the extent that any Option Installment (as
defined below) of any non-qualified stock option (“NQSO”) heretofore granted to Employee by
Progressive under The Progressive Corporation 1989 Incentive Plan (the “1989 Plan”) or The
Progressive Corporation 1995 Incentive Plan (the “1995 Plan”) (collectively, the “Plans”) is
not vested and exercisable as of the Resignation Date, such Option Installment (i) shall remain
in effect with respect to fifty percent (50%) of the Common Shares of The Progressive
Corporation (“Common Shares”) covered thereby and, as to such Common Shares, shall vest and
become exercisable on the vesting date applicable thereto, as provided in the applicable NQSO
Agreement, and may be exercised by Employee in whole or in part at any time between such
vesting date and the expiration date applicable thereto (i.e., the tenth anniversary of the
date of grant), as provided in the related NQSO Agreement, and (ii) shall terminate, effective
as of the Resignation Date, with respect to the remaining fifty percent (50%) of the Common
Shares covered by such Option Installment. In the event that Employee shall engage in any
Disqualifying Activity, Employee shall forfeit all of his rights under this Paragraph and all
NQSOSs then held by Employee which were not vested as of the Resignation Date (regardless of
whether vested at the time of the Disqualifying Activity), shall immediately terminate and may
not thereafter be exercised in whole or in part. For purposes hereof, an Option Installment
shall mean any NQSO award included within a single grant which includes multiple NQSO awards,
each with a separate vesting date. Except as herein expressly provided, all NQSOS’s awarded to
Employee under the Plans will continue to be governed by all of the terms and conditions of the
Plans and applicable NQSO Agreement.

B. Employee shall forfeit his rights under Paragraph 4A. if Employee participates in
any “Disqualifying Activity” as defined below:

Disqualifying Activity — means any of the following acts or activities
committed during the period beginning on the Resignation Date and ending January 31,
2004 (the “Restriction Period”):

• directly or indirectly serving as a principal, shareholder, partner, of
officer, employee or agent of, or as a consultant, advisor or in any other capacity
(other than as a Director) to, any insurance carrier other than Progressive with more
than 1.5% market share of the U.S. market for private passenger automobile insurance as
of December 31, 1999 as reported by A.M. Best and specifically listed on the attached Exhibit B. This clause shall not apply if Employee
becomes an employee of one of the entities listed on Exhibit B solely as a result of
actions beyond Employee’s control—such as an acquisition not initiated by Employee of
an entity with a smaller market share then employing Employee by one of the listed
companies; or

• any disclosure by the Employee, or any use by the Employee for his own
benefit or for the benefit of any other person or entity (other than Progressive, its
parent or its

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subsidiaries), of any confidential information or trade secret of Progressive or its subsidiaries (as defined herein) to an extent deemed material by
Progressive; or

• any violation of Paragraphs 2, 5, 8 or 10 of this Agreement; or

• making any other disclosure or taking any other action which is materially
detrimental to the business, prospects or reputation of Progressive, its parent or its
subsidiaries. The direct ownership of less than 10% of the outstanding voting shares
of a publicly traded corporation which competes with Progressive or its subsidiaries
shall not constitute a Disqualifying Activity.

5.    Employee shall not, during the Restriction Period, hire or solicit to hire any of
Progressive’s then current employees (other than Employee’s spouse), either directly or indirectly,
to work for Employee or any other entity. This prohibition is not intended, nor shall it be
construed, to prohibit any future employer of Employee from hiring anyone in the normal course of
its business without assistance from Employee; but, rather, is intended to cover and shall only be
construed to prohibit actions of Employee.

6.    With the exception of the rights and benefits contained in this Agreement, Employee:
(a) waives any and all rights Employee now has or might hereafter have acquired to, and
acknowledges the forfeiture of, any and all “NQSOs” under the Plans which are not vested as of the
Resignation Date; and (b) waives any rights Employee may now have or would have had under
Progressive’s 2001 Gainsharing Program, The Progressive Corporation 2001 Executive Bonus Plan, The
Progressive Corporation 1999 Executive Bonus Plan, The Progressive Corporation Separation Allowance
Plan and to any other compensation or bonus Employee may have received had Employee remained
employed by Progressive. Other than is provided for in paragraph 3, Employee shall not be entitled
to any compensation as a Progressive employee after the Resignation Date, including, but not
limited to, NQSOs granted under the Plans and any other bonus or incentive payment(s).

7.    Employee’s rights relating to vested, but unexercised NQSOs shall be determined in
accordance with the provisions of the Plans and applicable NQSO Agreement(s) between Progressive
and Employee, and as is specified in those agreements, the last available date for exercise by
Employee of any vested NQSOs shall be sixty (60) days after the Separation Date. Employee’s rights
(if any) under the Executive Deferred Compensation Program (the “Program”) shall be determined in
accordance with the governing provisions of the Program.

8.    Employee hereby agrees that neither Employee nor any person, organization, or other
entity acting on Employee’s behalf will communicate or permit to be communicated, either directly
or indirectly, any information regarding the financial terms of this Agreement except to Employee’s counsel, Employee’s spouse, Employee’s accountant, a
prospective employer, financial institutions when needed to demonstrate Employee’s personal
financial condition, or to any court involved in any action brought by either party to enforce the
terms of this Agreement.

9.    Employee agrees and acknowledges that this Agreement is not and shall not be construed
to be an admission of any violation of any federal, state, or local law, regulation or of any duty
Progressive owed Employee and that the execution of this Agreement is a voluntary act to provide
conclusion to Employee’s employment relationship with Progressive.

10.    Employee agrees that Employee will maintain the confidentiality of confidential
information which Employee has received by virtue of Employee’s employment with Progressive and
will

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refrain from using such information or disclosing it to anyone other than Progressive or its
employees. For purposes of this Agreement, confidential information is information which
Progressive endeavors to keep confidential, including, without limitation, customer lists, employee
lists, rate schedules, underwriting information, the terms of contracts and policies, marketing
plans, program designs, trade secrets, Progressive’s internal electronic mail distribution lists
and addresses, proprietary information, and any such information provided by a third party to
Progressive in confidence. Employee represents that upon Employee’s separation, Employee will
return to Progressive any documents in Employee’s possession containing confidential information of
Progressive or documents or other items which are the property of Progressive.

11.    Any notices or matters regarding this Agreement shall be made to Progressive’s Chief
Legal Officer, Charles E. Jarrett by mail to 300 North Commons Boulevard, Mayfield Village, Ohio
44143, by facsimile transmission to (440) 395-0280 or by
electronic mail to GOTOBUTTON BM_1_
Chuck_Jarrett@Progressive.com or to Employee at his home address.

12.    Employee has read and understands all of the terms of this Agreement. Employee signs
this Agreement in exchange for the consideration to be given to Employee. Neither Progressive nor
its agents, representatives, or employees have made any representations to Employee concerning the
terms or effects of this Agreement other than those contained in the Agreement. This Agreement
contains the entire agreement between Employee and Progressive and supercedes all prior or
contemporaneous discussions or agreements.

13.    The terms of this Separation Agreement and General Release are separate and
independent and should any of them be declared invalid or unenforceable by any court, the remaining
provisions and terms of this Agreement shall remain in full force and effect.

14.    This Agreement shall be governed and interpreted in accordance with the laws of the
State of Ohio. Any dispute arising under the terms of this Agreement shall be resolved by binding
arbitration in Cuyahoga County, Ohio in accordance with the rules of commercial arbitration of the
American Arbitration Association. In any such arbitration proceeding, the tribunal may award only
compensatory damages and is not empowered to award punitive or exemplary damages, but shall award
reasonable attorneys’ fees to the prevailing party.

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EMPLOYEE HAS READ AND UNDERSTANDS ALL OF THE TERMS OF THIS AGREEMENT AND EMPLOYEE HAS BEEN
ENCOURAGED TO CONSULT WITH AN ATTORNEY. EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS BEEN GIVEN
A PERIOD OF TWENTY-ONE (21) DAYS TO REVIEW THIS AGREEMENT WITH AN ATTORNEY AND CONSIDER ITS
EFFECT, INCLUDING EMPLOYEE’S RELEASE OF RIGHTS AND SEPARATION. EMPLOYEE ALSO ACKNOWLEDGES
THAT EMPLOYEE HAS SEVEN (7) DAYS FOLLOWING EXECUTION OF THIS AGREEMENT TO REVOKE THIS
AGREEMENT FOR ANY REASON AND IS HEREBY ADVISED THAT THIS AGREEMENT SHALL NOT BECOME
EFFECTIVE OR ENFORCEABLE UNTIL THE EXPIRATION OF THE SEVEN (7) DAY REVOCATION PERIOD.

IN WITNESS WHEREOF, the parties have executed this Agreement this 23 day of February, 2001

	 	 	 	 	 	 	 
	 	 	CHARLES BERGEN CHOKEL	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Witness	 	 
	 	 	 	 	PROGRESSIVE CASUALTY INSURANCE COMPANY
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Witness:	 	 

 - 5 -EX-10(CA) FORM OF EXEC DEFERRED COMP PLAN

 

Exhibit No. 10(CA)

The Progressive Corporation

Executive Deferred Compensation Plan

Performance-Based Restricted Stock Deferral Agreement

THIS DEFERRAL AGREEMENT is entered into pursuant to the provisions of The Progressive
Corporation Executive Deferred Compensation Plan (“Plan”). All capitalized terms in this Agreement
shall have the meanings ascribed to them in the Plan.

1. Deferral Election. I hereby elect to defer receipt of all Performance-Based Restricted Stock
Awards
granted to me in 2006 under The Progressive Corporation 2003 Incentive Plan. This election shall
become effective as of the date the restrictions applicable to such Awards (or portion thereof)
expire
and shall not apply to any Award (or portion thereof) that fails to vest free of all restrictions.

2. Method of Distribution. I hereby elect that any distribution of the balance of the Deferral
Account established pursuant to this Agreement made on account of Termination of Employment be paid
as follows: (Select one)

	 	•	 	Single Lump Sum Payment
	 
	 	•	 	Three Annual Installments
	 
	 	•	 	Five Annual Installments
	 
	 	•	 	Ten Annual Installments

I understand that Plan distributions made for reasons other than Termination of Employment will be
made in a single lump sum payment, unless the Plan provides otherwise. I understand that I may
change the method of distribution elected above only if and to the extent permitted by the Plan.

3. Investment of Deferral Account. I understand that each amount credited to the Deferral Account
established pursuant to this Agreement shall be deemed to be invested in The Company Stock Fund
until the day it is distributed. I also understand that this deemed investment is merely a device
used to determine the amount payable to me under the Plan and does not provide me with any actual
rights or interests in any particular funds, securities or property of the Company, any Affiliated
Company or the Trust or in any stock of The Progressive Corporation. I also understand that my
right to receive distributions under the Plan makes me a general creditor of the Company with no
greater right or priority than any other general creditor of the Company.

4. Miscellaneous. I understand that this Agreement is subject to the terms, conditions and
limitations of the Plan, as in effect from time to time, in all respects and that, except as
expressly permitted by the Plan, all elections made in this Agreement are irrevocable. I
acknowledge that I have received, read and understand the Plan Description dated December, 2005
relating to the Plan. I agree to accept as final and binding all decisions and interpretations of
the Committee relating to the Plan, the Trust and this Agreement.

ALSO, I UNDERSTAND THAT THE PLAN IS LIKELY TO BE AMMENDED IN SIGNIFICANT RESPECTS FOLLOWING
MY EXECUTION OF THIS AGREEMENT. I AGREE TO BE BOUND BY ALL SUCH AMENDMENTS AND BY ANY CHANGES
SUCH AMENDMENTS MAY REQUIRE IN THE TERMS AND CONDITIONS OF THIS AGREEMENT.

NAME OF ELIGIBLE EXECUTIVE:

EMPLOYEE ID:

DATE:

Your electronic submission of this Election Form will create a date/time stamp and serve as
your signature.

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