8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)       December 14, 2007    

THE PROGRESSIVE CORPORATION

(Exact name of registrant as specified in its charter)

Ohio	1-9518	34-0963169
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

6300 Wilson Mills Road, Mayfield Village, Ohio	44143
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code       440-461-5000    

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

     (e) On December 14, 2007, the Board of Directors of The Progressive Corporation (the “Company”) approved the plans described below. These amendments and restatements of existing plans, each of which becomes effective on January 1, 2008, are principally intended to modify or add provisions that are required or permitted by Section 409A of the Internal Revenue Code and the rules recently promulgated thereunder.

(1) The Progressive Corporation Executive Deferred Compensation Plan (2008 Amendment and Restatement), a copy of which is attached hereto as Exhibit 10.1. The Executive Deferred Compensation Plan permits certain executives of the Company, including the named executive officers identified in the Company’s Proxy Statement dated March 9, 2007, to defer the receipt of cash bonuses and the vesting of restricted stock awards, subject to the terms and conditions of the plan. Significant changes from the prior version of the plan include the following:

• Modifying the definitions of the terms of “Change in Control” and “Disability” to comply with Section 409A;

• Elimination of the right to make early withdrawals from the plan;

• Permitting the Compensation Committee to approve unscheduled withdrawals in the cases of certain unforeseeable emergencies;

• Allowing participants to further delay future scheduled distributions under certain conditions;

• Delaying certain distributions until 6 months after the participant’s termination of employment; and

• Permitting the Compensation Committee to accelerate distributions when the participant’s balance falls below a certain threshold (currently $15,500) or if necessary for the participant to pay taxes.

(2) The Progressive Corporation Directors Deferral Plan (2008 Amendment and Restatement), a copy of which is attached hereto as Exhibit 10.2. The Directors Deferral Plan permits non-employee directors of the Company to defer receipt of cash director fees, subject to the terms and conditions of the plan. Although the Company does not currently pay cash fees to directors, this plan governs existing deferrals of such fees from prior years. Significant changes from the prior version of the plan include the following:

• Addition of provisions for the payout of plan accounts promptly after a “Change in Control”, as defined in Section 409A and the regulations;

• Allowing participants to further delay future scheduled distributions under certain conditions; and

• Modification of the provisions regarding distribution on death of the participant.

(3) The Progressive Corporation Directors Restricted Stock Deferral Plan (2008 Amendment and Restatement), a copy of which is attached hereto as Exhibit 10.3. The Directors Restricted Stock Deferral Plan permits non-employee directors of the Company to defer receipt of restricted stock awards, subject to the terms and conditions of the plan. Restricted stock awards are made to non-employee directors on an annual basis. Significant changes from the prior version of the plan include the following:

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• Modifying the definitions of the terms of “Change in Control” to comply with Section 409A;

• Allowing participants to further delay future scheduled distributions under certain conditions; and

• Changing the provisions governing termination of the plan to comply with Section 409A.

Item 9.01    Financial Statements and Exhibits.

(c)   Exhibits

          See exhibit index on page 5.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: December 20, 2007

THE PROGRESSIVE CORPORATION
By:	/s/ Jeffrey W. Basch
	Name:	Jeffrey W. Basch
	Title:	Vice President and Chief Accounting Officer

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EXHIBIT INDEX

Exhibit No. Under	Form 8-K
Reg. S-K Item 601	Exhibit No.	Description
10	10.1	The Progressive Corporation Executive Deferred Compensation Plan (2008 Amendment and Restatement)
10	10.2	The Progressive Corporation Directors Deferral Plan (2008 Amendment and Restatement)
10	10.3	The Progressive Corporation Director Restricted Stock Deferral Plan (2008 Amendment and Restatement)

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EX-10.1

Exhibit 10.1

THE PROGRESSIVE CORPORATION EXECUTIVE
DEFERRED COMPENSATION PLAN

( 2008 Amendment and Restatement)

TABLE OF CONTENTS

	PAGE NO.
ARTICLE 1
DEFINITIONS
1.1 “Affiliated Company”		1
1.2 “ Account” or “ Deferral Account”		1
1.3 “Award”		1
1.4 “Beneficiary”		1
1.5 “Change in Control”		2
1.6 “Code”		2
1.7 “Committee”		2
1.8 “Company”		2
1.9 “Company Stock Fund”		2
1.10 “Deduction Limitation”		2
1.11 “Deferral Agreement”		2
1.12 “Deferral”		2
1.13 “Disabled” and “Disability”		2
1.14 “Distribution Event”		3
1.15 “Eligible Executive”		3
1.16 “ERISA”		3
1.17 “Fixed Deferral Period”		3
1.18 “Gainsharing Award”		3
1.19 “Incentive Plan”		3
1.20 “Investment Fund”		3
1.21 “Participant”		3
1.22 “Performance-Based Restricted Stock Award”		3
1.23 “Plan”		3
1.24 “Plan Year”		4
1.25 “Restricted Stock”		4
1.26 “Restricted Stock Award”		4
1.27 “Separation from Service”		4
1.28 “Stock”		4
1.29 “Termination of Employment”		4
1.30 “Time-Based Restricted Stock Award”		4
1.31 “Trust”		4
1.32 “Trust Agreement”		4
1.33 “Trustee “		4
1.34 “Unforeseeable Emergency”		4
1.35 “Valuation Date”		4
ARTICLE 2
DEFERRAL OF AWARDS
2.1 Method of Deferral		5
2.2 Deferral Agreement Provisions		5

	PAGE NO.
2.3 Fixed Deferral Periods		6
ARTICLE 3
DISTRIBUTIONS AND WITHDRAWALS
3.1 Date of Distribution		6
3.2 Method of Distribution		7
3.3 Amount of Distribution		8
3.4 Form of Distribution		8
3.5 Involuntary Cashouts		8
3.6 Special Distributions		9
ARTICLE 4
ACCOUNTS
4.1 Establishment of Deferral Accounts		9
4.2 Investment of Accounts		10
4.3 Valuation of Investment Funds		10
4.4 Valuation of Accounts		10
4.5 Nature of Accounts		11
4.6 Account Statements		11
ARTICLE 5
INVESTMENT FUNDS
5.1 Investment Funds		11
5.2 Investment Elections of Participants		11
5.3 Transfers		11
5.4 Special Rules for Restricted Stock		12
5.5 Nature of Investment Funds		12
5.6 Liquidation of Investment Funds		12
ARTICLE 6
TRUST
6.1 Establishment of Trust		12
ARTICLE 7
PLAN OPERATION AND ADMINISTRATION
7.1 Powers of Committee		13
7.2 Reliance on Tables, etc		14
7.3 Indemnification		14
7.4 Notices to Committee		14

	PAGE NO.
ARTICLE 8
CLAIMS PROCEDURES
8.1 Establishment of Claims Procedures		14
8.2 Claims Denials		14
8.3 Appeals of Denied Claims		15
8.4 Review of Appeals		15
8.5 Extensions		16
8.6 Disability Claims		16
ARTICLE 9
AMENDMENT AND TERMINATION OF THE PLAN
9.1 Amendment		16
9.2 Termination		17
9.3 Liquidation of the Trust		17
ARTICLE 10
MISCELLANEOUS PROVISIONS
10.1 Headings		17
10.2 Plan Not Contract of Employment		18
10.3 Severability		18
10.4 Prohibition on Assignment		18
10.5 Number and Gender		18
10.6 Governing Law		18
10.7 Satisfaction of Claims		18
10.8 No Liability		19
10.9 Tax Withholding		19
10.10 Facility of Payment		19
10.11 Repayment of Awards		19
10.12 Stock Subject to the Plan		19

THE PROGRESSIVE CORPORATION EXECUTIVE
DEFERRED COMPENSATION PLAN
(2008 Amendment and Restatement)

WHEREAS, The Progressive Corporation (“Company”) maintains The Progressive Corporation Executive Deferred Compensation Plan pursuant to a 2003 Amendment and Restatement and four amendments thereto; and

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

NOW, THEREFORE, effective January 1, 2008, the Plan is hereby amended and restated in its entirety to provide as follows:

GRANDFATHERED PROVISIONS
GOVERNING CERTAIN PRIOR DEFERRALS

The Plan, as in effect on December 31, 2007, shall remain unchanged and continue in full force and effect, but only with respect to Awards that were earned and became vested on or before December 31, 2004. For the period January 1, 2005 through December 31, 2007, the Plan was operated in compliance with Section 409A of the Code, pursuant to a reasonable interpretation of that section, as it was then in effect, with respect to Awards that were earned or become vested on or after January 1, 2005.

AMENDED AND RESTATED PROVISIONS

Effective January 1, 2008, the Plan is hereby amended and restated in its entirety to provide as follows, but only with respect to Awards that were earned or become vested on or after January 1, 2005.

ARTICLE 1
DEFINITIONS

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

     1.2 “ Account” or “ Deferral Account” shall have the meaning set forth in Section 4.1.

     1.3 “Award” means a Gainsharing Award or Restricted Stock Award.

     1.4 “Beneficiary” means such person(s) as the Participant has designated. A Participant may change his/her Beneficiary designation at any time. All Beneficiary designations (including changes) shall be made in writing on such forms as the Committee shall prescribe, and shall become effective only when received and accepted by the Committee; provided, however, that a Beneficiary designation (including a change) received by the Committee after the designating Participant’s death shall be disregarded. In the absence of a Beneficiary designation, or if the designated Beneficiary is no longer living or in existence at the time of the

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Participant’s death, all distributions payable from the Plan upon the Participant’s death shall be paid to the Participant’s estate.

     1.5 “Change in Control” means a change in the ownership of the Company, a change in effective control of the Company, or a change in the ownership of a substantial portion of the Company’s assets, each as determined in accordance with Section 409A of the Code.

     1.6 “Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated pursuant thereto.

     1.7 “Committee” means the Compensation Committee of the Board of Directors of the Company, or any successor committee.

     1.8 “Company” means The Progressive Corporation, an Ohio corporation, or its successors.

     1.9 “Company Stock Fund” means an Investment Fund consisting of Stock and cash, and administered in accordance with such rules regarding reinvestment of dividends and treatment of fractional shares as the Committee shall prescribe.

     1.10 “Deduction Limitation” means the following described limitation on a payment that may otherwise be distributable under the Plan. If the Committee determines in good faith that there is a reasonable anticipation that any compensation to a Participant for a taxable year of the Company would not be deductible by the Company solely by reason of the limitation under Code Section 162(m), the Committee may elect to defer all or any portion of a distribution otherwise payable to the Participant under this Plan to the extent necessary to preserve the Company’s deduction under Code Section 162(m) for such taxable year; provided, however, that if the Committee elects to defer a portion of a distribution in respect of a Participant pursuant to this Section 1.10, then the Committee shall also defer all remaining portions of such distribution to the extent permissible under this Section 1.10. Any amounts deferred pursuant to this limitation shall continue to be deemed to be invested as provided in Article 5. The amounts so deferred (subject to investment gains and losses) shall be distributed to the Participant or his or her Beneficiary (if the Participant dies) no later than the last day of the Plan Year in which the Committee determines in good faith that the deductibility of compensation paid or payable to the Participant for the taxable year of the Company during which the distribution is made will not be limited by Code Section 162(m), or the last day of the Plan Year in which the Participant experiences a Separation from Service (or, if later, no later than six months and one day following the date of such Separation from Service).

     1.11 “Deferral Agreement” means an agreement entered into by an Eligible Executive pursuant to Article 2.

     1.12 “Deferral” means an amount credited to a Deferral Account pursuant to a Deferral Agreement.

     1.13 “Disabled” and “Disability” means that a Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving short-

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term and/or long-term disability benefits for a period of not less than three (3) months under The Progressive Health, Life and Disability Benefits Plan, or any similar successor plan.

     1.14 “Distribution Event” means, as to each Participant, the earliest of the following events:

(i)	the Participant’s death;
(ii)	the Participant’s Termination of Employment; or
(iii)	Change in Control.

     1.15 “Eligible Executive” means any executive of the Company or any Affiliated Company who has a target Gainsharing Award of 35% or more of salary or who is designated in writing as an Eligible Executive by the Committee, excluding, however, individuals who are not residents of the United States or are not working at a location in the United States.

     1.16 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated pursuant thereto.

     1.17 “Fixed Deferral Period” shall have the meaning set forth in Section 2.3.

     1.18 “Gainsharing Award” means any bonus or other incentive award payable with respect to a Plan Year under any plan that expressly allows deferrals under this Plan, including The Progressive Corporation Gainsharing Plan, The Progressive Corporation Information Technology Incentive Plan, The Progressive Capital Management Bonus Plan, The Progressive Corporation Executive Bonus Plan and any other plan or program as may be designated by the Committee.

     1.19 “Incentive Plan” means The Progressive Corporation 2003 Incentive Plan, as amended from time to time.

     1.20 “Investment Fund” means a device established from time to time by the Committee pursuant to Section 5.1 that is used to calculate gains and losses in amounts deferred by Participants under the Plan.

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

     1.22 “Performance-Based Restricted Stock Award” means an Award of “Performance-Based Restricted Stock”, as defined in the Incentive Plan.

     1.23 “Plan” means The Progressive Corporation Executive Deferred Compensation Plan (2008 Amendment and Restatement), as set forth herein and as it may be amended from time to time.

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     1.24 “Plan Year” means 2008 and each subsequent calendar year.

     1.25 “Restricted Stock” means an award of shares of Stock that is made pursuant to the Incentive Plan and is subject to restrictions.

     1.26 “Restricted Stock Award” means an award of Restricted Stock under the Incentive Plan.

     1.27 “Separation from Service” shall have the meaning set forth in Section 409A of the Code.

     1.28 “Stock” means the Common Shares, $1.00 par value, of the Company.

     1.29 “Termination of Employment” means the voluntary or involuntary cessation of a Participant’s employment with the Company and all Affiliated Companies as a result of a Separation from Service for any reason other than death, Disability or a military leave, sick leave or other leave of absence that is reasonably expected to last for a period of less than six months, or any leave of absence for which the Participant retains a right to reemployment either by statute or by contract with the Company.

     1.30 “Time-Based Restricted Stock Award” means an Award of “Time-Based Restricted Stock”, as defined in the Incentive Plan.

     1.31 “Trust” shall mean the trust maintained pursuant to the Trust Agreement and known as The Progressive Corporation Executive Deferred Compensation Trust.

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

     1.33 “Trustee” shall mean the person selected from time to time by the Company to serve as trustee under the Trust Agreement.

     1.34 “Unforeseeable Emergency” shall have the meaning set forth in Section 409A of the Code.

     1.35 “Valuation Date” shall mean each day that the New York Stock Exchange is open for trading.

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ARTICLE 2
DEFERRAL OF AWARDS

     2.1 Method of Deferral.

Each Eligible Executive may elect to defer receipt of all or a portion of his/her Gainsharing Award and/or the entirety of any of his/her Restricted Stock Awards in respect of any Plan Year by signing a Deferral Agreement and delivering it to the Committee or by completing a Deferral Agreement and transmitting it to the Committee via the Company’s electronic mail system. If a Gainsharing Award is payable in installments, each installment, whether or not payable in the same Plan Year, shall be subject to the same Deferral Agreement. Any taxes or other amounts due with respect to any deferred Gainsharing Award or Restricted Stock Award shall be paid by the Eligible Executive to the Company no later than the date specified by the Company.

     2.2 Deferral Agreement Provisions.

     Each Deferral Agreement must satisfy all of the following requirements:

(a) it must be in the form specified by the Committee;

(b) it must be delivered in writing, or transmitted electronically, to the Committee in accordance with such procedures as the Committee may establish from time to time.

(c) it must be irrevocable;

(d) as to deferrals of Gainsharing Awards, it must apply to only one such Gainsharing Award;

(e) as to deferrals of Restricted Stock Awards, it must apply to all Time-Based Restricted Stock Awards granted during the Plan Year, all Performance-Based Restricted Stock Awards granted during the Plan Year, or both;

(f) it must be delivered to the Committee in writing, or received by the Committee via the Company’s electronic mail system, (i) as to each Gainsharing Award, prior to the Plan Year in which the Gainsharing Award will be earned, and (ii) as to each Restricted Stock Award, prior to the Plan Year the Restricted Stock Award is granted;

(g) as to deferrals of Gainsharing Awards, it must specify the percentage of the Eligible Executive’s Gainsharing Award to be deferred, which percentage shall not be less than ten percent (10%). The same deferral percentage shall apply to each installment of a Gainsharing Award covered by the Deferral Agreement. However, a Deferral Agreement may provide for the deferral of a percentage of that portion of a Gainsharing Award that exceeds a specified gross dollar amount, which percentage shall not be less than ten percent (10%). Notwithstanding the preceding provisions of this Section 2.2(g), no Deferral shall be less than such dollar amount as the Committee may specify from time to time;

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(h) as to deferral of a Restricted Stock Award, it must apply to the entirety of each Time-Based Restricted Stock Award granted during the Plan Year, the entirety of each Performance-Based Restricted Stock Award granted during the Plan Year, or both;

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

(j) it must specify the Fixed Deferral Period, if any, elected by the Eligible Executive pursuant to Section 2.3 of this Plan; and

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

     2.3 Fixed Deferral Periods.

If an Eligible Executive wishes to defer receipt of all or a portion of any Award for a fixed period of time (“Fixed Deferral Period”), then his/her Deferral Agreement relating to such Award shall specify that Fixed Deferral Period. Such Fixed Deferral Period shall not be less than three (3) years following (i) in the case of a deferral of all or a portion of a Gainsharing Award, the end of the Plan Year in which the Gainsharing Award will be earned and (ii) in the case of a deferral of a Restricted Stock Award, the end of the Plan Year in which the last of the restrictions applicable to the Restricted Stock Award expires. In the case of a Restricted Stock Award as to which restrictions expire in installments, the Fixed Deferral Period must end on the same date for all installments. Notwithstanding the preceding provisions of this Section 2.3, Eligible Executives may not elect a Fixed Deferral Period with respect to the deferral of any Performance-Based Restricted Stock Award.

ARTICLE 3
DISTRIBUTIONS AND WITHDRAWALS

     3.1 Date of Distribution.

Distribution of the balance of each Deferral Account of a Participant shall be made or shall commence within thirty (30) days following the earlier of (i) the date the Committee receives notice that a Distribution Event has occurred, or (ii) the date on which the Fixed Deferral Period, if any, applicable to such Account expires. Notwithstanding the preceding provisions, each distribution made on account of a Participant’s Termination of Employment shall not be made or commence until six (6) months after the date of such Termination of Employment. If distribution is to be made in installments, payment of installments following the first installment shall be made within thirty (30) days following each anniversary of the date referred to in clause (i) or (ii) of the first sentence of this Section 3.1 or the date referred to in the immediately preceding sentence, as applicable, until all installments have been paid.

The Committee, in its sole discretion, may also permit distribution of the entire balance of all of a Participant’s Deferral Accounts to be made within thirty (30) days following the date the Participant is determined by the Committee to be Disabled. If the Committee approves such a

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Disability distribution, no further Deferrals shall be made with respect to the Disabled Participant following the date of the Committee’s approval, and each Deferral Agreement to which such Participant is then a party shall be of no further effect.

The Committee in its sole discretion may also permit distribution of all or a portion of the balance of a Participant’s Deferral Accounts to be made following the Committee’s receipt of written notice that an Unforeseeable Emergency has occurred with respect to such Participant. Such distribution shall be limited to the amount reasonably necessary to satisfy the need created by such Unforeseeable Emergency, plus any applicable taxes. If the Committee approves such an Unforeseeable Emergency distribution, no further Deferrals shall be made with respect to such Participant following the date of the Committee’s approval, and each Deferral Agreement to which such Participant is then a party shall be of no further effect. To the extent permitted under Section 409A of the Code, a Participant who receives a distribution due to an Unforeseeable Emergency may enter into a new Deferral Agreement in any Plan Year following the Plan Year in which the Participant received such distribution.

Notwithstanding the preceding provisions of this Section 3.1, a Participant may elect to change the date any distribution on account of expiration of a Fixed Deferral Period is to be made or commence. Each such election change must be made in writing and on such forms as the Committee shall specify. Each such election change must be delivered to the Committee at least one (1) year prior to the expiration of the Fixed Deferral Period and shall delay the payment or commencement of distributions to the Participant for a period of at least five (5) years following the date such distribution otherwise would have been made or would have commenced. In the case of a distribution to be made in installments, the provisions of this paragraph shall apply to each installment payment as if each such installment payment were a separate distribution.

Participants desiring to receive a distribution due to disability or Unforeseeable Emergency, shall submit a written request to the Committee in such form as it shall specify.

     3.2 Method of Distribution.

Each distribution of all or a portion of the balance of a Deferral Account shall be made to the Participant, except that any such distribution made on account of the Participant’s death shall be made to the Participant’s Beneficiary. Each distribution made on account of the Participant’s death, Disability, Unforeseeable Emergency or a Change in Control shall be paid in a lump sum. Each distribution made on account of the Participant’s Termination of Employment or expiration of a Fixed Deferral Period shall be paid in either a lump sum or installments, as specified in the applicable Deferral Agreement.

If a Participant elects to receive payment in installments and dies prior to payment of all installments, the balance remaining unpaid at his/her death shall be paid to his/her Beneficiary in a lump sum.

Installment payments shall be paid in three (3) annual installments, in five (5) annual installments or in ten (10) annual installments, as specified in the applicable Deferral Agreement.

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Notwithstanding the preceding provisions of this Section 3.2, a Participant may elect to change the method of distribution elected in respect of any distribution to be made on account of Termination of Employment or expiration of a Fixed Deferral Period to any of the four permissible distribution options set forth in Section 2.2(i). Such election change shall not take effect until the first anniversary of the date it is delivered to the Committee. Each such election change must be made in writing and on such forms as the Committee shall specify. Any election change with respect to a Fixed Deferral Period must be delivered to the Committee at least one (1) year prior to the expiration of the Fixed Deferral Period. In addition, any election change with respect to a Termination of Employment or Fixed Deferral Period shall delay the payment or commencement of distributions to a Participant for a period of at least five (5) years following the date such distribution otherwise would have been made or would have commenced.

     3.3 Amount of Distribution.

The amount of each lump sum payment shall be equal to the balance of the Deferral Account, as of the Valuation Date immediately preceding the date of any distribution from the Plan. In the case of a lump sum payment made upon the occurrence of an Unforeseeable Emergency, the amount shall be such portion of such balance as the Committee, in its sole discretion, shall determine, as being reasonable necessary to meet the need created by such Unforeseeable Emergency, plus any applicable taxes. The amount of each installment payment shall be equal to the balance of the Deferral Account as of the Valuation Date immediately preceding the date of payment multiplied by a fraction, the numerator of which is one and the denominator of which is the number of years remaining in the period over which installments are to be paid. Installment distributions to be made in Stock shall be rounded to the nearest whole share. Notwithstanding anything in the Plan to the contrary, all distributions, except those made on account of a Change in Control, are subject to the Deduction Limitation.

     3.4 Form of Distribution.

Distributions of Deferrals of Restricted Stock Awards granted in 2005 and later years shall be made in Stock, with any fractional shares of Stock and any portion of such distribution that is derived from cash dividends on deferred Restricted Stock Awards to be made in cash. All other Plan distributions shall be made in cash.

     3.5 Involuntary Cashouts.

If, at any time during a Plan Year, the aggregate balance of a Participant’s Deferral Accounts under the Plan is less than the applicable dollar amount under Section 402(g)(1)(B) of the Code for that Plan Year, the Committee, in its sole discretion, may distribute such aggregate balance to such Participant in a lump sum.

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     3.6 Special Distributions.

Notwithstanding anything in this Plan to the contrary,

(i)

The Committee, in its sole discretion, may make payment of all or a portion of one or more Participant’s Deferral Accounts at any time that the Plan fails to meet the requirements of Section 409A of the Code. Such payment may not exceed the amount required to be included in income of such Participant(s) as a result of such failure; and

(ii)

The Committee, in its sole discretion, may distribute all or any portion of the Deferral Accounts of one or more Participants to reflect payment of state, local or foreign tax obligations or obligations imposed by the Federal Insurance Contributions Act (FICA), including the additional tax at source on wages, arising from participation in the Plan that apply to an amount deferred under the Plan before the amount is paid or made available to the Participant. Such payment to a Participant may not exceed the amount of such taxes due as a result of such Participant’s participation in the Plan. Such payment may be made to the Participant in the form of withholding pursuant to provisions of applicable state, local or foreign law, or by distribution directly to the Participant.

ARTICLE 4
ACCOUNTS

     4.1 Establishment of Deferral Accounts.

The Committee shall establish a Deferral Account in the name of each Participant for each Gainsharing Award, or portion thereof, and each Restricted Stock Award that is the subject of a Deferral Agreement. As to Deferrals of Gainsharing Awards, each such Account shall be established as of the first date that such Gainsharing Award, or portion thereof, otherwise would have been paid to the Participant. As to deferrals of Restricted Stock Awards, each such Account shall be established as of the date that the restrictions applicable to such Restricted Stock Award expire. In the case of a Restricted Stock Award as to which the restrictions expire at different times for different portions of the Award, such Account shall be established as of the date the first of such restrictions expires. Each Deferral Account shall be credited with the deferred portion of such Award at the time the Account is established, or, in the case of a Restricted Stock Award as to which the restrictions expire at different times for different portions of the Award, from time-to-time as such restrictions expire. Thereafter, all Deferral Accounts shall be valued and administered as provided in this Article. Notwithstanding anything in the Plan to the contrary, the Trustee may combine two (2) or more of any Participant’s Deferral Accounts into a single Account, if the Deferral Accounts to be combined (i) are subject to Fixed Deferral Periods ending on the same date or (ii) are not subject to Fixed Deferral Periods at all.

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     4.2 Investment of Accounts.

All credits to a Deferral Account of a Participant shall be deemed to be invested in such Investment Fund or Funds as the Participant shall elect from time to time in accordance with Article 5. The number of shares of Stock to be credited to a Participant’s Account by virtue of a Participant’s initial election to invest a portion of a Deferral in the Company Stock Fund shall be determined on the date of the Deferral in accordance with such procedures as the Committee shall establish, based on the weighted average price paid for all shares of Stock purchased by the Trustee and deposited in the Trust on that date pursuant to Article 6. If a Participant has any portion of a Deferral in the Company Stock Fund on the record date for a dividend to be paid on the Company’s Stock, an amount determined at a per share rate equivalent to such dividend shall be credited to the Participant’s Account as of the payment date for such dividend, and such amount shall be deemed to be reinvested in the Company Stock Fund. Notwithstanding the preceding provisions of this Section 4.2, (i) all credits to a Deferral Account of a Participant relating to a deferred Restricted Stock Award granted prior to March 17, 2005 (and dividends thereon), shall be deemed to be invested in the Company Stock Fund until six (6) months and one (1) day following the expiration of the restrictions applicable to such Award, unless otherwise determined by the Committee at or after the deferral of such Award, and, thereafter, the preceding provisions of this Section 4.2 shall apply, and (ii) all credits to a Deferral Account of a Participant relating to a deferred Restricted Stock Award granted on or after March 17, 2005 (including dividends thereon), shall be deemed to be invested in the Company Stock Fund until the balance of such Deferral Account has been distributed in accordance with Article 3.

     4.3 Valuation of Investment Funds.

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

     4.4 Valuation of Accounts.

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

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     4.5 Nature of Accounts.

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

     4.6 Account Statements.

The Committee will furnish each Participant, or make available to each Participant on-line, periodic statements of the value of each of his/her Deferral Accounts.

ARTICLE 5
INVESTMENT FUNDS

     5.1 Investment Funds.

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

     5.2 Investment Elections of Participants.

Each Participant shall make an investment election in the manner prescribed by the Committee, directing the manner in which his/her Deferrals shall be deemed to be invested. Each investment election must be made at the time the applicable Deferral Agreement is signed and may be changed upon notice to the Committee at any time prior to the deemed deposit of the applicable Deferral into one or more Investment Funds. Such elections and notices to the Committee must be made in writing or through the Company’s electronic mail system in accordance with such procedures as the Committee may prescribe. Each Participant may make a separate investment election for each of his/her Deferral Accounts. Each investment election shall specify that Deferrals shall be deemed to be deposited in one or more of the Investment Funds in percentages that are each an integral multiple of 1% and that in the aggregate equal 100% of the Deferral.

     5.3 Transfers.

Amounts deemed to be invested in an Investment Fund pursuant to this Section may be transferred to another Investment Fund in accordance with such procedures and limitations as the Committee shall prescribe. The procedures and limitations prescribed by the Committee

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may include, without limitation, provisions which (i) limit transfers to specified dollar amounts or percentages (ii) limit the number of transfers that each Participant may make each Plan year (iii) limit the dates as of which transfers may become effective and (iv) impose waiting periods or other restrictions in connection with multiple transfers in and out of the same Investment Fund. All such procedures and limitations shall apply uniformly to similarly situated Participants.

     5.4 Special Rule for Restricted Stock Awards.

Notwithstanding the preceding provisions of this Article 5, each Deferral of a Restricted Stock Award shall be deemed to be invested in the Company Stock Fund until six (6) months and one (1) day following the date the restrictions applicable to such Restricted Stock Award expire, unless otherwise determined by the Committee at or after the deferral of such Award. Thereafter, the Participant may transfer all or a portion of such Deferral to another Investment Fund in accordance with the preceding provisions of this Article 5. Notwithstanding the preceding provisions of this Section 5.4, each Deferral of a Restricted Stock Award granted on or after March 17, 2005 shall be deemed to be invested in the Company Stock Fund until the Deferral Account to which such Deferral has been credited has been distributed in accordance with Article 3 of this Plan.

     5.5 Nature of Investment Funds.

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

     5.6 Liquidation of Investment Funds.

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

ARTICLE 6
TRUST

     6.1 Establishment of Trust.

The Company shall establish and maintain a Trust to provide a source of funds to assist the Company in meeting its liabilities under the Plan. Within thirty (30) days following the end of

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each Plan Year ending after the Trust has become irrevocable pursuant to the Trust Agreement, the Company shall be required to irrevocably deposit additional cash or other property to the Trust in an amount sufficient to pay each Participant or Beneficiary the benefits payable pursuant to the terms of the Plan as of the close of that Plan year.

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

ARTICLE 7
PLAN OPERATION AND ADMINISTRATION

     7.1 Powers of Committee.

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

(a) to make and enforce such rules and regulations as it deems necessary or proper for the efficient administration of the Plan;

(b) to interpret the Plan and to decide all matters arising thereunder, including the right to resolve or remedy any ambiguities, errors, inconsistencies or omissions. All such interpretations shall be final and binding on all parties;

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

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

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

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

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

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

     7.2 Reliance on Tables, etc.

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

     7.3 Indemnification.

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

     7.4 Notices to Committee.

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

ARTICLE 8
CLAIMS PROCEDURES

     8.1 Establishment of Claims Procedure

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

     8.2 Claims Denials

Unless such claim is allowed in full by the Committee, written notice of the denial shall be furnished to the claimant within ninety (90) days (which may be extended by a period not to exceed an additional ninety (90) days if special circumstances so require and written notice to the claimant is given prior to the expiration of the initial ninety (90) day period describing such circumstances and indicating the date by which the Committee expects to render its

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determination) setting forth the following in a manner calculated to be understood by the claimant:

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

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

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

               (iv) A description of the Plan’s claims review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on review; and

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

     8.3 Appeals of Denied Claims

Within a reasonable period of time after the denial of the claim, but in any event, not to be more than sixty (60) days, the claimant or his/her duly authorized representative may make written application to the Committee for a review of such denial. The claimant or his/her representative, may, upon request and free of charge, review or receive copies of documents, records and other information relevant to the claimant’s claim for benefits, and may submit written comments, documents, records and other information relating to the claim for benefits.

     8.4 Review of Appeals

If an appeal is timely filed, the Committee shall conduct a full and fair review of the claim and mail or deliver to the claimant its written decision within sixty (60) days after the claimant’s request for review (which may be extended by a period not to exceed an additional sixty (60) days if special circumstances or a hearing so require and written notice to the claimant is given prior to the expiration of the initial sixty (60) day period describing such special circumstances and indicating the date by which the Committee expects to render its determination). In conducting its review, the Committee shall take into account all comments, documents, records and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The Committee’s decision on review shall:

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

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

               (iii) Make specific reference to pertinent provision(s) of the Plan;

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               (iv) State that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits; and

               (v) Include a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA.

     8.5 Extensions

If a period of time is extended, as permitted under Sections 8.2 and 8.4 above, due to a claimant’s failure to submit information to decide a claim, the period for making the benefit determination on review shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information.

     8.6 Disability Claims.

Claims involving a determination of Disability or payments related to Disability shall comply with and follow the applicable Department of Labor regulations. Upon the filing of an initial Disability-related claim, the Committee will make a decision regarding a Participant’s claim within 45 days of such Participant’s request, unless special circumstances would make rendering a decision within the 45-day period unfeasible. The Committee will notify the Participant of its need to extend the decision deadline and may extend the deadline for up to two additional 30-day periods, if necessary. The Participant will be permitted to appeal any adverse initial determination up to 180 days after the determination is issued. The Committee will make a decision within a reasonable period of time after receiving any appeal but in no event later than 45 days after a Participant’s appeal is received unless special circumstances would make rendering a decision within the 45-day period unfeasible. The Committee will notify a Participant of any need to extend the decision deadline and may extend the deadline for no more than an additional 45 days. More details about the Disability retirement procedure are available from the Committee.

ARTICLE 9
AMENDMENT AND TERMINATION OF THE PLAN

     9.1 Amendment.

The Company may amend the Plan and Trust Agreement in any respect at any time for any reason by action of the Committee without liability to any Participant, Beneficiary or other person for any such amendment or for any other action taken pursuant to this Section 9.1, provided that any amendment required to be approved by the Company’s shareholders pursuant to Section 162(m) of the Code shall not be effective until approved by the Company’s shareholders in accordance with the requirements of Section 162(m) and further provided that no such amendment shall be made retroactively in a manner that would deprive any Participant

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of any rights or benefits which have accrued to his/her benefit under the Plan as of the date such amendment is proposed to be effective, unless such amendment is necessary to comply with applicable law.

     9.2 Termination.

The Company may terminate the Plan at any time for any reason by action of the Committee without any liability to any Participant, Beneficiary or other person for any such termination or for any other action taken pursuant to this Section 9.2. Following termination of the Plan, and notwithstanding the provisions of any Deferral Agreement entered into prior to such termination, no additional Deferrals may be made hereunder, but all existing Accounts shall continue to be administered in accordance with the Plan, as in effect immediately prior to termination, and shall be distributed in accordance with such terms of the Plan and the applicable Deferral Agreements, unless and until the Company elects to accelerate distribution as provided below. At any time on or after the effective date of termination of the Plan, the Company, in its sole discretion, may elect to accelerate the distribution of the entire balance of each Participant’s Accounts to the extent permitted under Section 409A of the Code. Such accelerated distributions shall be made (i) at a time selected by the Company in accordance with Section 409A of the Code and (ii) in a lump sum based on the value of the Accounts, determined as of the Valuation Date immediately preceding the date of distribution. Upon the completion of distributions to all Participants or Beneficiaries, as the case may be, no Participant, Beneficiary or person claiming under or through them, will have any claims in respect of the Plan.

     9.3 Liquidation of the Trust.

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

ARTICLE 10
MISCELLANEOUS PROVISIONS

     10.1 Headings.

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

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     10.2 Plan Not Contract of Employment.

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

     10.3 Severability.

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

     10.4 Prohibition on Assignment.

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

     10.5 Number and Gender.

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

     10.6 Governing Law.

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

     10.7 Satisfaction of Claims.

Any payment to any Participant or Beneficiary in accordance with the terms of the Plan shall, to the extent thereof, be in full satisfaction of all claims hereunder, whether they be against the Company, the Committee, or the Trustee, any of whom may require the Participant or

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Beneficiary (or legal representative), as a condition precedent to such payment to execute a release and receipt therefor.

     10.8 No Liability.

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

     10.9 Tax Withholding.

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

     10.10 Facility of Payment.

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

     10.11 Repayment of Awards.

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

     10.12 Stock Subject to the Plan.

Subject to adjustment as provided below, the total number of shares of Stock reserved and available for issuance in connection with the Plan is 3,320,490. Any Stock issued hereunder may consist, in whole or in part, of authorized and unissued shares or treasury shares. If there is a merger, reorganization, consolidation, recapitalization, share dividend, share split, reverse split, combination of shares or other change in corporate structure of the Company affecting the Stock, such substitution or adjustment shall be made in the aggregate number of shares of Stock reserved for issuance under the Plan, and in the number of shares deemed to be held in any Account, as may be approved by the Committee in its sole discretion.

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IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its duly authorized officers as of this                      day of                    , 2007.

THE PROGRESSIVE CORPORATION
	By:
	Title:

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EX-10.2

Exhibit 10.2

THE PROGRESSIVE CORPORATION
DIRECTORS DEFERRAL PLAN
(2008 Amendment and Restatement)

1.	Purposes of the Plan.
	The purposes of this Plan are to attract and retain qualified Directors and to provide incentives to these Directors through the ability to defer their receipt of Fees and by providing Directors with the opportunity to participate in the Company’s growth.
2.	Definitions.

(a) “Board” means the Board of Directors of the Company.

(b) “ Change in Control” means a change in the ownership of the Company, a change in effective control of the Company or a change in the ownership of a substantial portion of the Company’s assets, each as determined in accordance with Section 409A of the Code.

(c) “Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated pursuant thereto.

(d) “Common Shares” means units equivalent in value and dividend rights to Common Shares, $1.00 par value, of the Company.

(e) “Company” means The Progressive Corporation.

(f) “Deferred Account” means the account established by the Company for each Director who elects to defer the Fees payable to him as a Director.

(g) “Director” means any director of the Company who is not an employee of the Company.

(h) “Election Agreement” means the written election to defer Fees signed by the Director and in the form provided by the Chief Financial Officer of the Company.

(i) “Fees” means any fees payable in cash to a Director by reason of his or her serving on the Board and includes both “Retainer Fees” and “Meeting and Service Fees.” “Retainer Fees” means those Fees which are payable in cash to a Director by reason of his or her serving on the Board (without regard to attendance at meetings). “Meeting and Service Fees” means those Fees which are payable in cash to a Director (i) by reason of his or her attendance at meetings of the Board or any committee thereof, or (ii) for participation in meetings of the Company’s management, or other Board-related activities, for which such Director is entitled to receive compensation, as determined in the sole discretion of the Chairman of the Board.

(j) “Market Price” means the average of the high and low price at which a share of the Company’s Common Stock, $1.00 par value, is traded on the NYSE on a given date.

(k) “Member” means any Director who has at any time deferred the receipt of Fees in accordance with this Plan.

(l) “Plan” means The Progressive Corporation Directors Deferral Plan (2008 Amendment and Restatement), as set forth herein and as it may be amended from time to time.

(m) “Term” means the duration of the term for which a Director is elected.

(n) “Year” means the calendar year.

(o) Whenever appropriate, words used herein in the singular may be read as the plural and the plural may be read as the singular.

(p) Masculine pronouns used herein shall be deemed to refer to both women and men.

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3. Election to Defer Fees.

(a) Eligibility.

A Director may elect to defer receipt of all or a portion of his Fees for any Year in accordance with Paragraph 3(b) hereof.

(b) Time of Election.

A Director desiring to defer all or a portion of his Fees for the upcoming Year must submit an Election Agreement to the Chief Financial Officer of the Company no later than the last day of the Year prior to the Year for which the election is to be effective.

Any Director who was not a Director during the previous Year may make an election to defer all or a portion of the Fees for the Year in which the Director is elected to the Board by delivering an Election Agreement to the Chief Financial Officer of the Company within thirty (30) days of such election to the Board. A Director fulfilling the above requirements shall be considered a “Member” for purposes of this Plan.

(c) Duration and Nature of Election.

Subject to the following sentence, a Member’s election to defer Fees shall continue in effect from Year to Year unless modified or revoked by the Member through written notice to the Chief Financial Officer of the Company prior to the beginning of the Year for which the revocation or modification is to apply. Modifications or revocations shall not apply retroactively, and once a Member has made, or is deemed to have made, an election to defer all or a portion of his Fees for a given Year, such election may not be modified or revoked.

4. The Amount and Date of Deferral.

The Election Agreement of the Member shall indicate the amount of Fees to be deferred and the date to which the Fees are to be deferred. The deferral of Retainer Fees shall be subject to Paragraph 7 hereof; the deferral of Meeting and Service Fees shall be to the earlier of (1) the date selected by the Member in an Election Agreement, which date shall not be earlier than six months and one day after the date on which such Fees are credited to the Member’s Deferred Account or (2) the date of the death of the Member. Subject to the preceding sentence, a Member may (i) select a lump-sum distribution or a series of distributions or installments and (ii) choose the date on which the lump sum shall be paid or the installments shall commence. The installments may not be more frequent than quarterly and may not consist of more than forty (40) quarterly or ten (10) annual installments. All payments will be made on or promptly after the first business day of a calendar quarter. In the case of the death of the Member, distribution of the deferred Fees shall be made in accordance with Paragraph 8.

5. Deferral Accounts.

(a) Accounts.

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The Company shall establish and preserve one or more accounts for each Member. A Member shall designate on the Election Agreement whether to have the account valued on the basis of the Common Shares of the Company in accordance with Paragraph 5(b) hereof or on the basis of cash in accordance with Paragraph 5(c) hereof. A Member may defer a portion of his Fees into each type of account. The Company may establish separate accounts for a Member to properly account for amounts deferred under the two alternatives or during different years. An account valued on the basis of the Company’s Common Shares shall be known as a “Stock Account” and an account valued on the basis of cash shall be known as a “Cash Account.” Amounts held in a Stock Account may not be transferred to a Cash Account and vice versa.

(b) Stock Account.

Each Member’s Stock Account shall be credited as follows:

     (i) Fees. On the last day of each calendar quarter, the Stock Account shall be credited with the number of Common Shares (whole or fractional, rounded to the nearest thousandth of a share) determined by dividing (A) the sum of the Fees that the Member elects to defer (or that he or she is deemed to have elected to defer under Paragraph 7 hereof) to his or her Stock Account that otherwise would have been paid to him or her during the quarter, by (B) the Market Price of the Company’s Common Shares, $1.00 par value, on the last business day of such quarter.

     (ii) Dividends. Except as provided in the final sentence of Paragraph 6 hereof, on the date on which a dividend is paid on (or any other distribution is made on account of) the Company’s Common Shares, $1.00 par value, the Stock Account shall be credited with the number of Common Shares (whole or fractional, rounded to the nearest thousandth of a share) determined by dividing (A) the dollar amount that the Member would have received with respect to the number of Common Shares held in his or her Stock Account on the applicable record date if such Common Shares had been actual shares of the Company’s Common Shares, $1.00 par value, by (B) the Market Price of the Company’s Common Shares, $1.00 par value, on the date on which such dividend is paid.

(c) Cash Account.

If a Member elects to have a portion of his Fees deferred into a Cash Account, there will be credited to his Cash Account, on the last day of each quarter, an amount equal to the sum of (i) the Fees he elects to defer to his Cash Account which otherwise would have been paid to him during the quarter and (ii) interest on the balance in the Cash Account on the first day of such quarter at a rate based on the rate of interest offered by National City Bank, Cleveland, Ohio, on the last business day of such quarter on new three-month certificates of deposit.

(d) Claims of General Creditors.

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All compensation deferred and amounts credited to the Cash and Stock Accounts under this Plan shall remain a part of the general assets of the Company. Accordingly, the compensation deferred under this Plan is subject to the claims of the Company’s general creditors.

6. Payment of Accounts.

The accounts established and maintained for each Member shall be distributed in a lump sum or installments. The selection of the distribution date(s) and the method of distribution are to be indicated on the Election Agreement to be submitted by the Member.

A Member may elect to change the distribution date(s) and method of distribution set forth in an Election Agreement governing fees deferred in past years. Each such change must be made in writing and on such forms as the Company shall specify. Each such change must be delivered to the Company at least one (1) year prior to the distribution date being changed and shall delay the payment or commencement of the distribution for a period of at least five (5) years following the date such distribution otherwise would have been made or would have commenced. In the case of a distribution to be made in installments, the provisions of this paragraph shall apply to each installment payment as if each such installment payment were a separate distribution.

Changes in the method of and time for payment of the amount of an account may be effected as to Fees deferred for future Years by notifying the Chief Financial Officer in writing prior to the beginning of the Year for which the modification is to apply in accordance with Paragraph 3 above.

Notwithstanding the foregoing, if a Change in Control occurs, each Member’s entire account balance shall be distributed to such Member within thirty (30) days following the Change in Control.

With respect to all distributions to be made under the Plan, the following rules shall apply:

(i) All distributions, whether from a Stock Account or a Cash Account, shall be paid in cash subject to withholding or deduction by the Company of any taxes, contributions, payments and assessments which the Company is now or may hereafter be required or authorized by law to withhold or deduct from distributions;

(ii) The amount of the distribution from the Stock Account shall be valued based on the Market Price of the Company’s Common Shares, $1.00 par value, on the last business day of the calendar quarter immediately preceding the distribution date; and

(iii) The amount of the distribution from the Cash Account shall be valued based on the value of the Cash Account on the last business day of the calendar quarter immediately preceding the distribution date.

In the event a Member elects to receive installment payments, the following rules shall apply:

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(i) The balance of the Stock Account shall be credited, pursuant to Paragraph 5(b) above, with additional Common Shares upon the payment of dividends until the Stock Account is completely distributed;

(ii) The balance of the Cash Account shall be credited, pursuant to Paragraph 5(c) above, with interest quarterly until the Cash Account is completely distributed; and

(iii) The amount of each installment shall be determined by dividing the value of the Stock Account, the Cash Account, or both, by the number of installments remaining to be paid to the Member.

Notwithstanding anything to the contrary contained herein, if:

(a)	a Member would otherwise be entitled to have an amount equal to a dividend (or other distribution) credited to his or her Stock Account under Paragraph 5(b) hereof in respect of Common Shares held in such Stock Account on the record date for such dividend (or other distribution);
(b)	the cash equivalent of such Common Shares (or a portion of such Common Shares) was distributed hereunder to the Member after the record date but before the payment date for such dividend (or other distribution); and
(c)	such distribution from the Stock Account was either a lump sum distribution or the final payment of an installment distribution hereunder,

then the amount equal to such dividend (or other distribution) in respect of the Common Shares that were so distributed shall not be credited to the Member’s Stock Account, and such amount shall be distributed to the Member in cash as soon as practicable after the payment date for such dividend.

7. Minimum Deferral.

Retainer Fees shall be deferred as provided in this Paragraph 7. Absent the filing by a Director of an Election Agreement deferring into a Stock Account all Retainer Fees which are payable to such Director until a date which is on or after the Retainer Fee Minimum Deferral Date (as herein defined), the Director shall be deemed to have filed an election deferring such Fees until the Retainer Fee Minimum Deferral Date, electing to have such Fees deposited to a Stock Account and indicating that such Fees shall be distributed in a lump sum on the first day of the calendar quarter immediately following the Retainer Fee Minimum Deferral Date. For purposes hereof, the Retainer Fee Minimum Deferral Date shall be the later of (a) the date which is six (6) months and one day after the date upon which the Retainer Fees are credited to a Stock Account or (b) the date of the expiration of the Director’s then current Term.

8. Death of Member.

A Member may, in the Election Agreement described in Paragraph 3 above, provide that, in the event of his death prior to the date or dates on which his account balance is distributable, the account balance shall be distributed to his estate or designated beneficiary

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in a single distribution. This election shall be made at the time of the election contemplated by Paragraph 3 above. If no such election is made, the account balance shall be distributed to the estate of the deceased Member in a single distribution as soon as administratively feasible following the Member’s death.

9. Valuation of Accounts.

Each account shall be valued as of the last day of each calendar quarter until payment of the account in full to the Member in accordance with Paragraph 6. Each Member shall receive a statement of his accounts not less than annually.

10. Capital Changes.

In the event of any change in the number of outstanding Common Shares, $1.00 par value, of the Company by reason of any stock dividend or split, recapitalization, merger, consolidation, spin-off, reorganization, combination or exchange of shares or a similar corporate change, the Board shall determine, in its sole discretion, the extent to which such change equitably requires an adjustment in the number of Common Shares held in the Stock Accounts and such adjustment shall be made by the Company and shall be conclusive and binding on all Members of the Plan.

11. Deferred Vesting of Common Shares.

Retainer Fees credited to a Member’s Stock Account (whether as a result of filing an election under Paragraph 3(b) or a deemed election under Paragraph 7) shall not vest upon their being credited to the Member’s Stock Account, but shall become vested only upon the expiration of the Term of such Director to which the Fees relate or upon such Director’s earlier death, resignation due to disability or removal without cause. If a Director ceases to be a Director for any reason other than death, resignation due to disability or removal without cause, the Director shall forfeit all Retainer Fees credited to his Stock Account during his unexpired Term, along with any dividends attributable thereto, and the Member’s Stock Account shall be reduced accordingly.

12. Administration.

This Plan shall be administered by the Board or by an appropriate Committee of Directors selected by the Board. The Board or the appropriate Committee shall have the sole right and authority to interpret and construe the provisions of this Plan, and its decisions on any matter or dispute arising under the Plan shall be binding and conclusive upon the Members. If a Member is part of the Board or Committee that administers this Plan, he shall not participate in any deliberations or actions of the Board or such Committee relating exclusively to his membership or participation in this Plan.

13. Termination.

Notwithstanding any other provision of the Plan, the Board may terminate the Plan at any time for any reason without any liability to any Member, beneficiary or other person for any such termination or for any other action taken pursuant to this Paragraph 13. Following termination of the Plan, and notwithstanding the provisions of any Election

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Agreement entered into prior to such termination, no additional deferrals may be made hereunder, but all existing Deferred Accounts shall be administered in accordance with the Plan, as in effect immediately prior to termination, and shall be distributed in accordance with the terms of the Plan and the applicable Election Agreements, unless and until the Board elects to accelerate distributions as provided below. Subject to the limitations and conditions provided for in this Paragraph 13, at any time on or after the effective date of termination of the Plan, the Board, in its sole discretion, may elect to accelerate the distribution with respect to all Deferred Accounts to the extent permitted under Section 409A of the Code; provided, that (a) the termination of the Plan is not proximate to a downturn of the Company’s financial health; (b) the Company terminates and liquidates all plans, programs, agreements, and other arrangements (“Other Program”) that must be aggregated with the Plan in accordance with Treasury Regulation Section 1.409A-1(c) if a Member participated in the Other Program; and (c) the Company shall not adopt a new Other Program that would be required to be aggregated with the Plan in accordance with Treasury Regulation Section 1.409A-1(c) if a Member participated in the Other Program within three (3) years following termination of the Plan. Such accelerated distributions shall be made in a lump sum at a time selected by the Company in accordance with Section 409A of the Code; provided, that no accelerated distributions, other than those that could be made under the terms of the Plan absent its termination, shall be made earlier than twelve (12) months from the date that the Company takes all actions necessary to irrevocably terminate the Plan and cause all distributions to be made thereunder and all distributions shall be made no later than twenty-four (24) months from the date the Company takes all actions necessary to irrevocably terminate the Plan and cause all distributions to be made thereunder. Upon completion of distributions to all Members, or beneficiaries, as the case may be, no Member, beneficiary or person claiming under or through them, will have any claims in respect of the Plan.

14. Non-alienation.

The amounts credited to any accounts maintained under the Plan may not be pledged, assigned, or transferred by the Director for whom such account is maintained or by any other individual, and any purported pledge, assignment, or transfer shall be void and unenforceable.

15. Claims of Other Persons.

The provisions of the Plan shall in no event be construed as giving any person, firm or corporation any legal or equitable right as against the Company or any subsidiary, or the officers, employees, or directors of the Company or any subsidiary, except any such rights as are specifically provided for in the Plan or are hereafter created in accordance with the terms and provisions of the Plan.

16. Severability.

The invalidity and unenforceability of any particular provision of the Plan shall not affect any other provision hereof, and the Plan shall be construed in all respects as if such invalid or unenforceable provisions were omitted herefrom.

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17. Governing Law.

The provisions of the Plan shall be governed by and construed in accordance with the laws of the State of Ohio.

          IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its duly authorized officer as of the                     day of                    , 2007, effective January 1, 2008.

THE PROGRESSIVE CORPORATION

By:

Title:

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EX-10.3

Exhibit 10.3

THE PROGRESSIVE CORPORATION
DIRECTORS RESTRICTED STOCK DEFERRAL PLAN
(2008 Amendment and Restatement)

     WHEREAS, The Progressive Corporation (“Company”) maintains The Progressive Corporation Directors Restricted Stock Deferral Plan pursuant to a plan document dated February 1, 2004, and one amendment thereto; and

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

     NOW, THEREFORE, effective January 1, 2008, the Plan is hereby amended and restated in its entirety to provide as follows:

ARTICLE I

PURPOSE; PARTICIPATION

          1.1 Purpose. The purpose of this plan, which shall be known as The Progressive Corporation Directors Restricted Stock Deferral Plan (the “Plan”) is to provide directors of the Company who are not employees of the Company or its subsidiaries with an opportunity to defer the receipt of Common Shares with respect to Eligible Restricted Stock Awards.

ARTICLE II

DEFINITIONS

          For purposes of this Plan, the following terms shall have the following meanings:

          “Board” means the Board of Directors of the Company.

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          “Change in Control” means a change in the ownership of the Company, a change in effective control of the Company or a change in the ownership of a substantial portion of the Company’s assets, each as determined in accordance with Section 409A of the Code.

          “Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated pursuant thereto.

          “Committee” means the Compensation Committee of the Board.

          “Company” means The Progressive Corporation, an Ohio corporation, and its successors.

          “Company Directors Equity Plan” means any equity compensation plan for directors who are not employees of the Company or its subsidiaries maintained by the Company providing for the award of Restricted Stock, including but not limited to, The Progressive Corporation 2003 Directors Equity Incentive Plan.

          “Deferral Election” means an election, filed with the Committee, pursuant to which a Participant elects to have all or part of an Eligible Restricted Stock Award converted into Stock Units under this Plan, and to have such Stock Units credited to his or her Stock Account under the Plan pursuant to Section 4.2 hereof.

          “Designated Deferral Period” shall mean the deferral period selected by the Participant with respect to an Eligible Restricted Stock Award, which deferral period shall specify the date on which distribution of Shares with respect to such Eligible Restricted Stock Award shall be made or begin.

          “Dividend Equivalent Amounts” means the amount of dividends or other distributions to shareholders of the Company that a Participant would have received had the

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Participant’s Stock Units been actual Shares as of the date of a dividend or other distribution by the Company.

          “Eligible Restricted Stock Award” means an award of Restricted Stock made, or to be made, under a Company Directors Equity Plan.

          “Participant” means any director of the Company who is not an employee of the Company or its subsidiaries and who participates in this Plan by timely completing a Deferral Election.

          “Plan Year” means each calendar year during the term of this Plan.

          “Restricted Stock” means Shares awarded, or to be awarded, to a Participant in the form of restricted stock under and pursuant to the terms of a Company Directors Equity Plan.

          “Shares” means the Common Shares, $1.00 par value, of the Company.

          “Stock Account” means an individual bookkeeping account established for each Participant pursuant to Section 4.3 hereof, with respect to Stock Units credited to the Participant.

          “Stock Units” means the units credited to a Participant’s Stock Account, as described in Sections 4.2 and 4.4 hereof. Each Stock Unit credited to a Participant’s Stock Account shall represent the right, subject to the terms and conditions of this Plan, to receive one (1) Share at the end of the Participant’s Designated Deferral Period or at such other time as this Plan may specify for distribution to be made or begin.

ARTICLE III

PARTICIPATION

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          3.1 Eligibility and Participation. Directors who shall be eligible to participate in this Plan shall be those directors who are not employees of the Company or its subsidiaries.

ARTICLE IV

DEFERRAL ELECTIONS

          4.1 Deferral Elections. Each eligible director who elects to participate in this Plan for any Plan Year shall file a Deferral Election with the Committee before the beginning of such Plan Year, provided that any director who was not a director during the previous two Plan Years may file a Deferral Election with the Committee (i) within thirty (30) days after he/she is elected to the Board and (ii) prior to the grant of Restricted Stock which is the subject of such Deferral Election . The Deferral Election shall be in the form prescribed by the Committee, and in accordance with such rules and procedures as may be established by the Committee in its sole discretion. Once made, a Participant’s Deferral Election shall be irrevocable. A Deferral Election shall be deemed to have been made when the completed and executed election form is received and accepted by the Committee or its designated agent. A separate Deferral Election shall be made by a Participant with respect to all or part of each Eligible Restricted Stock Award to be subject to a Deferral Election during such Plan Year. If an eligible Participant fails to file an appropriate election form with respect to any Eligible Restricted Stock Award before the deadline provided in the first sentence of this Section, he or she shall be deemed to have elected not to make a Deferral Election for such Plan Year.

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          4.2 Effect of Deferral Election. If a Participant timely files a Deferral Election with the Committee with respect to an Eligible Restricted Stock Award, each share of Restricted Stock subject to a Deferral Election will be automatically cancelled immediately prior to vesting and will be replaced with a corresponding Stock Unit credited to the Participant’s Stock Account in accordance with Section 4.3. A timely Deferral Election with respect to an Eligible Restricted Stock Award will defer the delivery to the Participant of the Shares subject thereto until the end of the Participant’s Designated Deferral Period or such other time as this Plan may specify for distribution to be made or begin.

          4.3 Stock Accounts.

          The Committee shall establish and maintain a separate bookkeeping account in the name of each Participant who makes a Deferral Election during the course of his or her participation in the Plan. Each Participant’s Stock Account shall consist of the sum of the Stock Units credited to such Participant’s Stock Account. Each Participant’s Stock Account shall be adjusted as follows:

     (a) As of the date of vesting of an Eligible Restricted Stock Award to which a Participant’s Deferral Election is applicable, the Participant’s Stock Account shall be credited with that number of Stock Units equal to the number of Shares to which the Deferral Election relates;

     (b) As of the date on which a dividend is paid on (or any other distribution is made on account of) Shares, the Stock Account shall be credited with that number of Stock Units and fraction thereof equal to the number of Shares and fraction thereof that the Dividend Equivalent Amount would have purchased on that date based on the average of the high and low trading prices of the Shares on that date.

     (c) As of the date on which Shares are distributed to the Participant in accordance with Section 4.5, the Participant’s Stock Account shall be reduced by an equal number of Stock Units, and fractions thereof, if applicable.

In the event of any stock split, reverse split, combination or other changes that impact the Company’s capital structure, or Share status, each Participant’s Stock Account and the number

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of Stock Units credited thereto shall be equitably adjusted by the Committee in its sole discretion in a manner consistent with the treatment of outstanding equity awards pursuant to the Company Directors Equity Plan.

          4.4 Dividend Equivalent Amounts. Dividend Equivalent Amounts with respect to the Participant’s Stock Units shall result in the Participant’s Stock Account being credited with an additional number of Stock Units and/or fraction thereof equal to the Dividend Equivalent Amount divided by the average of the high and low trading prices of Shares on the date specified in Section 4.3(b) and shall become subject to the Deferral Election applicable to the Stock Units to which the Dividend Equivalent Amount relates.

          4.5 Distribution of Shares from Stock Accounts. Subject to any limitation set forth in this Plan or any other limitations as may be established by the Committee in its sole discretion, each Deferral Election shall specify the method of distribution with respect to the Eligible Restricted Stock Award which is subject to the Deferral Election. A Participant may elect to have his or her Stock Units with respect to any Eligible Restricted Stock Award which is subject to a Deferral Election distributed in any of the following number of installments following the earlier of (i) termination of the Participant’s service as a director of the Company or (ii) expiration of the Participant’s Designated Deferral Period with respect to such Eligible Restricted Stock Award:

          (1) a single lump sum;

          (2) 3 equal or substantially equal annual installments;

          (3) 5 equal or substantially equal annual installments; or

          (4) 10 equal or substantially equal annual installments.

A Participant may elect a different method of distribution with respect to each Eligible Restricted Stock Award that is subject to a Deferral Election. Distributions will be made or commence

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within thirty (30) days following expiration of the Participant’s Designated Deferral Period or termination of the Participant’s service as a director, as the case may be.

A Participant may elect to change the Designated Deferral Period and the method of distribution set forth in a Deferral Election. Each such change must be made in writing and on such forms as the Committee shall specify. Each such change must be delivered to the Committee at least one (1) year prior to the expiration of the Designated Deferral Period and shall delay the payment or commencement of the distribution for a period of at least five (5) years following the date the Designated Deferral Period otherwise would have expired. In the case of a distribution to be made in installments, the provisions of this paragraph will apply to each installment payment as if each such installment payment were a separate distribution.

Notwithstanding the foregoing, if a Change in Control occurs or a Participant dies, a distribution with respect to all the Stock Units then held in the Participant’s Stock Account shall be made to him/her or his/her beneficiaries in a single lump sum within thirty (30) days following the Change in Control or the date the Committee receives written notice of his/her death. Distributions with respect to the Stock Units credited to a Participant’s Stock Account under this Plan shall in all cases be satisfied by the delivery by the Company of a number of Shares equal to the number of Stock Units with respect to which such distribution is being made, except that any portion of such distribution that is derived from Dividend Equivalent Amounts or fractional shares shall be satisfied in cash, based on the average of the high and low trading prices of Shares on the business day immediately preceding such distribution. If a Participant is receiving a distribution in installments, Dividend Equivalent Amounts will continue to be credited with respect to the undistributed Stock Units remaining in such Participant’s Stock Account until all such Stock Units have been distributed.

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ARTICLE V

MISCELLANEOUS

          5.1 Beneficiaries. Each Participant shall have the right to designate in writing one or more beneficiaries to receive distributions in the event of the Participant’s death by filing with the Company a beneficiary designation on a form provided by the Committee. The designated beneficiary or beneficiaries may be changed by a Participant at any time prior to his or her death by the delivery to the Committee of a new beneficiary designation form. The change shall become effective only when the new beneficiary designation form is received and accepted by the Committee; provided, however, any beneficiary designation form received by the Committee after the designating Participant’s death will be disregarded. If no beneficiary shall have been designated, or if no designated beneficiary shall survive the Participant, distribution pursuant to this provision shall be made to the Participant’s estate.

          5.2 Administration. Except for those powers and duties expressly reserved for the Board hereunder, the Committee will have full power to administer the Plan. Such power includes, but is not limited to, the following authority:

               (a) To make and enforce such rules and regulations as it deems necessary or proper for the efficient administration of Plan;

               (b) To interpret the Plan and to decide all matters arising thereunder, including the right to resolve or remedy any ambiguities, errors, inconsistencies or omissions. All such interpretations shall be final and binding on all parties;

               (c) To determine the amount of distributions to be made to each Participant and beneficiary or other person in accordance with the provisions of the Plan;

               (d) To authorize distributions under the Plan;

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

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

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

               (h) By written instrument to delegate any of the foregoing powers to one or more designated officers or employees of the Company or other persons.

          All decisions of the Committee or its designees shall be binding upon all Participants and their respective legal representatives, successors and assigns, and any and all persons claiming under or through any of them. No member of the Committee or any of its designees shall be liable to any Participant or to the Company for any determination made within the scope of the administrative and interpretive functions provided in this Plan. No member of the Committee shall participate in any discussion or determination involving his or her own rights, benefits or obligations under this Plan.

          5.3 Reports. Until a Participant’s entire Stock Account shall have been distributed in full, the Company will furnish or make available to the Participant a written or electronic report, at least annually, setting forth any changes in such Account and the amounts credited to such Account.

          5.4 Assignment and Alienation of Benefits. The right of each Participant to any account, benefit, Stock Unit, right or distribution hereunder shall not, to the extent permitted by law, be subject in any manner to attachment or other legal process for the debts of such Participant, and no account, benefit, Stock Unit, right or distribution shall be subject to anticipation, alienation, sale, pledge, transfer, assignment or encumbrance; provided, however, the Company shall have the unrestricted right to set off against or recover out of any distributions due a Participant, beneficiary or other person at the time such distributions would otherwise have

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been made hereunder, any amounts owed the Company or any subsidiary of the Company by such Participant, beneficiary or other person.

          5.5 Director and Shareholder Status. Nothing in the Plan shall interfere with or limit in any way the right of the Company or its shareholders to terminate any Participant’s service as a director, at any time, nor confer upon any Participant any right to continue as a director of the Company or to be nominated for election to the Board at any time. The Plan will not give any person any right or claim to any benefits under the Plan unless such right or claim has specifically accrued under the terms of the Plan. Participation in the Plan shall not create any rights in a Participant (or any other person) as a shareholder of the Company until Shares are registered in the name of, and distributed to, the Participant (or such other person).

          5.6 Assets. No assets shall be segregated or earmarked in respect of any Stock Units, Dividend Equivalent Payments or Stock Accounts. The Plan and the crediting of Stock Accounts hereunder shall not constitute a trust and shall be structured solely for the purpose of recording an unsecured contractual obligation. All amounts payable pursuant to the terms of this Plan shall be paid from the general assets of the Company and in no event shall any Participant or beneficiary have any claims or rights to any payment hereunder that are superior to any claims or rights of any general creditor of the Company.

          5.7 Taxes. The Company shall not be responsible for the tax consequences under federal, state or local law of any election made by any Participant under the Plan. The Company shall have the right to make required information reporting and/or to withhold or deduct from any distribution to be made pursuant to this Plan, or to otherwise require prior to the distribution of any amount hereunder, payment by the Participant of any federal, state or local taxes required by law to be withheld with respect to any such distribution to the Participant. In

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addition, to the extent the Company shall be required, prior to the date on which distributions are to be made to a Participant under this Plan, to withhold any taxes in connection with any Stock Units or Dividend Equivalent Amounts credited to a Participant’s accounts under this Plan, the Participant agrees that the Company shall have the right to make such withholding or to require direct payment of such withholding taxes by the Participant to the Company.

          5.8 Amendment. Notwithstanding any other provision of this Plan, the Board may amend this Plan at any time for any reason without liability to any Participant, beneficiary or other person for any such amendment or for any other action taken pursuant to this Section 5.8, provided that no such amendment shall be made retroactively in a manner that would deprive any Participant of any rights or benefits which have accrued to his/her benefit under the Plan as of the date such amendment is proposed to be effective, unless such amendment is necessary to comply with applicable law.

          5.9 Termination. Notwithstanding any other provision of this Plan, the Board may terminate this Plan at any time for any reason without any liability to any Participant, beneficiary or other person for any such termination or for any other action taken pursuant to this Section 5.9. Following termination of this Plan, and notwithstanding the provisions of any Deferral Election entered into prior to such termination, no additional deferrals may be made hereunder, but all existing Stock Accounts shall be administered in accordance with this Plan, as in effect immediately prior to termination, and shall be distributed in accordance with the terms of this Plan and the applicable Deferral Elections, unless and until the Board elects to accelerate distributions as provided below. Subject to the limitations and conditions provided for in this Section 5.9, at any time on or after the effective date of termination of this Plan, the Board, in its sole discretion, may elect to accelerate the distribution with respect to all Stock Units in all Stock

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Accounts to the extent permitted under Section 409A of the Code; provided, that (a) the termination of this Plan is not proximate to a downturn of the Company’s financial health; (b) the Company terminates and liquidates all plans, programs, agreements, and other arrangements (“Other Program”) that must be aggregated with this Plan in accordance with Treasury Regulation Section 1.409A-1(c) if a Participant participated in the Other Program; and (c) the Company shall not adopt a new Other Program that would be required to be aggregated with this Plan in accordance with Treasury Regulation Section 1.409A-1(c) if a Participant participated in the Other Program within three (3) years following termination of the Plan. Such accelerated distributions shall be made in a lump sum at a time selected by the Company in accordance with Section 409A of the Code; provided, that no accelerated distributions, other than those that could be made under the terms of the Plan absent its termination, shall be made earlier than twelve (12) months from the date that the Company takes all actions necessary to irrevocably terminate the Plan and cause all distributions to be made thereunder and all distributions shall be made no later than twenty-four (24) months from the date the Company takes all actions necessary to irrevocably terminate the Plan and cause all distributions to be made thereunder. Upon completion of distributions to all Participants, or beneficiaries, as the case may be, no Participant, beneficiary or person claiming under or through them, will have any claims in respect of this Plan.

          5.10 Notices to Committee. The Committee shall designate one or more addresses to which notices and other communications to the Committee shall be sent with respect to this Plan. No notice or other communication shall be considered to have been given to or received by the Committee until it has been delivered to the Committee’s attention at one of such designated addresses.

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          5.11 No Liability. Participation in the Plan is entirely at the risk of each Participant. Neither the Company, the Committee, the Board nor any other person associated with this Plan shall have any liability for any loss or diminution in the value of Stock Accounts, or for any failure of this Plan to effectively defer recognition of income or to achieve any Participant’s desired tax treatment or financial results.

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

          5.13 Securities Law Provisions. The issuance and distribution of Shares pursuant to this Plan will not be registered under the Federal or any state securities laws. The Shares will be “restricted securities” as that term is defined under Rule 144 of the Securities Act of 1933 (the “Securities Act”) and may not be sold or transferred absent registration under the Securities Act or in accordance with an applicable exemption.

          5.14 Applicable Law. This Plan shall be interpreted under the laws of the State of Ohio.

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          IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its duly authorized officer as of the ___ day of ___, 2007.

THE PROGRESSIVE CORPORATION

By:

Title:

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