Document:

<PAGE>

Exhibit No. 10(B)

                           THE PROGRESSIVE CORPORATION
                   2005 INFORMATION TECHNOLOGY INCENTIVE PLAN

1.    The Progressive Corporation and its subsidiaries ("Progressive" or the
"Company") have adopted The Progressive Corporation 2005 Information Technology
Incentive Plan (the "Plan") as part of their overall compensation program for
employees assigned to the Company's Information Technology Organization ("IT
Organization").

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

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

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

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

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

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

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

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

                                       1
<PAGE>

      Notwithstanding the foregoing, if the sum of the regular, used Earned Time
Benefit, sick, holiday and funeral pay received by a participant for a Plan year
exceeds his/her salary range maximum for that Plan year (determined as of the
end of the 24th pay period), then his/her Paid Earnings for that Plan year shall
equal his/her salary range maximum, plus any of the following items received by
such participant for that Plan year: (a) overtime pay and (b) retroactive
payments of regular, used Earned Time Benefit, sick, holiday, overtime and
funeral pay.

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

8.    In the discretion of the Designated Officers, participants in this Plan
may also participate in The Progressive Corporation 2005 Gainsharing Plan, or
any successors thereto.

9.    The IT Performance Factor

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

      For 2005, and for each Plan year thereafter until otherwise determined by
the Designated Officers, the applicable Plan rules shall be as set forth in
Schedule I attached hereto.

      The best possible score in any given week is 10 points per application (or
a total of 200 points). Attached hereto as Schedule II is the 2005 Performance
Matrix with the breakdown of scores and related outcomes. For 2005, a target of
1.00 will be achieved by earning between 10,024 and 10,027 points out of a
possible 10,400 points. The Designated Officers will establish the applicable
performance targets, the performance scores that will be awarded for various
point levels achieved and the maximum potential points that may be earned and
the resulting performance score for subsequent Plan years.

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

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

                                       2
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

                                       3
<PAGE>

19.   This Plan supersedes any and all prior plans, agreements, understandings
and arrangements regarding bonuses or other cash incentive compensation payable
to participants by or due from Progressive and relating to the availability of
computer systems. Without limiting the generality of the foregoing, this Plan
supersedes and replaces The Progressive Corporation 2004 Information Technology
Incentive Plan (the "Prior Plan"), which is and shall be deemed to be terminated
as of January 1, 2005 (the "Termination Date"); provided, that any bonuses or
other sums earned and payable under the Prior Plan with respect to any Plan year
ended on or prior to the Termination Date shall be unaffected by such
termination and shall be paid to the appropriate participants when and as
provided thereunder.

20.   This Plan is adopted, and is to be effective, as of January 2, 2005, which
is the commencement of Progressive's 2005 fiscal year. This Plan shall be
effective for the 2005 Plan year (which coincides with Progressive's 2005 fiscal
year) and for each Plan year thereafter unless and until terminated by the
Committee.

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

                                       4
<PAGE>

                                   SCHEDULE I

                      INFORMATION TECHNOLOGY INCENTIVE PLAN
                                   2005 RULES

1. SYSTEM MEASUREMENTS

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

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

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

                                       5
<PAGE>

<TABLE>
<CAPTION>
             SYSTEM                       ADDITIONAL OUTAGE CLARIFICATIONS
--------------------------------    --------------------------------------------
<S>                                 <C>
Cash Disbursements (CDS)            An outage is defined for
                                    Monday through Friday as any time the system
                                    is not available by 7 am. An exception would
                                    be any requested Saturday or Sunday access
                                    requested by the system owner 24 hours in
                                    advance.

Claims CARS

Claims Decision Point

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

                                    In addition, they are scheduled for an "as
                                    needed" maintenance window on the second
                                    Thursday of the month from 3:30am until
                                    6:00am. An outage for start of day, for the
                                    Thursday maintenance window, would be any
                                    time PACMan is not available by 6:00am.

Claims Web Tracker

Claims Workbench (CWB) /
ClaimStation

Commercial Auto (PRAT/WFC)

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

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

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

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

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

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

Personal Progressive

Ownership Work Bench (OWB)

POLARIS Billing System / ProBill    An outage for the start of day is defined as
                                    any time the POLARIS transactions are not
                                    available by 6:00am Monday through Friday.
                                    On Saturday, Agent Bank (S6) and Common EFT
                                    (S7) perform weekly file maintenance. An
                                    outage on Saturday will be defined as any
                                    time either of these 2 transactions are not
                                    available by 8:00am.

Policy Services Work Flow (POWR)    An outage is defined as any time their
                                    scanning system is totally unavailable (both
                                    locations down) for more than 30 minutes
                                    excluding their daily batch window between
                                    midnight and 4:00am EST.

ProRater Uploads
</TABLE>

                                       6
<PAGE>

<TABLE>
<S>                                 <C>
PROTEUS (Atlantic, Gulf,            An outage for start of day is defined as
Midwest, Pacific)                   anytime the 30 minute back-up occurs after
                                    6:00am, or causes the application to be
                                    unavailable over 30 minutes.

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

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

2. CUSTOMER RETENTION

An outage impacting 100 or more customers is defined as:

      E-mails are sent multiple times to the same person

      EFT (electronic fund transfers) incorrectly occur multiple times

      Bills are sent to the wrong person

      Billing is incorrect by more than $ 1.00

      Documents are retransmitted (post office, fax or email) for any of the
      conditions below:

            A. Print was incorrect

            B. Forms were missing

            C. Forms were sent in error

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

3. AVAILABILITY OF AN APPLICATION

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

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

4. VENDOR SERVICE OUTAGES

Vendors are a critical component to our service delivery. We deal with 2 types
of vendors, Transaction Service Vendors (Equifax, Choicepoint, Discover, State
MVR Centers, etc.) and Infrastructure Vendors (IBM, MCI, Microsoft, Oracle,
etc.). It is the responsibility of the appropriate I/T group to manage and
evaluate the quality of service received from these vendors.

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

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

5. SLOW RESPONSE TIME

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

                                       7
<PAGE>

6. SCHEDULED MAINTENANCE

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

7. IT PERFORMANCE AND RETENTION POINT VALUES

IT Performance

Any day without an outage will be awarded points. Point values are weighted to
correspond with the value to the business based upon the volume of transactions.
The maximum number of points earned per week is 10 points per application
defined in Rule #1. The point value by workday is as follows:

<TABLE>
<CAPTION>
           DAY                 POINTS
---------------------------    ------
<S>                            <C>
Monday                          2.0
Tuesday                         2.0
Wednesday, Thursday, Friday     1.5
Saturday                        1.0
Sunday                          0.5
</TABLE>

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

IT Customer Retention

Outages that negatively affect customers will be assessed a loss of 1.0 point
per incident defined in Rule #2.

8. COMMUNICATIONS OF STATUS

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

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

9. APPEAL PROCESS

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

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

10. EARNED POINTS CHART FOR 2005

The attached 2005 Earned Points Chart correlates annual points earned to the IT
Performance Factor.

                                       8
<PAGE>

                                                                     SCHEDULE II

                     INFORMATION TECHNOLOGY INCENTIVE PLAN
                            2005 EARNED POINTS CHART

<TABLE>
<CAPTION>
   ANNUAL POINTS EARNED
--------------------------
MINIMUM            MAXIMUM            IT PERFORMANCE FACTOR
-------            -------            ---------------------
<S>                <C>                <C>
     0               9,505                    0.00
 9,506               9,506                    0.01
 9,507               9,512                    0.02
 9,513               9,518                    0.03
 9,519               9,524                    0.04
 9,525               9,530                    0.05
 9,531               9,536                    0.06
 9,537               9,542                    0.07
 9,543               9,548                    0.08
 9,549               9,554                    0.09
 9,555               9,557                    0.10
 9,558               9,558                    0.11
 9,559               9,564                    0.12
 9,565               9,570                    0.13
 9,571               9,576                    0.14
 9,577               9,582                    0.15
 9,583               9,588                    0.16
 9,589               9,594                    0.17
 9,595               9,600                    0.18
 9,601               9,606                    0.19
 9,607               9,609                    0.20
 9,610               9,610                    0.21
 9,611               9,616                    0.22
 9,617               9,622                    0.23
 9,623               9,628                    0.24
 9,629               9,634                    0.25
 9,635               9,640                    0.26
 9,641               9,646                    0.27
 9,647               9,652                    0.28
 9,653               9,658                    0.29
 9,659               9,661                    0.30
 9,662               9,662                    0.31
 9,663               9,668                    0.32
 9,669               9,674                    0.33
 9,675               9,680                    0.34
 9,681               9,686                    0.35
 9,687               9,692                    0.36
</TABLE>

                                       9
<PAGE>

<TABLE>
<S>                 <C>                       <C>
 9,693               9,698                    0.37
 9,699               9,704                    0.38
 9,705               9,710                    0.39
 9,711               9,713                    0.40
 9,714               9,714                    0.41
 9,715               9,720                    0.42
 9,721               9,726                    0.43
 9,727               9,732                    0.44
 9,733               9,738                    0.45
 9,739               9,744                    0.46
 9,745               9,750                    0.47
 9,751               9,756                    0.48
 9,757               9,762                    0.49
 9,763               9,765                    0.50
 9,766               9,766                    0.51
 9,767               9,772                    0.52
 9,773               9,778                    0.53
 9,779               9,784                    0.54
 9,785               9,790                    0.55
 9,791               9,796                    0.56
 9,797               9,802                    0.57
 9,803               9,808                    0.58
 9,809               9,814                    0.59
 9,815               9,817                    0.60
 9,818               9,818                    0.61
 9,819               9,824                    0.62
 9,825               9,830                    0.63
 9,831               9,836                    0.64
 9,837               9,842                    0.65
 9,843               9,848                    0.66
 9,849               9,854                    0.67
 9,855               9,860                    0.68
 9,861               9,866                    0.69
 9,867               9,869                    0.70
 9,870               9,870                    0.71
 9,871               9,876                    0.72
 9,877               9,882                    0.73
 9,883               9,888                    0.74
 9,889               9,894                    0.75
 9,895               9,900                    0.76
 9,901               9,906                    0.77
 9,907               9,912                    0.78
 9,913               9,918                    0.79
 9,919               9,921                    0.80
 9,922               9,922                    0.81
 9,923               9,928                    0.82
 9,929               9,934                    0.83
 9,935               9,940                    0.84
</TABLE>

                                      10
<PAGE>

<TABLE>
<S>                 <C>                       <C>
 9,941               9,946                    0.85
 9,947               9,952                    0.86
 9,953               9,958                    0.87
 9,959               9,964                    0.88
 9,965               9,970                    0.89
 9,971               9,973                    0.90
 9,974               9,974                    0.91
 9,975               9,980                    0.92
 9,981               9,986                    0.93
 9,987               9,992                    0.94
 9,993               9,998                    0.95
 9,999              10,004                    0.96
10,005              10,010                    0.97
10,011              10,016                    0.98
10,017              10,023                    0.99
10,024              10,027                    1.00
10,028              10,028                    1.01
10,029              10,030                    1.02
10,031              10,033                    1.03
10,034              10,035                    1.04
10,036              10,037                    1.05
10,038              10,040                    1.06
10,041              10,043                    1.07
10,044              10,046                    1.08
10,047              10,049                    1.09
10,050              10,051                    1.10
10,052              10,052                    1.11
10,053              10,055                    1.12
10,056              10,058                    1.13
10,059              10,061                    1.14
10,062              10,063                    1.15
10,064              10,066                    1.16
10,067              10,069                    1.17
10,070              10,072                    1.18
10,073              10,075                    1.19
10,076              10,077                    1.20
10,078              10,078                    1.21
10,079              10,081                    1.22
10,082              10,084                    1.23
10,085              10,087                    1.24
10,088              10,089                    1.25
10,090              10,092                    1.26
10,093              10,095                    1.27
10,096              10,098                    1.28
10,099              10,101                    1.29
10,102              10,103                    1.30
10,104              10,104                    1.31
10,105              10,107                    1.32
</TABLE>

                                      11
<PAGE>

<TABLE>
<S>                 <C>                       <C>
10,108              10,110                    1.33
10,111              10,113                    1.34
10,114              10,115                    1.35
10,116              10,118                    1.36
10,119              10,121                    1.37
10,122              10,124                    1.38
10,125              10,127                    1.39
10,128              10,129                    1.40
10,130              10,130                    1.41
10,131              10,133                    1.42
10,134              10,136                    1.43
10,137              10,139                    1.44
10,140              10,141                    1.45
10,142              10,144                    1.46
10,145              10,147                    1.47
10,148              10,150                    1.48
10,151              10,153                    1.49
10,154              10,155                    1.50
10,156              10,156                    1.51
10,157              10,159                    1.52
10,160              10,162                    1.53
10,163              10,165                    1.54
10,166              10,167                    1.55
10,168              10,170                    1.56
10,171              10,173                    1.57
10,174              10,176                    1.58
10,177              10,179                    1.59
10,180              10,181                    1.60
10,182              10,182                    1.61
10,183              10,185                    1.62
10,186              10,188                    1.63
10,189              10,191                    1.64
10,192              10,193                    1.65
10,194              10,196                    1.66
10,197              10,199                    1.67
10,200              10,202                    1.68
10,203              10,205                    1.69
10,206              10,207                    1.70
10,208              10,208                    1.71
10,209              10,211                    1.72
10,212              10,214                    1.73
10,215              10,217                    1.74
10,218              10,219                    1.75
10,220              10,222                    1.76
10,223              10,225                    1.77
10,226              10,228                    1.78
10,229              10,231                    1.79
10,232              10,233                    1.80
</TABLE>

                                      12
<PAGE>

<TABLE>
<S>                 <C>                       <C>
10,234              10,234                    1.81
10,235              10,237                    1.82
10,238              10,240                    1.83
10,241              10,243                    1.84
10,244              10,245                    1.85
10,246              10,248                    1.86
10,249              10,251                    1.87
10,252              10,254                    1.88
10,255              10,257                    1.89
10,258              10,259                    1.90
10,260              10,260                    1.91
10,261              10,263                    1.92
10,264              10,266                    1.93
10,267              10,269                    1.94
10,270              10,271                    1.95
10,272              10,274                    1.96
10,275              10,277                    1.97
10,278              10,280                    1.98
10,281              10,283                    1.99
10,284              10,400                    2.00
</TABLE>

                                      13<PAGE>

Exhibit No. 10(C)

                       2005 PROGRESSIVE CAPITAL MANAGEMENT
                                   BONUS PLAN

1.    The Progressive Corporation and its subsidiaries (collectively
      "Progressive" or "Company") have adopted the 2005 Progressive Capital
      Management Bonus Plan ("Plan") as part of their compensation program for
      the Company's investment professionals. The Plan is performance-based and
      is administered under the direction of the Compensation Committee of the
      Board of Directors of The Progressive Corporation ("Committee").

2.    Progressive employees who are assigned primarily to the Company's capital
      management function are eligible to be selected for participation in the
      Plan. Eligible employees may be selected by the Chief Executive Officer
      ("CEO") and Chief Human Resource Officer ("CHRO"), acting jointly
      (collectively, the "Designated Executives") to participate in the Plan for
      one or more Plan years. Participants may also participate in other
      gainsharing, bonus or incentive compensation plans maintained by
      Progressive, if so determined by the Designated Executives. Plan years
      shall coincide with Progressive's fiscal years. For 2005, and each Plan
      year thereafter until otherwise determined by the Designated Executives,
      the following individuals will be entitled to participate in the Plan:
      William Cody, David Benson, Anthony Grandolfo, Dominic Visco, Eleanora
      Crosby, Nhu Bragg, Joseph Zhu-Carnevale and Sandy Richards. Other eligible
      employees of the Company may be selected for participation in the Plan for
      or at any time during a Plan year by the Designated Executives. In such
      cases, the Designated Executives will determine whether the newly selected
      participant will be eligible to receive a Portfolio Performance Bonus, to
      participate in the Discretionary Bonus Pool or both and the Target
      Percentage and other terms of participation which will be applicable to
      such participant.

3.    The Plan offers participants the opportunity to earn bonus compensation
      through two (2) separate components: the Portfolio Performance Component
      and the Discretionary Bonus Pool Component, as described in Sections 4 and
      5 below ("Bonus Components"). The term "Annual Bonus," as used herein,
      shall mean the aggregate of all bonuses earned by or awarded to a
      participant under the two (2) Bonus Components.

4.    The Portfolio Performance Component

      A.    The amount of the Portfolio Performance Bonus earned by any
            participant under the Plan for any Plan year will be determined by
            application of the following formula:

            Portfolio Performance Bonus = Paid Earnings x Target Percentage x
            Portfolio Performance Factor

      B.    For purposes of the Plan, "Paid Earnings" shall include (a) regular,
            used Earned Time Benefit, sick, holiday, funeral and overtime pay
            received by the participant during the Plan year for work or
            services performed by the participant during the Plan year as an
            officer or employee of Progressive, and (b) retroactive payments of
            any of the foregoing relating to the same Plan year.

                                       1
<PAGE>

            For purposes of the Plan, Paid Earnings shall not include any (a)
            short-term or long-term disability payments, (b) lump sum merit
            awards, (c) payments from the merit cash pool, (d) discretionary or
            other bonus or incentive compensation awards, (e) the earnings
            replacement component of any worker's compensation award or (f) any
            unused Earned Time Benefit. If an additional participant is added
            during the course of a given Plan year, his or her Portfolio
            Performance Bonus will be based on the portion of his or her salary
            earned during the part of the Plan year during which he or she
            participated in the Plan.

            Notwithstanding the foregoing, if the sum of the regular, used
            Earned Time Benefit, sick, holiday and funeral pay received by a
            participant for a Plan year exceeds his/her salary range maximum for
            the Plan year (determined on an individual pay period basis as of
            the end of the 24th pay period), then his/her Paid Earnings for that
            Plan year shall equal his/her salary range maximum, plus any of the
            following items received by such participant for that Plan year: (a)
            overtime pay, and (b) retroactive payments of regular, used Earned
            Time Benefit, sick, holiday, overtime and funeral pay relating to
            that Plan year.

      C.    The Target Percentages for participants in the Plan shall be
            determined by the Committee, but will not exceed 125% for any
            participant. Target Percentages may vary among Plan participants and
            may be changed from year to year by or under the direction of the
            Committee. For 2005, and each Plan year thereafter until otherwise
            determined by the Committee, the Target Percentages for the Plan
            participants shall be as follows:

<TABLE>
<CAPTION>
       Name               Target Percentages
--------------------      --------------------
<S>                       <C>
William Cody                     100%
David Benson                     100%
Anthony Grandolfo                100%
Dominic Visco                   30.0%
Eleanora Crosby                18.75%
Nhu Bragg                      11.25%
Joseph Zhu-Carnevale           11.25%
Sandy Richards                   6.0%
</TABLE>

      D.    Portfolio Performance Factor

            The Portfolio Performance Factor is determined by comparing the
            actual performance of designated segments of Progressive's
            investment portfolio ("Portfolio Segments") against the
            risk-adjusted returns of specified external benchmarks ("Investment
            Benchmarks").

            The applicable Portfolio Segments, the weighting of the applicable
            Portfolio Segments for any participant, the related Investment
            Benchmarks and the funds, investments or indexes which comprise the
            Investment Benchmarks will be designated, and may be changed from
            year to year, by or under the direction of the Committee.

                                       2
<PAGE>

            The Portfolio Performance Factor is based on the Plan year
            performance of each designated Portfolio Segment of Progressive's
            investment portfolio. Investment results are marked to market in
            order to calculate total return, which is then compared against the
            risk-adjusted return(s) of the designated Investment Benchmark (or
            the investments that make up such Benchmark) to produce a
            Performance Score for the applicable Portfolio Segment.

            For 2005, and for each Plan year thereafter until otherwise
            determined by the Committee, for purposes of the Plan, performance
            shall be measured on the basis of a single Portfolio Segment: the
            fixed income portfolio ("Fixed Income Portfolio").

            Fixed Income Portfolio. At the conclusion of a Plan year, the
            returns achieved by the various investments that comprise the
            selected Investment Benchmark for the Fixed Income Portfolio will be
            risk-adjusted through application of the Modigliani & Modigliani
            formula for measuring risk-adjusted performance ("Modigliani
            Formula") in accordance with the provisions of Exhibit I hereto, and
            ranked according to their respective risk-adjusted returns for the
            Plan year. In applying the Modigliani Formula to the Investment
            Benchmark for the Fixed Income Portfolio, risk-adjusted returns are
            calculated using the standard deviation of three years of quarterly
            returns (i.e. 12 data points).

            The investment performance achieved by the Fixed Income Portfolio
            for the Plan year will then be compared against the risk-adjusted
            returns of the various investments which comprise the applicable
            Investment Benchmark to determine where the Fixed Income Portfolio's
            performance falls when compared to the risk-adjusted returns of the
            investments which comprise the Investment Benchmark ("Performance
            Ranking"). The Portfolio Performance of the Fixed Income Portfolio
            is determined by its Performance Ranking for the Plan year.

            The method to be used to calculate Interpolated Values, Linear
            Performance Targets and the Portfolio Performance Factor for
            purposes of this Plan is attached hereto as Exhibit II.

            Performance of the Fixed Income Portfolio shall be measured against
            the risk-adjusted return(s) of any one, or a combination of any two
            or more, of the following Investment Benchmarks, or such other
            benchmark or benchmarks, as shall be designated by the Committee for
            the designated Plan year:

                  Rogers Casey Intermediate Fixed Income Funds

                  Rogers Casey Limited Duration Fixed Income Funds

                  Lehman Intermediate Corp./Gov. Index

            The applicable Investment Benchmark(s), or combination thereof, will
            be selected, and may be changed on an annual or quarterly basis, by
            or with the approval of the Committee. For 2005, and for all
            subsequent Plan years until

                                       3
<PAGE>

            otherwise determined by the Committee, the performance of the Fixed
            Income Portfolio will be measured against the Rogers Casey
            Intermediate Fixed Income Funds benchmark. In the event that
            different Investment Benchmarks are applicable to different
            quarterly periods within a given Plan year, the quarterly
            performance results will be combined and the arithmetic mean of such
            results will equal the Performance Score for the Plan year.

            The Portfolio Performance Factor for any participant can vary from 0
            to 2.0, based on actual performance versus the pre-established
            Investment Benchmarks.

5.    Discretionary Bonus Pool Component

      A.    For each Plan year, a pool of bonus money will be objectively
            determined and made available to the CIO to distribute among
            designated participants in his or her sole discretion, subject to
            approval by either the CEO, CHRO or the Chief Financial Officer. The
            Designated Executives shall designate the individuals, if any, who
            are eligible to participate in the Discretionary Bonus Pool for a
            given Plan year. For 2005, and each Plan year thereafter until
            otherwise determined by the Designated Executives, the eligible
            participants for the Discretionary Bonus Pool will be David Benson,
            Anthony Grandolfo and Dominic Visco, as well as any other
            participants who may be so designated by the Designated Executives
            during the course of a Plan Year. The CIO is not obligated to
            disburse all of the funds in the bonus pool, and may not disburse
            more than the value of the pool. Undisbursed funds will not be
            carried over to future years.

      B.    The Discretionary Bonus Pool is based on the Fixed Income Portfolio
            performance and is calculated by adding the product of each
            participant's Paid Earnings multiplied by the target percentage
            designated by the Designated Executives for the purpose of
            determining the amount of the Discretionary Bonus Pool (not to
            exceed 20%), multiplied by the performance score of the Fixed Income
            Portfolio, which can range from 0 to 2. The Discretionary Bonus Pool
            will be calculated using the amount of salary actually paid to
            eligible participants during the course of the Plan year.

6.    After the end of each Plan year, and after the investment results have
      been determined and Benchmark data for such Plan year have become
      available, the bonuses earned by each participant pursuant to the
      provisions of Sections 4 and 5 of this Plan will be calculated and then
      aggregated to determine the Annual Bonus earned by each participant in the
      Plan. Subject to the following paragraph and Paragraph 7 below, the Annual
      Bonuses for a Plan year will be paid to Plan participants as soon as
      practicable thereafter, but no later than March 15th of the following
      year.

      Any Plan participant who is eligible to participate in The Progressive
      Corporation Executive Deferred Compensation Plan ("Deferral Plan") may
      elect to defer all or any portion of his or her annual Portfolio
      Performance Bonus otherwise payable under this Plan, subject to and in
      accordance with the terms of the Deferral Plan. Bonuses based on the
      Discretionary Bonus Pool Component are not eligible for deferral under the
      Deferred Plan.

                                       4
<PAGE>

7.    Unless otherwise determined by the Committee, and except as otherwise
      provided herein, in order to be entitled to receive an Annual Bonus for
      any Plan year, the participant must be an active employee of Progressive
      on the last day of such Plan year ("Qualification Date"). Any participant
      who is on a leave of absence covered by the Family and Medical Leave Act
      of 1993, personal leave approved by the Company, military leave or short
      or long-term disability on the Qualification Date relating to any Plan
      year will be entitled to receive an Annual Bonus for the Plan year based
      on the Paid Earnings received by the participant during the Plan year.
      Annual Bonus payments made to participants will be net of any legally
      required deductions for federal, state and local taxes and other items.

8.    If, for any Plan year, an employee has been selected to participate in
      both this Plan and another incentive plan offered by the Company, then
      with respect to such employee, the Portfolio Performance Bonus formula set
      forth in Paragraph 4 hereof will be appropriately adjusted by applying a
      weighting factor to reflect the proportion of the employee's total annual
      incentive opportunity that is being provided by this Plan. The Designated
      Executives shall have full authority to determine the incentive plan or
      plans in which any employee shall participate during any plan year and, if
      an employee is selected to participate in more than one plan, the
      weighting factor that will apply to each such plan.

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

10.   The Plan will be administered by or under the direction of the Committee.
      The Committee will have the authority to adopt, alter, amend, modify and
      repeal such rules, guidelines, procedures and practices governing the Plan
      as it, from time to time, in its sole discretion deems advisable.

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

      Unless otherwise determined by the Committee, all of the authority of the
      Committee hereunder (including, without limitation, the authority to
      administer the Plan, select the persons entitled to participate herein or
      with respect to the various Bonus Components provided for herein,
      interpret the provisions hereof, waive any of the requirements specified
      herein and make determinations hereunder and to establish, approve, change
      or modify Bonus Components, Component weightings, Investment Benchmarks,
      Performance Targets and Target Percentages) may be exercised by the
      Designated Officers, acting jointly. If either of said officers is
      unavailable or unable to participate, or if either of such positions are
      vacant, the Chief Financial Officer may act instead of such officer.

                                       5
<PAGE>

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

12.   The Plan will be unfunded and all payments due under the Plan will be made
      from Progressive's general assets.

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

14.   Progressive shall have the unrestricted right to set off against or
      recover out of any bonuses or other sums owed to any participant under the
      Plan any amounts owed by such participant to Progressive.

15.   This Plan supersedes all prior plans, agreements, understandings and
      arrangements regarding bonuses or other cash incentive compensation
      payable or due to any participant from Progressive with respect to the
      performance of Progressive's investment portfolio. Without limiting the
      generality of the foregoing, this Plan supersedes and replaces the 2004
      Progressive Capital Management Bonus Plan (the "Prior Plan"), which is and
      shall be deemed to be terminated as of January 1, 2005 (the "Termination
      Date"); provided, that any bonuses or other sums earned and payable under
      the Prior Plan with respect to any Plan year ended on or prior to the
      Termination Date shall be unaffected by such termination and shall be paid
      to the appropriate participants when and as provided thereunder.

16.   This Plan is adopted and, is to be effective, as of January 2, 2005, which
      is the commencement of Progressive's 2005 fiscal year. This Plan shall be
      effective for the 2005 Plan year (which coincides with Progressive's 2005
      fiscal year) and for each Plan year thereafter unless and until terminated
      by the Committee.

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

                                       6
<PAGE>

                                    EXHIBIT I

 METHOD USED TO CALCULATE THE BONUS COMPENSATION FOR PCM FIXED INCOME PORTFOLIO

The Portfolio Performance Factor used to determine the bonus component of PCM
compensation depends on the ranking of the PCM Fixed Income Portfolio Segment's
total return for the Plan year compared to the respective risk-adjusted total
returns of its peers from the Rogers-Casey survey of Intermediate Fixed Income
Fund managers ("R-C Survey"). Because the R-C Survey is only conducted
quarterly, we must use quarterly data for a return's standard deviation. The
annual returns are calculated from the 4 quarterly returns of the year, but the
standard deviation calculation is derived from the most recent 12 quarters (3
years) and converted to annual terms. A fund must have return data for all 12
quarters to be included in the comparison sample.

To calculate the ranking of PCM returns relative to the returns of the fund
managers in the R-C Survey, we adjust the individual R-C fund managers' returns
to match the risk of the PCM Fixed Income Portfolio Segment by applying the
Modigliani & Modigliani (M2) formula. Thus, the raw PCM return and the
risk-adjusted PCM return will be identical, while the individual R-C fund
manager returns will be adjusted according to how much risk each has undertaken
relative to PCM. The formula and definitions are set forth below:

RA Return (fund) = [STDpgr/STDfund] * [Raw Return (fund) - Rf] + Rf

      STDpgr = Sample Standard Deviation of PCM Quarterly Returns (Annualized)
      for 3 Years (i.e., 12 data points)

      STDfund = Sample Standard Deviation of R-C Fund Manager's Quarterly
      Returns (Annualized) for 3 Years (i.e., 12 data points)

      Raw Return (fund) = Total Return of Individual R-C Fund Manager for 4
      Quarters (Annual return)

      Rf = "Risk-free rate" 90-day LIBOR Rate at Beginning of Each Quarter for 4
      Quarters (Annual return)

<TABLE>
<S>                                                     <C>
Example 1:                                              Example 2:
Fund had more risk than PCM                             Fund had less risk than PCM

STDpgr = 15%                                            STDpgr = 15%
STDfund = 20%                                           STDfund = 10%
Raw Return (fund) = 8%                                  Raw Return (fund) = 8%
Rf = 4%                                                 Rf = 4%

RA Return (fund) = [15% / 20%]*[8% - 4%] + 4%           RA Return (fund) = [15% / 10%]*[8%-4%] + 4%
RA Return (fund) = 7%                                   RA Return (fund) = 10%
Because the fund was riskier,its RA return is lower     Because the fund was less risky, its RA return is higher
</TABLE>

                                       7
<PAGE>

                                   EXHIBIT II

  METHOD USED TO CALCULATE INTERPOLATED VALUES, LINEAR PERFORMANCE TARGETS AND
                          PORTFOLIO PERFORMANCE FACTOR

Once all the M2 returns are calculated, the data is sorted in descending order
from highest to lowest risk-adjusted return. From here, the process to compute
the Portfolio Performance Factor is employed.

INTERPOLATED VALUES FOR SETTING TOP AND BOTTOM 5% LEVELS

The top 5% and bottom 5% risk-adjusted total return rankings are computed based
on the total number of participants, excluding the PCM return. For example, if
there were 90 participants, the return required to earn a 2.0 portfolio
performance factor would be determined by interpolating between the fourth and
fifth firm's returns, since 5% of 90 = 4.50. The same procedure would be used to
determine the 0.0 portfolio performance factor.

The total returns, computed by Investment Accounting, for the interpolated
positions are calculated as follows (ex. 90 survey participants):

Interpolated= Member 4 return - ((Member 4 Return- Member 5 Return)*0.50)
Member 4 = 5.30%
Member 5 = 5.10%

Member 4.5 (Interpolated Value) = 5.30% - ((5.30%-5.10%)*0.50) = 5.20%

Once the two groups are computed, top and bottom 5%, the remainder of the
Portfolio Performance targets are calculated as follows:

Portfolio Performance target variance = (2.00) / Number of positions from first
participant after the top 5% ranking to the 1st participant in the bottom 5%
ranking. In the case of 90 participants, the number of positions to divide the
2.00 performance factors by would be 83.

The calculation for the Portfolio Performance target variance from 2.00 - 0.00
would be:

2.00 / 83 = .024096 per position for the 90 participant level.

                                       8
<PAGE>

In the case of a tie in risk-adjusted total returns between participants, each
participant will have the same Portfolio Performance Factor. The next lowest
position would then be stepped down by a factor based on the number of
participants who tie. In the case of a tie between two firms, the step down will
be twice the Portfolio Performance target variance to maintain the proper
stepping to the 0.00 Portfolio Performance Factor level.

Example: If member return number 5 and 6 each had the same score in the 90
participant example, then 5 and 6 would have a Portfolio Performance Factor of
1.97504, which is 2.00 - .024096. The number 7 position in this example would
have a Portfolio Performance Factor of 1.926848, which is the required step down
from 5 to 7.

In addition, if the returns are tied between the interpolated value set for the
2.00 Portfolio Performance Factor and any position below the 2.00 level, those
lower positions will also be set to a 2.00 Portfolio Performance Factor. The
step down factor in the Portfolio Performance targets will work similarly as
noted in the example above. For the last 5% group, all firms with risk adjusted
total returns equaling the last interpolated total return value would have the
same Portfolio Performance Factor as the interpolated value, all others in the
last 5% group would have a 0.00 Portfolio Performance Factor.

Once all the Portfolio Performance targets have been created, from 2.00 to 0.00,
PCM's return is compared to the rankings to determine its Portfolio Performance
Factor. If the PCM return is not in the top or bottom 5% and does not match the
return of any participant, the Portfolio Performance Factor is an interpolated
value between the firms with the next highest and next lowest returns.

The interpolation computation for the Portfolio Performance Factor based on
PCM's return is as follows:

Portfolio Performance Factor of return below PCM return + (PCM's Return - Return
below PCM) / (Return above PCM - Return below PCM) * (Portfolio Performance
Factor of return above PCM - Portfolio Performance Factor of return below PCM)

For the 90 participants example, the calculation of PCM's Portfolio Performance
Factor is: 1.8554 + ((5.47-5.32) / (5.63-5.32) * (1.8795-1.8554) = 1.867061

                                       9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}]]