S-8

As filed with the Securities and Exchange Commission on April 21, 2003

Registration No.             

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933

THE PROGRESSIVE CORPORATION
(Exact name of registrant as specified in its charter)

OHIO
(State or other jurisdiction of
incorporation or organization) 34-0963169
(I.R.S. Employer Identification Number)

6300 Wilson Mills Road, Mayfield Village, Ohio 44143
(Address of Principal Executive Offices) (Zip Code)

THE PROGRESSIVE CORPORATION 2003 INCENTIVE PLAN
(Full title of the plan)

Charles E. Jarrett, Secretary
The Progressive Corporation
300 North Commons Boulevard
Mayfield Village, Ohio 44143
(Name and address of agent for service)

(216) 461-5000
(Telephone number, including area code, of agent for service)

CALCULATION OF REGISTRATION FEE

			Proposed maximum		Proposed maximum
Title of Securities	Amount to be		offering price per		aggregate offering		Amount of
to be registered	registered1		share2		price2		registration fee
Common Shares, $1.00 par value		5,000,000	$	64.845	$	324,225,000	$	26,229.80

¹ Pursuant to Rule 416(a), the amount of securities registered under this Registration Statement shall include an indeterminate number of additional Common Shares that may become issuable as a result of stock splits, stock dividends or similar transactions pursuant to the anti-dilution provisions of the Plan.

² The registration fee has been calculated pursuant to Rules 457(c) and (h) based on the average of the high and low prices of such Common Shares reported in the NYSE consolidated reporting system on April 15, 2003.

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PART II

INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT

Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE

     The following documents, filed with the Securities and Exchange Commission (the “Commission”) by the Registrant, are incorporated into this Registration Statement by reference:

(1)	The Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002;
(2)	All other reports filed by the Registrant pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “1934 Act”) since the end of the fiscal year covered by the report referred to in (1) above; and
(3)	The description of the Common Shares contained in the Registrant’s Registration Statement filed on Form 10 under the 1934 Act on file with the Commission and any amendment or report filed for the purpose of updating such description.

     All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act subsequent to the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all securities offered hereunder have been sold, or which de-registers all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents.

Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS

     Article VI of the Code of Regulations of the Registrant provides for indemnification of any current or former director, officer or employee in certain instances, as permitted under Section 1701.13(E) of the Ohio Revised Code, against expenses, judgments, decrees, fines, penalties or amounts paid in settlement in connection with the defense of any past, pending or threatened action, suit or proceeding, criminal or civil, to which he or she was, is or may be a party by reason of his or her status as such director, officer or employee.

     A current or former director, officer or employee is entitled to indemnification if he or she is successful on the merits or otherwise in the defense of any such action, suit or proceeding or if a determination is made pursuant to Article VI of the Code of Regulations (1) by the directors of the Registrant acting at a meeting at which a quorum consisting of directors who neither were nor are parties to or threatened with any such action, suit or proceeding is present or (2) by the shareholders of the Registrant at a meeting held for such purpose by the affirmative vote of the holders of shares entitling them to exercise a majority of the voting power of the Registrant on such proposal or without a meeting by the written consent of the holders of shares entitling them to exercise two-thirds of the voting power of the Registrant on such proposal, that such director, officer or employee (a) was not, and has not been adjudicated to have been, negligent or guilty of misconduct in the performance of his or her duty to the Registrant, (b) acted in good faith and in a manner he or she reasonably believed to be in the best interest of the Registrant and (c) in any matter which is the subject of a criminal action, suit or proceeding, had no reasonable cause to believe that his or her conduct was unlawful.

     The expenses of each director, officer or employee incurred in defending any such action, suit or proceeding, whether threatened or actual, may be paid by the Registrant as they are incurred in advance of the final disposition of such action, suit or proceeding, as authorized by the Board of Directors in the specific case, upon receipt of an undertaking by or on behalf of the director, officer or employee to repay such expenses unless it shall ultimately be determined that he is entitled to be indemnified by the corporation.

     Additionally, Section 1701.13(E)(5)(a) of the Ohio Revised Code provides that, unless prohibited by specific reference in a corporation’s articles of incorporation or code of regulations (which prohibition is not contained in the Registrant’s Articles of Incorporation or Code of Regulations), a corporation shall pay a director’s expenses, including attorneys’ fees, as such expenses are incurred, in defending an action, suit or proceeding brought against a director in such capacity, whether such action, suit or proceeding is brought by a third party or by or in the right of the corporation,

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provided the director delivers to the corporation an undertaking to (a) repay such amount if it is proved by clear and convincing evidence in a court of competent jurisdiction that his or her action or failure to act was undertaken with deliberate intent to injure the corporation or with reckless disregard for the best interests of the corporation and (b) reasonably cooperate with the corporation in such action, suit or proceeding.

     Section 1701.13(E)(7) of the Ohio Revised Code provides that a corporation may purchase insurance or furnish similar protection for any director, officer or employee against any liability asserted against him or her in any such capacity, whether or not the corporation would have power to indemnify him or her under Ohio law. Such insurance may be purchased from or maintained with a person in which the corporation has a financial interest.

     The Registrant maintains directors and officers liability insurance in the amount of $25,000,000 under a policy issued by an unaffiliated insurance company. The risks covered by such policy include certain liabilities under the securities laws.

Item 8. EXHIBITS

4(a)	The Progressive Corporation 2003 Incentive Plan
4(b)	Form of Restricted Stock Award Agreement (Time-Based Award)
4(c)	Form of Restricted Stock Award Agreement (Performance-Based Award)
4(d)	Amended Articles of Incorporation, as amended, of the Registrant
4(e)	Code of Regulations of the Registrant
5	Opinion of Baker & Hostetler LLP
23(a)	Consent of PricewaterhouseCoopers L.L.P., Independent Accountants
23(b)	Consent of Baker & Hostetler LLP (included in Exhibit 5)
24(a)	Powers of Attorney
24(b)	Resolutions of the Board of Directors of the Registrant as to Power of Attorney, certified by Secretary of the Registrant

Item 9. UNDERTAKINGS

     The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

(i)

to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii)

to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

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(iii)	to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;
provided, however, that paragraphs (i) and (ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement.

(2)	That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)	To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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SIGNATURES

     The Registrant. Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Mayfield Village, Ohio, on April 21, 2003.

THE PROGRESSIVE CORPORATION

By: /s/ Charles E. Jarrett     
       Charles E. Jarrett, Secretary

     Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities indicated on April 21, 2003.

Signature	Title
* Peter B. Lewis	Director and Chairman of the Board
/s/ Glenn M. Renwick Glenn M. Renwick	Director, President and Chief Executive Officer
/s/ W. Thomas Forrester W. Thomas Forrester	Vice President and Chief Financial Officer
/s/ Jeffrey W. Basch Jeffrey W. Basch	Vice President and Chief Accounting Officer
* Milton N. Allen	Director
* B. Charles Ames	Director
* Charles A. Davis	Director
* Stephen R. Hardis	Director
* Bernadine P. Healy	Director

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* Jeffrey D. Kelly	Director
* Philip A. Laskawy	Director
* Norman S. Matthews	Director
* Donald B. Shackelford	Director

* Charles E. Jarrett, by signing his name hereto, does sign this document on behalf of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed as an exhibit to this Registration Statement.

/s/ Charles E. Jarrett                    
Charles E. Jarrett, Attorney-In-Fact

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EXHIBIT INDEX

Exhibit No.	Form S-8		If Incorporated By Reference,
Under Reg. S-K,	Exhibit		Document with which Exhibit
Item 601	No.	Description	was previously filed with SEC
(4)	4(a)	The Progressive Corporation 2003 Incentive Plan	Attached
(4)	4(b)	Form of Restricted Stock Award Agreement (Time-Based Award)	Attached
(4)	4(c)	Form of Restricted Stock Award Agreement (Performance-Based Award)	Attached
(4)	4(d)	Amended Articles of Incorporation, as amended, of the Registrant	Attached
(4)	4(e)	Code of Regulations of the Registrant	Attached
(5)	5	Opinion of Baker & Hostetler LLP	Attached
(23)	23(a)	Consent of PricewaterhouseCoopers L.L.P., Independent Accountants	Attached
(23)	23(b)	Consent of Baker & Hostetler LLP	Included in Exhibit 5
(24)	24(a)	Powers of Attorney	Attached
(24)	24(b)	Resolutions of the Board of Directors of the Registrant as to Power of Attorney, certified by Secretary of the Registrant	Attached

-7- EX-4.A 3 l00196aexv4wa.txt EX-4(A) 2003 INCENTIVE PLAN Exhibit 4(a) THE PROGRESSIVE CORPORATION 2003 INCENTIVE PLAN SECTION 1. ESTABLISHMENT; PURPOSE; DEFINITIONS. (a) The Progressive Corporation, an Ohio corporation (the "Company"), hereby establishes an incentive compensation plan for key employees, to be known as "The Progressive Corporation 2003 Incentive Plan" (the "Plan"), as set forth in this document. The Plan permits the grant of Restricted Stock and Stock Options to key employees of the Company and its Subsidiaries and Affiliates. (b) The purpose of the Plan is to enable the Company to attract, retain and reward key employees of the Company and its Subsidiaries and Affiliates and strengthen the mutuality of interests between such key employees and the Company's shareholders by offering such key employees equity or equity-based incentives. (c) For purposes of the Plan, the following terms shall have the meanings set forth below: "Affiliate" means any entity (other than the Company and its Subsidiaries) that is designated by the Board as a participating employer under the Plan. "Award" means any award of Restricted Stock or Stock Options under the Plan. "Award Agreement" means an agreement setting forth the terms and conditions applicable to an Award granted to a Participant under the Plan. "Board" means the Board of Directors of the Company. "Book Value" means, as of any given date, on a per share basis (1) the shareholders' equity in the Company as of the end of the immediately preceding fiscal year as reflected in the Company's audited consolidated balance sheet as of such year-end date, subject to such adjustments as the Committee shall specify at or after grant, divided by (2) the number of outstanding shares of Stock as of such year-end date, subject to such adjustments as the Committee shall specify for events subsequent to such year-end date. "Change in Control" has the meaning assigned to it in Section 7(b). "Change in Control Price" has the meaning assigned to it in Section 7(d). "Code" means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto. "Committee" means the Compensation Committee of the Board. "Company" means The Progressive Corporation, an Ohio corporation, or any successor corporation. -1- "Disability" means a mental or physical condition which, in the opinion of the Committee, renders a Participant unable or incompetent to carry out the job responsibilities held by such Participant or the duties assigned to such Participant at the time such condition arose or was incurred, and which is expected to be permanent or for an indefinite duration. "Eligible Persons" has the meaning assigned to it in Section 4. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Expiration Date" means the date upon which an Award, or any portion thereof, is scheduled to expire or terminate if not exercised or vested prior thereto, as determined by the Committee. "Fair Market Value" means, as of any given date, the mean between the highest and lowest quoted selling price of the Stock on such date on the New York Stock Exchange or, if no such sale of the Stock occurs on the New York Stock Exchange on such date, then such mean price on the next preceding day on which the Stock was traded. If the Stock is no longer traded on the New York Stock Exchange, then the Fair Market Value of the Stock shall be determined by the Committee in good faith. "Family Member" means a Participant's child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships, a trust in which any of these persons (and/or the Participant) holds more than 50% of the beneficial interest, a foundation in which any of these persons (and/or the Participant) controls the management of assets and any other entity in which any of these persons (and/or the Participant) owns more than 50% of the voting interests. "Incentive Stock Option" means any Stock Option intended to be and designated as an "Incentive Stock Option", which satisfies the requirements of Section 422 of the Code or any successor section thereto. "Non-Employee Director" shall have the meaning set forth in Rule 16b-3(b)(3)(i) promulgated by the Securities and Exchange Commission under the Exchange Act, or any successor definition adopted by the Commission. "Non-Qualified Stock Option" means any Stock Option that is not an Incentive Stock Option. "Option Exercise Price" means the price at which a share of Stock may be purchased by a Participant pursuant to the exercise of an Option, as determined by the Committee and set forth in the related Option Award Agreement. "Option Term" shall have the meaning assigned to it in Section 6(b)(2). "Outside Director" shall have the meaning set forth in Section 162(m) of the Code and the regulations promulgated thereunder. -2- "Participant" means an Eligible Person who holds an outstanding Award granted under the Plan. "Performance-Based Restricted Stock" means an Award of Restricted Stock, which will vest upon the achievement of Performance Goals established by or under the direction of the Committee and set forth in the related Award Agreement and which is intended to qualify for the exemption from the limitation on deductibility imposed by Section 162(m) of the Code. "Performance Goals" means the performance goals established by the Committee with respect to any Award, which shall be based on one or more of the following measures: earned premiums, operating income, net income, combined ratio, underwriting income and/or operating ratios (including loss ratio, loss adjustment expense ratio and/or expense ratio). Performance goals may be measured on a corporate, subsidiary or business unit basis, or any combination thereof. Performance goals may reflect absolute entity performance or a relative comparison of entity performance to the performance of a peer group of entities or other external measure. "Plan" means The Progressive Corporation 2003 Incentive Plan, as amended from time to time. "Potential Change in Control" has the meaning assigned to it in Section 7(c). "Restricted Stock" means an Award of shares of Stock that is made pursuant to Section 5 and is subject to restrictions. "Restriction Period" and "Minimum Restriction Period" shall have the meanings assigned to them in Section 5(b)(6). "Section 16 Participant" means a Participant under the Plan who is then subject to Section 16 of the Exchange Act. "Stock" means the Common Shares, $1.00 par value per share, of the Company. "Stock Option" or "Option" means any option to purchase shares of Stock that is granted pursuant to Section 6. "Subsidiary" means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. "Time-based Restricted Stock" means an Award of Restricted Stock that will vest upon the lapse of a time period determined by or under the direction of the Committee and specified in the related Award Agreement. SECTION 2. ADMINISTRATION. The Plan shall be administered by the Committee. The Committee shall consist of not less than three directors of the Company, all of whom shall be Non-Employee Directors and Outside Directors. Committee members shall be appointed by the Board and shall serve on the Committee at the -3- pleasure of the Board. The functions of the Committee specified in the Plan shall be exercised by the Board if and to the extent that no Committee exists which has the authority to so administer the Plan. The Committee shall have full power to interpret and administer the Plan and full authority to select the individuals to whom Awards will be granted and to determine the type and amount of Awards to be granted to each Participant, the consideration, if any, to be paid for such Awards, the timing of such Awards, the terms and conditions of Awards granted under the Plan and the terms and conditions of the related Award Agreements which will be entered into with Participants. As to the selection of and grant of Awards to Participants who are not Section 16 Participants, the Committee may delegate its responsibilities to members of the Company's management consistent with applicable law. The Committee shall have the authority to adopt, alter, change and repeal such rules, regulations, guidelines and practices governing the Plan, from time to time, as it shall deem advisable; to interpret the terms and provisions of the Plan and any Award issued under the Plan (and any Award Agreement relating thereto); to direct employees of the Company or other advisors to prepare such materials or perform such analyses as the Committee deems necessary or appropriate; and otherwise to supervise the administration of the Plan. Any interpretation and administration of the Plan by the Committee, and all actions and determinations of the Committee, shall be final, binding and conclusive on the Company, its shareholders, Subsidiaries, Affiliates, all Participants in the Plan, their respective legal representatives, successors and assigns and all persons claiming under or through any of them. No member of the Board or of the Committee shall incur any liability for any action taken or omitted, or any determination made, in good faith in connection with the Plan. SECTION 3. STOCK SUBJECT TO THE PLAN. (a) Aggregate Stock Subject to the Plan. Subject to adjustment as provided in Section 3(c) below, the total number of shares of Stock reserved and available for Awards under the Plan is 5,000,000. Any Stock issued hereunder may consist, in whole or in part, of authorized and unissued shares or treasury shares. (b) Forfeiture or Termination of Awards or Stock. If any Stock subject to any Award granted hereunder is forfeited or an Award otherwise terminates or expires without the issuance of Stock, the Stock that is subject to such Award shall again be available for distribution in connection with future Awards under the Plan as set forth in Section 3(a), unless the Participant who had been awarded such forfeited Stock or the expired or terminated Award has theretofor received dividends or other benefits of ownership with respect to such Stock. For purposes hereof, a Participant shall not be deemed to have received a benefit of ownership with respect to such Stock by the exercise of voting rights or the accumulation of dividends which are not realized due to the forfeiture of such Stock or the expiration or termination of the related Award without issuance of such Stock. (c) Adjustment. In the event of any merger, reorganization, consolidation, recapitalization, share dividend, share split, reverse share split, combination of shares or other change in the corporate or capital structure of the Company affecting the Stock, such substitution or adjustment shall be made in the aggregate number of shares of Stock reserved for issuance under the Plan, in the maximum number of shares that may be subject to Awards granted to any Participant during any calendar year or other period, in the number and Option Exercise Price of -4- shares subject to outstanding Options granted under the Plan and in the number of shares subject to Restricted Stock Awards granted under the Plan as may be approved by the Committee, in its sole discretion, to prevent dilution or enlargement of rights; provided that the number of shares subject to any Award shall always be a whole number. Any fractional shares shall be eliminated. (d) Annual Award Limitation. No Participant may be granted Awards under the Plan with respect to an aggregate of more than 200,000 shares of Stock (subject to adjustment as provided in Section 3(c) hereof) during any calendar year. SECTION 4. ELIGIBILITY. Officers and other key employees of the Company and its Subsidiaries and Affiliates (but excluding members of the Committee and any other person who serves only as a director) who are responsible for or contribute to the management, growth or profitability of the business of the Company or its Subsidiaries or Affiliates ("Eligible Persons") are eligible to be granted Awards under the Plan. SECTION 5. RESTRICTED STOCK. (a) Grant. Subject to the terms and conditions of the Plan, Restricted Stock may be awarded to Eligible Persons at any time and from time to time as shall be determined by the Committee. The Committee shall determine the individuals to whom, and the time or times at which, grants of Restricted Stock will be made; the number of shares of Restricted Stock to be awarded to each Participant; the price (if any) to be paid by the Participant (subject to Section 5(b)); whether the Awards will consist of Performance-Based Restricted Stock or Time-Based Restricted Stock or a combination thereof; the date or dates or conditions upon which Restricted Stock Awards will vest, whether through lapse of time or the achievement of specified Performance Goals; the Performance Goal or Goals, if any, that must be satisfied as a condition to the vesting of any Restricted Stock Award; the period or periods within which such Restricted Stock Awards may be subject to forfeiture; and the other terms and conditions of such Awards in addition to those set forth in Section 5(b). The Committee may condition the grant or vesting of Restricted Stock upon the lapse of time or the attainment of specified Performance Goals or such other factors as the Committee may determine in its sole discretion. (b) Terms and Conditions. Restricted Stock awarded under the Plan shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall deem desirable. A Participant who receives a Restricted Stock Award shall not have any rights with respect to such Award, unless and until such Participant has executed an Award Agreement evidencing the Award in the form approved from time to time by the Committee and has delivered a fully executed copy thereof to the Company, and has otherwise complied with the applicable terms and conditions of such Award. (1) The purchase price for shares of Restricted Stock shall be determined by the Committee at the time of grant and may be equal to their par value or zero. -5- (2) Awards of Restricted Stock must be accepted by executing the related Restricted Stock Award Agreement, delivering an executed copy of such Restricted Stock Award Agreement to the Company and paying whatever price (if any) is required under Section 5(b)(1). (3) Subject to Section 5(b)(5), each Participant receiving a Restricted Stock Award shall be issued a stock certificate in respect of such shares of Restricted Stock. Such certificate shall be registered in the name of such Participant, and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Award. (4) Subject to Section 5(b)(5), the stock certificates evidencing such shares of Restricted Stock shall be delivered to and held in custody by the Company, or its designee, until the restrictions thereon shall have lapsed or any conditions to the vesting of such Award have been satisfied. As a condition of any Restricted Stock Award, the Participant shall deliver to the Company a stock power, endorsed in blank, relating to the Stock covered by such Award. (5) In the discretion of the Company, any shares of Restricted Stock awarded to any Participant may be issued and held in book entry form. In such event, no stock certificates evidencing such shares will be issued and the applicable restrictions will be noted in the records of the Company's transfer agent and in the book entry system. (6) A Participant may be granted an Award of Time-Based Restricted Stock or Performance-Based Restricted Stock, or a combination thereof. Time-Based Restricted Stock Awards will vest and all restrictions thereon will terminate upon the lapse of a period of time specified by the Committee, provided all other conditions to vesting have been met. Performance-Based Restricted Stock Awards will vest and all restrictions thereon will terminate upon the certification by the Committee of the achievement of the specified Performance Goals, provided all other conditions to vesting have been met. (7) Subject to the provisions of this Plan and the related Restricted Stock Award Agreement, during the period set by the Committee commencing with the date of a Restricted Stock Award (the "Restriction Period"), the Participant who has received such Award shall not be permitted to sell, transfer, pledge, assign or otherwise encumber the shares of Restricted Stock which are subject to such Award. The Restriction Period shall not be less than six months and one day in duration ("Minimum Restriction Period") and may be a function of time or the achievement of Performance Goals, or both, as determined by the Committee at the time of grant. Subject to these limitations and the Minimum Restriction Period requirement, the Committee, in its sole discretion, may provide for the lapse of such restrictions in installments and may accelerate or waive such restrictions, in whole or in part, based on service, performance or such other factors and criteria as the Committee may determine, in its sole discretion; provided that any such action does not affect any Award held by any Participant who is subject to Section 162(m) of the Code. (8) Except as provided in this Section 5(b)(8), Section 5(b)(7) or Section 5(b)(9), the Participant shall have, with respect to the shares of Restricted Stock awarded, all of the rights of a shareholder of the Company, including the right to vote the Stock and the right to receive any dividends. The Committee, in its sole discretion, as determined at the time -6- of award, may permit or require the payment of cash dividends to be deferred and, if the Committee so determines, reinvested, subject to Section 10(f), in additional Restricted Stock to the extent shares are available under Section 3, or otherwise reinvested. Stock dividends issued with respect to Restricted Stock shall be treated as additional shares of Restricted Stock that are subject to the same restrictions and other terms and conditions that apply to the shares with respect to which such dividends are issued. (9) No Restricted Stock shall be transferable by any Participant other than by will or by the laws of descent and distribution, except that, if determined by the Committee at the time of grant and so provided in the applicable Award Agreement, a Participant may transfer Restricted Stock during his or her lifetime to one or more of his or her Family Members, provided that no consideration is paid for the transfer and that the transfer would not result in the loss of any exemption under Rule 16b-3 of the Exchange Act with respect to any Restricted Stock. The transferee of Restricted Stock will be subject to all restrictions, terms and conditions applicable to the Restricted Stock prior to its transfer, except that the Restricted Stock will not be further transferable by the transferee other than by will or by the laws of descent and distribution. (10) If a Participant's employment by the Company or any Subsidiary or Affiliate terminates by reason of death, any Restricted Stock held by such Participant at the time of death shall thereafter vest or any restrictions lapse, to the extent such Restricted Stock would have become vested or no longer subject to restriction within one year from the time of death had the Participant continued to fulfill all of the conditions of the Restricted Stock Award during such period; provided that, if the vesting of such Award is conditioned on or subject to the achievement of specified Performance Goals, such Performance Goals are achieved prior to the earlier of the expiration of such one year period or the Expiration Date of the Award, subject in all cases to the Minimum Restriction Period requirement. The balance of the Restricted Stock shall be forfeited. (11) If a Participant's employment by the Company or any Subsidiary or Affiliate terminates by reason of Disability, any Restricted Stock then held by such Participant shall thereafter vest or any restriction lapse, to the extent such Restricted Stock would have become vested or no longer subject to restrictions within one year from the time of such termination had the Participant continued to fulfill all of the conditions of the Restricted Stock Award during such period; provided that, if the vesting of such Award is conditioned on or subject to the achievement of specified Performance Goals, such Performance Goals are achieved prior to the earlier of the expiration of such one year period or the Expiration Date of the Award, subject in all cases to the Minimum Restriction Period requirement. The balance of the Restricted Stock shall be forfeited. (12) Unless otherwise determined by the Committee at or after the time of granting any Restricted Stock Award, and except as provided in Section 5(b)(13) hereof, if a Participant's employment by the Company or any Subsidiary or Affiliate terminates for any reason other than death or Disability, all Restricted Stock held by such Participant which is unvested or subject to restriction at the time of such termination shall thereupon be forfeited. (13) If a Participant's employment with the Company (or any of its Subsidiaries or Affiliates) terminates due to a Qualified Retirement (as defined below), the following provisions shall apply (subject in all cases to Section 5(b)(13)(C) hereof): -7- (A) if and to the extent that any Award Installment (as defined below) is vested as of the Qualified Retirement Date (as defined below), all shares of Restricted Stock held by the Participant in connection with such Award Installment shall be free of applicable restrictions and delivered to the Participant (subject to Section 5(b)(5)); (B) (i) with respect to all Time-Based Restricted Stock Awards held by the Participant on his or her Qualified Retirement Date, if and to the extent that any Award Installment is not vested as of such Qualified Retirement Date, such Award Installment (a) shall remain in effect with respect to fifty percent (50%) of the shares of Stock covered thereby and, as to such shares, shall immediately vest on the Participant's Qualified Retirement Date, and shall thereafter be free of applicable restrictions and delivered to the Participant (subject to Section 5(b)(5)); and (b) shall terminate, effective as of the Qualified Retirement Date, with respect to the remaining fifty percent (50%) of the shares covered by such Award Installment. (ii) with respect to all Performance-Based Restricted Stock Awards held by the Participant on his or her Qualified Retirement Date, if and to the extent that any Award Installment is not vested as of the Qualified Retirement Date, such Award Installment (a) shall remain in effect with respect to fifty percent (50%) of the shares of Stock covered thereby and, as to such shares, shall vest upon the achievement of the related Performance Goals (unless such Performance Goals are not achieved prior to the Expiration Date applicable to such Award Installment, in which event the Award Installment will terminate, and all shares of Restricted Stock covered by such Award Installment will be forfeited, as of such Expiration Date), and (b) shall terminate, effective as of the Qualified Retirement Date, with respect to the remaining fifty percent (50%) of the shares covered by such Award Installment; provided that, with respect to any member of the Company's Senior Management Group (as defined below) who has given the Company at least one (1) full year's prior written notice of his or her retirement, upon any Qualified Retirement of such individual, no portion of any Performance-Based Restricted Stock Awards held by such Participant on his or her Qualified Retirement Date will terminate on such date, but such Awards will remain in effect and one hundred percent (100%) of the shares subject to each such Award held by such Participant on his or her Qualified Retirement Date shall vest as of the date on which the applicable Performance Goals have been achieved (unless such Performance Goals are not achieved prior to the Expiration Date applicable to such Award, in which event the Award will terminate, and all shares of Restricted Stock covered by such Award will be forfeited, as of such Expiration Date). (C) if the Committee determines that the Participant is or has engaged in any Disqualifying Activity (as defined below), then (1) to the extent that any Restricted Stock Award held by such Participant has vested as of the -8- Disqualification Date (as defined below), the Participant shall have the right to receive all shares of Restricted Stock which are vested as of such date (subject to Section 5(b)(5)) and (2) to the extent that any Restricted Stock Award held by such Participant has not vested as of the Disqualification Date, the Award shall terminate, and all related shares shall be forfeited, as of such date. Any determination by the Committee, which may act upon the recommendation of the Chief Executive Officer or other senior officer of the Company, that the Participant is or has engaged in any Disqualifying Activity, and as to the Disqualification Date, shall be final and conclusive. (D) For purposes of Section 5(b)13, the following terms are defined as follows: (i) QUALIFIED RETIREMENT - any termination of a Participant's employment with the Company or its Subsidiaries or Affiliates for any reason (other than death, Disability or an involuntary termination for Cause) if, at or immediately prior to the date of such termination, the Participant satisfies both of the following conditions: (a) the Participant is 55 year of age or older; and (b) the sum of the Participant's age and completed years of service as an employee of the Company or its Subsidiaries or Affiliates (disregarding fractions in both cases) shall total 70 or more. (ii) QUALIFIED RETIREMENT DATE - the date as of which the Participant's employment with the Company or its Subsidiaries or Affiliates shall terminate pursuant to a Qualified Retirement. (iii) DISQUALIFYING ACTIVITY - means any of the following acts or activities: (a) directly or indirectly serving as a principal, shareholder, partner, director, officer, employee or agent of, or as a consultant, advisor or in any other capacity to, any business or entity which competes with the Company or its Subsidiaries or Affiliates in any business or activity then conducted by the Company or any of its Subsidiaries or Affiliates to an extent deemed material by the Committee; or (b) any disclosure by the Participant, or any use by the Participant for his or her own benefit or for the benefit of any other person or entity (other than the Company or its Subsidiaries or Affiliates), of any confidential information or trade secret of the Company or any of its Subsidiaries or Affiliates without the consent of the Company; or -9- (c) any material violation of any of the provisions of the Company's Code of Business Conduct and Ethics ("Code of Conduct") or any agreement between the Participant and the Company; (d) making any other disclosure or taking any other action which is determined by the Committee to be materially detrimental to the business, prospects or reputation of the Company or any of its Subsidiaries or Affiliates; or (e) the Participant fails, in any material respect, to perform his or her assigned responsibilities as an employee of the Company or any of its Subsidiaries or Affiliates, as determined by the Committee, in its sole judgment, after consulting with the Chief Executive Officer. The ownership of less than 2% of the outstanding voting securities of a publicly traded corporation which competes with the Company or any of its Subsidiaries or Affiliates shall not constitute a Disqualifying Activity. (iv) CAUSE - means a felony conviction of a Participant or the failure of a Participant to contest prosecution for a felony, or a Participant's willful misconduct or dishonesty, any of which, in the judgment of the Committee, is harmful to the business or reputation of the Company or any Subsidiary or Affiliate; or any material violation of the Code of Conduct or any agreement between the Participant and the Company. (v) DISQUALIFICATION DATE - the earliest date as of which the Participant engaged in any Disqualifying Activity, as determined by the Committee. (vi) AWARD INSTALLMENT - if the Restricted Stock Award consists of multiple Awards, each with a separate Vesting Date and/or separate Expiration Date, any one of such Awards or, if the Restricted Stock Award consists of a single Award, with a single Vesting Date and a single Expiration Date, then the entire Award. (vii) VESTING DATE - the date on which any restrictions on a Restricted Stock Award terminate and such Award vests, whether by reason of lapse of time, the achievement of specified Performance Goals or both. (viii) SENIOR MANAGEMENT GROUP - means the Chief Executive Officer and other members of the executive management team, (i.e. the Chief Executive Officer's Direct Reporting Group) determined, with respect to any Participant, on the date of his or her retirement from the Company. -10- (14) Any Participant who is then eligible to participate in The Progressive Corporation Executive Deferred Compensation Plan or any other deferral plan hereafter adopted or maintained by the Company (a "Deferral Plan") may elect to defer all or any portion of any Restricted Stock Awards granted to him or her under this Plan, subject to and in accordance with the terms of the applicable Deferral Plan. SECTION 6. STOCK OPTIONS. (a) Grant. Subject to the terms and conditions of the Plan, Stock Options may be granted to Eligible Persons at any time and from time to time, as shall be determined by the Committee. The Committee shall determine the individuals to whom, and the time or times at which, grants of Stock Options will be made; the number of shares purchasable under each Stock Option; and the other terms and conditions of the Stock Options in addition to those set forth in Sections 6(b) and 6(c). Any Stock Option granted under the Plan shall be in such form as the Committee may from time to time approve. Stock Options granted under the Plan may be either of two types, which shall be indicated on their face: (i) Incentive Stock Options or (ii) Non-Qualified Stock Options. Subject to Section 6(c) hereof, the Committee shall have the authority to grant to any Participant Incentive Stock Options, Non-Qualified Stock Options or a combination thereof. (b) Terms and Conditions. Options granted under the Plan shall be evidenced by Option Award Agreements, shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem desirable: (1) Option Exercise Price. The Option Exercise Price per share of Stock purchasable under a Non-Qualified Stock Option shall be determined by the Committee at the time of grant and shall not be less than 100% of the Fair Market Value of the Stock on the date of grant. The Option Exercise Price per share of Stock purchasable under an Incentive Stock Option shall be determined by the Committee at the time of grant and shall be not less than 100% of the Fair Market Value of the Stock at the date of grant (or 110% of the Fair Market Value of the Stock at the date of grant in the case of a Participant who at the date of grant owns shares possessing more than ten percent of the total combined voting power of all classes of stock of the Company or its parent or subsidiary corporations (as determined under Section 424(d), (e) and (f) of the Code)(a "10% Participant")). (2) Option Term. The term of each Stock Option ("Option Term") shall be determined by the Committee at the time of grant and may not exceed ten years from the date the Option is granted (or, with respect to Incentive Stock Options, five years in the case of a 10% Participant). (3) Exercise. Stock Options shall be exercisable at such time or times and subject to such terms and conditions (which may include, without limitation, the achievement of one or more Performance Goals) as shall be determined by the Committee at or after grant; provided, however, that, except as provided in Section 7, unless otherwise determined by the Committee at or after grant, no Stock Option shall be exercisable prior -11- to six months and one day following the date of grant. If any Stock Option is exercisable only in installments or only after a specified vesting date, the Committee may accelerate or waive, in whole or in part, such installment exercise provisions or vesting date, at any time at or after grant based on such factors as the Committee shall determine, in its sole discretion. (4) Method of Exercise. Subject to whatever installment exercise provisions apply with respect to such Stock Option, and the six month and one day holding period set forth in Section 6(b)(3) and any other conditions to vesting, Stock Options may be exercised in whole or in part, at any time during the Option Term, by giving to the Company written notice of exercise specifying the number of shares of Stock to be purchased. Such notice shall be accompanied by payment in full of the Option Exercise Price of the shares of Stock for which the Option is exercised, in cash or by check or such other instrument as the Committee may accept. Subject to the following sentence, unless otherwise determined by the Committee, in its sole discretion, at or after grant, payment, in full or in part, of the Option Exercise Price of (i) Incentive Stock Options may be made in the form of unrestricted Stock then owned by the Participant and (ii) Non-Qualified Stock Options may be made in the form of unrestricted Stock then owned by the Participant or Stock that is part of the Non-Qualified Stock Option being exercised. Notwithstanding the foregoing, any election by a Section 16 Participant to satisfy such payment obligation, in whole or in part, with unrestricted Stock then owned by such Participant or Stock that is part of the Non-Qualified Stock Option being exercised shall be subject to prior approval by the Committee, in its sole discretion. The value of each such share surrendered or withheld shall be equal to the Fair Market Value of the Stock on the date the Option is exercised. No Stock shall be issued pursuant to an exercise of an Option until full payment has been made therefor. A Participant shall not have rights to dividends or any other rights of a shareholder with respect to any Stock subject to an Option unless and until the Participant has given written notice of exercise, has paid in full for such shares, has given, if requested, the representation described in Section 10(a) and such shares have been issued to the Participant. (5) Non-Transferability of Options. Except as provided in the following sentence, no Stock Option shall be transferable by the Participant other than by will or by the laws of descent and distribution, and all Stock Options shall be exercisable, during the Participant's lifetime, only by the Participant or, subject to Sections 6(b)(3) and 6(c), by the Participant's authorized legal representative if the Participant is unable to exercise an Option as a result of the Participant's Disability. Notwithstanding the foregoing, if determined by the Committee at the time of grant and so provided in the applicable Award Agreement, a Participant may transfer a Non-Qualified Stock Option during his or her lifetime to one or more of his or her Family Members, provided that no consideration is paid for the transfer and that the transfer would not result in the loss of any exemption under Rule 16b-3 of the Exchange Act with respect to any Stock Option. The transferee of a Stock Option will be subject to all restrictions, terms and conditions applicable to the Stock Option prior to its transfer, except that the Stock Option will not be further transferable by the transferee other than by will or by the laws of descent and distribution. -12- (6) Termination by Death. Subject to Section 6(c), if any Participant's employment by the Company or any Subsidiary or Affiliate terminates by reason of death, any Stock Option held by such Participant may thereafter be exercised, to the extent such Option was exercisable at the time of death or would have become exercisable within one year from the time of death had the Participant continued to fulfill all conditions of the Option during such period (or on such accelerated basis as the Committee may determine at or after grant), by the estate of the Participant (acting through its fiduciary) for a period of one year (or such other period as the Committee may specify at or after grant) from the date of such death; provided that, if the vesting of such Option is conditioned on or subject to the achievement of specified Performance Goals, such Performance Goals are achieved prior to the earlier of the expiration of such one year period or the Expiration Date of such Option. The balance of the Stock Option shall be forfeited. (7) Termination by Reason of Disability. Subject to Sections 6(b)(3) and 6(c), if a Participant's employment by the Company or any Subsidiary or Affiliate terminates by reason of Disability, any Stock Option held by such Participant may thereafter be exercised, to the extent such Option was exercisable at the time of termination or would have become exercisable within one year from the time of termination had the Participant continued to fulfill all conditions of the Option during such period (or on such accelerated basis as the Committee may determine at or after grant), by the Participant or by the Participant's duly authorized legal representative if the Participant is unable to exercise the Option as a result of the Participant's Disability, for a period of one year (or such other period as the Committee may specify at or after grant) from the date of such termination of employment; provided that, if the vesting of such Option is conditioned on or subject to the achievement of specified Performance Goals, such Performance Goals are achieved prior to the earlier of the expiration of such one year period or the Expiration Date of such Option; and provided, further, that if the Participant dies within such one-year period (or such other period as the Committee shall specify at or after grant), any unexercised Stock Option held by such Participant shall thereafter be exercisable by the estate of the Participant (acting through its fiduciary) to the same extent to which it was exercisable at the time of death for a period of one year from the date of such termination of employment. The balance of the Stock Option shall be forfeited. (8) Other Termination. Unless otherwise determined by the Committee at or after the time of granting any Stock Option, if a Participant's employment by the Company or any Subsidiary or Affiliate terminates for any reason other than death or Disability, all Stock Options held by such Participant shall thereupon immediately terminate, except that if the Participant is involuntarily terminated by the Company or any Subsidiary or Affiliate without Cause, any such Stock Option may be exercised, to the extent otherwise exercisable at the time of such termination, at any time during the lesser of two months from the date of such termination or the balance of such Stock Option's term. For purposes of this Section, "Cause" has the meaning set forth in Section 5(b)(13)(D)(iv). (c) Incentive Stock Options. Notwithstanding Section 4, only employees of the Company or a Subsidiary shall be eligible to receive Incentive Stock Options. Notwithstanding Sections 6(b)(6) and (7), an Incentive Stock Option shall be exercisable by (i) a Participant's authorized legal representative (if the Participant is unable to exercise the Incentive Stock Option as a result of the Participant's Disability) only if, and to the extent, permitted by Section 422 of the Code and Section 16 of the Exchange Act and the rules and regulations promulgated thereunder and (ii) by -13- the Participant's estate, in the case of death, or authorized legal representative, in the case of Disability, no later than 10 years from the date the Incentive Stock Option was granted (or 5 years in the case of a 10% Participant) (in addition to any other restrictions or limitations which may apply). Anything in the Plan to the contrary notwithstanding, no term or provision of the Plan relating to Incentive Stock Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify the Plan under Section 422 of the Code, or, without the consent of the Participant(s) affected, to disqualify any Incentive Stock Option under such Section 422 or any successor Section thereto. (d) Buyout Provisions. The Committee may at any time buy out, for a payment in cash, Stock or Restricted Stock, any Option previously granted, based on such terms and conditions as the Committee shall establish and agree upon with the Participant, provided that no such transaction involving a Section 16 Participant shall be structured or effected in a manner that would violate, or result in any liability on the part of the Participant under, Section 16 of the Exchange Act or the rules and regulations promulgated thereunder. SECTION 7. CHANGE IN CONTROL PROVISION. (a) Impact of Event. In the event of and upon: (1) a "Change in Control" as defined in Section 7(b) or (2) a "Potential Change in Control" as defined in Section 7(c), the following acceleration and valuation provisions shall apply: (1) Any Stock Options awarded under the Plan not previously exercisable and vested shall become fully exercisable and vested; (2) All restrictions, limitations and Performance Goals, if any, applicable to any Restricted Stock or Stock Options shall terminate and such Stock or Stock Options shall be deemed fully vested; and (3) The value of all outstanding Awards, in each case to the extent vested, shall, unless otherwise determined by the Committee in its sole discretion at or after grant but prior to any Change in Control or Potential Change in Control, be cashed out on the basis of the "Change in Control Price", as defined in Section 7(d), as of the date such Change in Control or such Potential Change in Control is determined to have occurred. (b) Definition of Change in Control. For purposes of Section 7(a), a "Change in Control" means the happening of any of the following: (1) When any "person" as defined in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d) and 14(d) thereof, including a "group" as defined in Section 13(d) of the Exchange Act, but excluding the Company and any Subsidiary and any employee benefit plan sponsored or maintained by the Company or any Subsidiary (including any trustee of such plan acting as trustee), directly or indirectly, becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act, as amended from time to time), of securities of the Company representing 20 percent or more of the combined voting power of the Company's then outstanding securities; provided, however, that the terms "person" and "group" shall not include any "Excluded Director", and the term "Excluded Director" means any director who, on the effective date of the Plan, is -14- the beneficial owner of or has the right to acquire an amount of Stock equal to or greater than five percent of the number of shares of Stock outstanding on such effective date; and further provided that, unless otherwise determined by the Board or any committee thereof, the terms "person" and "group" shall not include any entity or group of entities which has acquired Stock of the Company in the ordinary course of business for investment purposes only and not with the purpose or effect of changing or influencing the control of the Company, or in connection with or as a participant in any transaction having such purpose or effect, ("Investment Intent"), as demonstrated by the filing by such entity or group of a statement on Schedule 13G (including amendments thereto) pursuant to Regulation 13D under the Exchange Act, as long as such entity or group continues to hold such Stock with an Investment Intent; (2) When, during any period of 24 consecutive months during the existence of the Plan, the individuals who, at the beginning of such period, constitute the Board (the "Incumbent Directors") cease for any reason other than death to constitute at least a majority thereof; provided, however, that a director who was not a director at the beginning of such 24-month period shall be deemed to have satisfied such 24-month requirement (and be an Incumbent Director) if such director was elected by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually (because they were directors at the beginning of such 24-month period) or by prior operation of this Section 7(b)(2); or (3) The occurrence of a transaction requiring shareholder approval for the acquisition of the Company, or any portion of the outstanding equity securities or voting power of the Company, by an entity other than the Company or a Subsidiary through purchase of Stock or assets, by merger or otherwise; provided, however, a change in control shall not be deemed to be a Change in Control for purposes of the Plan if the Board approves such change prior to either (i) the commencement of any of the events described in Section 7(b)(l), (2), or (3) or 7(c)(l) or (ii) the commencement by any person other than the Company of a tender offer for Stock. (c) Definition of Potential Change in Control. For purposes of Section 7(a), a "Potential Change in Control" means the happening of any one of the following: (1) The approval by shareholders of an agreement by the Company, the consummation of which would result in a Change in Control of the Company as defined in Section 7(b); or (2) The acquisition of beneficial ownership, directly or indirectly, by any entity, person or group (other than the Company or a Subsidiary or any Company employee benefit plan (including any trustee of such plan acting as such trustee)) of securities of the Company representing five percent or more of the combined voting power of the Company's outstanding securities and the adoption by the Board of a resolution to the effect that a Potential Change in Control of the Company has occurred for purposes of this Plan. (d) Change in Control Price. For purposes of this Section 7, "Change in Control Price" means the highest price per share paid in any transaction reported on the New York Stock Exchange Composite Index, or paid or offered in any bona fide transaction related to a Change in -15- Control or Potential Change in Control of the Company, at any time during the 60-day period immediately preceding the occurrence of the Change in Control (or, where applicable, the occurrence of the Potential Change in Control event), in each case as determined by the Committee. SECTION 8. AMENDMENTS AND TERMINATION. The Board may at any time, in its sole discretion, amend, supplement, alter or discontinue the Plan, but no such amendment, alteration or discontinuation shall be made which would impair the rights of a Participant under an Award theretofore granted, without the Participant's consent. The Company shall submit to the shareholders of the Company for their approval any amendments to the Plan which are required to be approved by shareholder by law or the rules and regulations of any governmental authority or any stock exchange upon which the Stock is then traded. Subject to changes in law or other legal requirements that would permit otherwise, the Plan may not be amended without the approval of the shareholders, to (a) increase the total number of shares of Stock that may be issued under the Plan or to any Participant during any calendar year (except for adjustments pursuant to Section 3(c)), (b) permit the granting of Stock Options with Option Exercise Prices lower than those specified in Section 6(b)(1), (c) modify the Plan's eligibility requirements, or (d) change the Performance Goals specified in Section 1(c). Further, no Performance-Based Award may be amended if such amendment would adversely affect the Award's qualification as qualified performance-based compensation under Section 162(m) of the Code. The Committee may at any time, in its sole discretion, amend the terms of any outstanding Award, but no such amendment shall be made which would impair the rights of a Participant under an Award theretofore granted, without the Participant's consent; nor, in the case of any Award of a Stock Option, shall any such amendment reduce the Option Exercise Price relating to such Stock Option or, in any other case, reduce the purchase price (if any) of the Stock which is subject to an outstanding Award; nor shall any such amendment be made which would make the applicable exemptions provided by Rule 16b-3 under the Exchange Act unavailable to any Section 16 Participant holding an Award without the Participant's consent. Subject to the above provisions, the Board shall have all necessary authority to amend the Plan to take into account changes in applicable securities and tax laws and accounting rules, as well as other developments. SECTION 9. UNFUNDED STATUS OF PLAN. The Plan is intended to constitute an "unfunded" plan for incentive compensation. With respect to any payments not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company. SECTION 10. GENERAL PROVISIONS. (a) The Committee may require each Participant acquiring Stock pursuant to an Award under the Plan to represent to and agree with the Company in writing that the Participant is acquiring the Stock -16- without a view to distribution thereof. Any certificates for such shares may include any legend which the Committee deems appropriate to reflect any restrictions on transfer. All shares of Stock or other securities issued under the Plan shall be subject to such stop-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Stock is then listed, and any applicable federal or state securities laws, and the Committee may cause a legend or legends to be placed on any certificates for such shares to make appropriate reference to such restrictions or to cause such restrictions to be noted in the records of the Company's stock transfer agent and any applicable book entry system. (b) Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to shareholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases. (c) Neither the adoption of the Plan, nor its operation, nor any document describing, implementing or referring to the Plan, or any part thereof, shall confer upon any Participant under the Plan any right to continue in the employ, or as a director, of the Company or any Subsidiary or Affiliate, or shall in any way affect the right and power of the Company or any Subsidiary or Affiliate to terminate the employment, or service as a director, or change the job title, duties, authority, position or compensation of any Participant in the Plan at any time with or without assigning a reason therefor, to the same extent as the Company or any Subsidiary or Affiliate might have done if the Plan had not been adopted. (d) For purposes of this Plan, a transfer of a Participant between the Company and any of its Subsidiaries or Affiliates, or between such Subsidiaries or Affiliates, shall not be deemed a termination of employment or adversely affect or enlarge the rights of any Participant under this Plan or with respect to any Award. (e) No later than the date as of which an amount first becomes includable in the gross income of the Participant for federal income tax purposes with respect to any Award under the Plan, the Participant shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any federal, state or local taxes or other items of any kind required by law to be withheld with respect to such amount. Subject to the following sentence, unless otherwise determined by the Committee, withholding obligations may be settled with Stock, including unrestricted Stock previously owned by the Participant or Stock that is part of the Award that gives rise to the withholding requirement. Notwithstanding the foregoing, any election by a Section 16 Participant to settle such tax withholding obligation with Stock that is previously owned by the Participant or part of such Award shall be subject to prior approval by the Committee, in its sole discretion. The obligations of the Company under the Plan shall be conditional on such payment or arrangements and the Company and its Subsidiaries and Affiliates to the extent permitted by law shall have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant. (f) The actual or deemed reinvestment of dividends in additional Stock or Restricted Stock at the time of any dividend payment shall only be permissible if sufficient shares of Stock are available under Section 3 for such reinvestment (taking into account the then outstanding and previously granted Restricted Stock and Stock Options). -17- (g) The Plan, all Awards made and all actions taken thereunder and any agreements relating thereto, shall be governed by and construed in accordance with the laws of the State of Ohio. (h) In the event any Award is transferred or assigned pursuant to a court order, such transfer or assignment shall be without liability to the Company and the Company shall have the right to offset against such Award any expenses (including attorneys' fees) incurred by the Company in connection with such transfer or assignment. (i) All Award Agreements entered into with Participants pursuant to the Plan shall be subject to the Plan. A Participant who receives an Award under the Plan shall not have any rights with the respect to such Award, unless and until such Participant has executed an Award Agreement evidencing the Award, in the form approved by the Committee; has delivered a fully-executed copy of such Award Agreement to the Company; and has otherwise complied with the applicable terms and conditions of such Award. (j) The provisions of Awards need not be the same with respect to each Participant. SECTION 11. SHAREHOLDER APPROVAL; EFFECTIVE DATE OF PLAN. The Plan was adopted by the Board on January 31, 2003 and is subject to approval by the holders of the Company's outstanding Stock, in accordance with applicable law. The Plan will become effective on the date of such approval. SECTION 12. TERM OF PLAN. No Award shall be granted pursuant to the Plan on or after January 31, 2013, but Awards granted prior to such date may extend beyond that date. -18- EX-4.B 4 l00196aexv4wb.txt EX-4(B) RESTRICTED STOCK AWARD AGRMNT (TIME-BASED) Exhibit 4(b) THE PROGRESSIVE CORPORATION 2003 INCENTIVE PLAN RESTRICTED STOCK AWARD AGREEMENT (TIME-BASED AWARD) This Agreement ("Agreement") is made this by and between ("Participant") and The Progressive Corporation (the "Company"). 1. AWARD OF RESTRICTED STOCK. The Company hereby grants to Participant an award (the "Award") of restricted stock (the "Restricted Stock") consisting of <# of Shares> shares of the Company's Common Shares, $1 Par Value ("Common Shares"), pursuant and subject to The Progressive Corporation 2003 Incentive Plan (the "Plan"). 2. CONDITIONS TO PARTICIPANT'S RIGHTS UNDER THIS AGREEMENT. This Agreement shall not become effective, and Participant shall have no rights with respect to the Award or the Restricted Stock, unless and until both of the following have occurred to the Company's satisfaction: a. Participant has fully executed this Agreement and delivered it to the Company (in the Company's discretion, such execution and delivery may be accomplished through electronic means); and b. Participant has fully executed a stock power in the form attached as Appendix A and delivered it to the Company, including a "Medallion Guarantee" by a qualified bank, securities broker or other financial institution as further described on Appendix A. 3. RESTRICTIONS; VESTING. The Restricted Stock shall be subject to the restrictions and other terms and conditions set forth in the Plan, which are hereby incorporated herein by reference, and in this Agreement. Subject to the terms and conditions of the Plan and this Agreement, Participant's rights in and to the shares of Restricted Stock shall vest according to the following schedule: a. One-third of the shares of Restricted Stock shall vest on . b. One-third of the shares of Restricted Stock shall vest on . c. The final one-third of the shares of Restricted Stock shall vest on . The shares of Restricted Stock awarded under this Agreement shall vest in accordance with the schedule set forth above unless, prior to the vesting date set forth above, the Award and the applicable shares of Restricted Stock are forfeited or become subject to accelerated vesting under the terms and conditions of the Plan. Until shares of Restricted Stock vest, Participant shall not sell, transfer, pledge, assign or otherwise encumber such shares of Restricted Stock. 4. MANNER IN WHICH SHARES WILL BE HELD. Stock certificates evidencing the shares of Restricted Stock awarded under this Agreement shall be registered in the name of Participant and shall be delivered to and held in custody by the Company, or its designee, until the restrictions thereon shall have lapsed or any conditions to the vesting of such Award, or a portion thereof, have been satisfied. Such certificates shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Award. In the discretion of the Company, any or all shares of Restricted Stock awarded to Participant hereunder may be issued in, or after issuance may be transferred to, book-entry form and held by the -1- Company in such form. In such event, no stock certificates evidencing such shares will be held, the applicable restrictions will be noted in the records of the Company's transfer agent and in the book entry system, and upon vesting, Participant may request that the Company issue a stock certificate for the applicable number of Common Shares. 5. RIGHTS OF SHAREHOLDER. Except as otherwise provided in this Agreement or the Plan, Participant shall have, with respect to the shares of Restricted Stock awarded hereunder, all of the rights of a shareholder of the Company, including the right to vote the shares and the right to receive any dividends as declared by the Company's Board of Directors. 6. SHARES NON-TRANSFERABLE. No shares of Restricted Stock shall be transferable by Participant other than by will or by the laws of descent and distribution. In the event any Award is transferred or assigned pursuant to a court order, such transfer or assignment shall be without liability to the Company, and the Company shall have the right to offset against such Award any expenses (including attorneys' fees) incurred by the Company in connection with such transfer or assignment. 7. EXECUTIVE DEFERRED COMPENSATION PLAN. If Participant is eligible, and has made the appropriate election, to defer the Restricted Stock awarded hereunder into The Progressive Corporation Executive Deferred Compensation Plan (the "Deferral Plan"), upon vesting, the shares of Restricted Stock awarded hereunder shall be considered to be deferred pursuant to the Deferral Plan, subject to and in accordance with the terms and conditions of the Deferral Plan and any deferral agreement entered into by Participant thereunder. 8. TERMINATION OF EMPLOYMENT. Except as otherwise provided in the Plan or as determined by the Compensation Committee of the Company's Board of Directors, if Participant's employment with the Company is terminated for any reason other than death, Disability or Qualified Retirement, all Restricted Stock held by Participant which is unvested or subject to restriction at the time of such termination shall be automatically forfeited. 9. TAXES. No later than the date as of which an amount first becomes includable in the gross income of Participant for federal income tax purposes with respect to shares of Restricted Stock awarded under this Agreement, Participant shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, all federal, state or local taxes or other items of any kind required by law to be withheld with respect to such amount. Participant may satisfy any applicable tax withholding obligation resulting from the vesting of shares of Restricted Stock awarded hereunder by surrendering to Company any other unrestricted Common Shares of the Company then owned by Participant or Common Shares which are part of the Award. The obligations of the Company under the Plan shall be conditional on such payment or arrangements and the Company and its Subsidiaries and Affiliates to the extent permitted by law shall have the right to deduct any such taxes from any payment of any kind otherwise due to Participant. 10. ENTIRE AGREEMENT: This Agreement constitutes the entire agreement between the parties and supersedes and cancels any other agreement, representation or communication, whether oral or in writing, between the parties hereto relating to subject matter hereof, provided that the Agreement shall be at all times subject to the Plan as provided above. 11. AMENDMENT. The Committee, in its sole discretion, may hereafter amend the terms of this Award, but no such amendment shall be made which would impair the rights of Participant, without Participant's consent. -2- 12. DEFINITIONS: Unless otherwise defined in this Agreement, each capitalized term in this Agreement shall have the meaning given to it in the Plan. Participant hereby: (i) acknowledges receiving a copy of the Plan Description relating to the Plan, and represents that he or she is familiar with all of the material provisions of the Plan, as set forth in such Plan Description; (ii) accepts this Agreement and the Restricted Stock awarded pursuant hereto subject to all provisions of the Plan and this Agreement; and (iii) agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee relating to the Plan, this Agreement or the Restricted Stock awarded hereunder. -3- APPENDIX A --- IRREVOCABLE STOCK POWER For Value Received, the undersigned does hereby assign and transfer to --------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ______________ shares of Common Shares, $1.00 par value per share, of The Progressive Corporation ("Company") represented by certificate(s) no(s). ------------------------------------------------------------------------ , - -------------------------------------------------------------------------------- inclusive, standing in the name of the undersigned on the books of the Company. The undersigned does hereby irrevocably constitute and appoint ----------------- - -------------------------------------------------------------------------------- Attorney to transfer the said stock on the books of the Company, with full power of substitution in the premises. - ------------------------------ Printed Name - ------------------------------ Signature Date: ------------------------- IMPORTANT: The signature of the assignor (Participant) must be guaranteed by an eligible guarantor institution (bank, stock broker, savings and loan association, or credit union) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15. ------------------------------- Name of Guarantor Institution ------------------------------- Signature Medallion Guaranteed -4- EX-4.C 5 l00196aexv4wc.txt EX-4(C) RESTRICTD STCK AWARD AGRMNT (PERFORMANCE) Exhibit 4(c) THE PROGRESSIVE CORPORATION 2003 INCENTIVE PLAN RESTRICTED STOCK AWARD AGREEMENT (PERFORMANCE-BASED AWARD) This Agreement ("Agreement") is made this by and between ("Participant") and The Progressive Corporation (the "Company"). 1. AWARD OF RESTRICTED STOCK. The Company hereby grants to Participant an award (the "Award") of restricted stock (the "Restricted Stock") consisting of <# of Shares> shares of the Company's Common Shares, $1 Par Value ("Common Shares"), pursuant and subject to The Progressive Corporation 2003 Incentive Plan (the "Plan"). 2. CONDITIONS TO PARTICIPANT'S RIGHTS UNDER THIS AGREEMENT. This Agreement shall not become effective, and Participant shall have no rights with respect to the Award or the Restricted Stock, unless and until both of the following have occurred to the Company's satisfaction: a. Participant has fully executed this Agreement and delivered it to the Company (in the Company's discretion, such execution and delivery may be accomplished through electronic means); and b. Participant has fully executed a stock power in the form attached as Appendix A and delivered it to the Company, including a "Medallion Guarantee" by a qualified bank, securities broker or other financial institution as further described on Appendix A. 3. RESTRICTIONS; VESTING. The Restricted Stock shall be subject to the restrictions and other terms and conditions set forth in the Plan, which are hereby incorporated herein by reference, and in this Agreement. Subject to the terms and conditions of the Plan and this Agreement, Participant's rights in and to the shares of Restricted Stock shall vest on . The shares of Restricted Stock awarded under this Agreement shall vest in accordance with the foregoing unless, prior thereto, the Award and the applicable shares of Restricted Stock are forfeited or become subject to accelerated vesting under the terms and conditions of the Plan. Until shares of Restricted Stock vest, Participant shall not sell, transfer, pledge, assign or otherwise encumber such shares of Restricted Stock. 4. EXPIRATION OF AWARD. Notwithstanding anything to the contrary in this Agreement, if Participant's rights in and to the shares of Restricted Stock granted hereunder have not vested in accordance with Section 3 of this Agreement on or before December 31, 2012, this Award shall expire. Upon such expiration, the Common Shares issued pursuant to this Agreement shall automatically be forfeited, and Participant shall have no further rights with respect thereto. 5. MANNER IN WHICH SHARES WILL BE HELD. Stock certificates evidencing the shares of Restricted Stock awarded under this Agreement shall be registered in name of Participant and shall be -1- registered in the name of Participant and shall be delivered to and held in custody by the Company, or its designee, until the restrictions thereon shall have lapsed or any conditions to the vesting of such Award have been satisfied. Such certificates shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Award. In the discretion of the Company, any or all shares of Restricted Stock awarded to Participant hereunder may be issued in, or after issuance may be transferred to, book-entry form and held by the Company in such form. In such event, no stock certificates evidencing such shares will be held, the applicable restrictions will be noted in the records of the Company's transfer agent and in the book entry system, and upon vesting, Participant may request that the Company issue a stock certificate for the applicable number of Common Shares. 6. RIGHTS OF SHAREHOLDER. Except as otherwise provided in this Agreement or the Plan, Participant shall have, with respect to the shares of Restricted Stock awarded hereunder, all of the rights of a shareholder of the Company, including the right to vote the shares and the right to receive any dividends as declared by the Company's Board of Directors. 7. SHARES NON-TRANSFERABLE. No shares of Restricted Stock shall be transferable by Participant other than by will or by the laws of descent and distribution. In the event any Award is transferred or assigned pursuant to a court order, such transfer or assignment shall be without liability to the Company, and the Company shall have the right to offset against such Award any expenses (including attorneys' fees) incurred by the Company in connection with such transfer or assignment. 8. EXECUTIVE DEFERRED COMPENSATION PLAN. If Participant is eligible, and has made the appropriate election, to defer the Restricted Stock awarded hereunder into The Progressive Corporation Executive Deferred Compensation Plan (the "Deferral Plan"), upon vesting, the shares of Restricted Stock awarded hereunder shall be considered to be deferred pursuant to the Deferral Plan, subject to and in accordance with the terms and conditions of the Deferral Plan and any deferral agreement entered into by Participant thereunder. 9. TERMINATION OF EMPLOYMENT. Except as otherwise provided in the Plan or as determined by the Compensation Committee of the Company's Board of Directors, if Participant's employment with the Company is terminated for any reason other than death, Disability or Qualified Retirement, all Restricted Stock held by Participant which is unvested or subject to restriction at the time of such termination shall be automatically forfeited. 10. TAXES. No later than the date as of which an amount first becomes includable in the gross income of Participant for federal income tax purposes with respect to shares of Restricted Stock awarded under this Agreement, Participant shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, all federal, state or local taxes or other items of any kind required by law to be withheld with respect to such amount. Participant may satisfy any applicable tax withholding obligation resulting from the vesting of shares of Restricted Stock awarded hereunder by surrendering to Company any other unrestricted Common Shares of the Company then owned by Participant or Common Shares which are part of the Award. The obligations of the Company under the Plan shall be conditional on such payment or arrangements and the Company and its Subsidiaries and Affiliates to the extent permitted by law shall have the right to deduct any such taxes from any payment of any kind otherwise due to Participant. 11. ENTIRE AGREEMENT: This Agreement constitutes the entire agreement between the parties and supersedes and cancels any other agreement, representation or communication, whether oral or in writing, between the parties hereto relating to subject matter hereof, provided that the Agreement shall be at all times subject to the Plan as provided above. -2- 12. AMENDMENT. The Committee, in its sole discretion, may hereafter amend the terms of this Award, but no such amendment shall be made which would impair the rights of Participant, without Participant's consent. 13. DEFINITIONS: Unless otherwise defined in this Agreement, each capitalized term in this Agreement shall have the meaning given to it in the Plan. Participant hereby: (i) acknowledges receiving a copy of the Plan Description relating to the Plan, and represents that he or she is familiar with all of the material provisions of the Plan, as set forth in such Plan Description; (ii) accepts this Agreement and the Restricted Stock awarded pursuant hereto subject to all provisions of the Plan and this Agreement; and (iii) agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee relating to the Plan, this Agreement or the Restricted Stock awarded hereunder. -3- APPENDIX A --- IRREVOCABLE STOCK POWER For Value Received, the undersigned does hereby assign and transfer to --------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- _____________ shares of Common Shares, $1.00 par value per share, of The Progressive Corporation ("Company") represented by certificate(s) no(s). ----------------------------------------------------------------------- , - -------------------------------------------------------------------------------- inclusive, standing in the name of the undersigned on the books of the Company. The undersigned does hereby irrevocably constitute and appoint ----------------- - -------------------------------------------------------------------------------- Attorney to transfer the said stock on the books of the Company, with full power of substitution in the premises. - ------------------------------ Printed Name - ------------------------------ Signature Date: _________________________ IMPORTANT: The signature of the assignor (Participant) must be guaranteed by an eligible guarantor institution (bank, stock broker, savings and loan association, or credit union) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15. ------------------------------- Name of Guarantor Institution ------------------------------- Signature Medallion Guaranteed -4- EX-4.D 6 l00196aexv4wd.txt EX-4(D) AMENDED ARTICLES OF INCORPORATION EXHIBIT 4(d) Amended Articles of Incorporation, as amended, of the Registrant CERTIFICATE OF AMENDED ARTICLES OF INCORPORATION OF THE PROGRESSIVE CORPORATION PETER B. LEWIS, Chairman of the Board, and DAVID M. SCHNEIDER, Secretary, of The Progressive Corporation, an Ohio corporation (the "Corporation"), with its principal office at Mayfield Village, Cuyahoga County, Ohio, do hereby certify that on April 20, 1984, in order to consolidate the Corporation's existing Articles of Incorporation and all previously adopted amendments thereto that were in force at that time, the directors of the Corporation, at a meeting duly called and held, duly adopted, pursuant to the authority of Ohio Code Section 1701.72(B), the Amended Articles of Incorporation attached hereto as Exhibit I, to supersede and take the place of the existing Articles of Incorporation and all amendments thereto. A true and correct copy of the resolution as adopted by the directors of the Corporation is attached hereto as Exhibit II. IN WITNESS WHEREOF, said PETER B. LEWIS, Chairman of the Board, and DAVID M. SCHNEIDER, Secretary, of The Progressive Corporation, acting for and in behalf of said Corporation, have hereunto subscribed their names this 20th day of April, 1984. /s/ Peter B. Lewis -------------------------------------- Peter B. Lewis, Chairman of the Board /s/ David M. Schneider -------------------------------------- David M. Schneider, Secretary -1- EXHIBIT I AMENDED ARTICLES OF INCORPORATION OF THE PROGRESSIVE CORPORATION FIRST: The name of said corporation shall be THE PROGRESSIVE CORPORATION. SECOND: The place in the State of Ohio where its principal office is to be located is Mayfield Village, Cuyahoga County. THIRD: The purpose of the corporation is to engage in any lawful act or activity for which corporations may be formed under Sections 1701.01 to 1701.98, inclusive, of the Ohio Revised Code. FOURTH: SECTION 1. AUTHORIZED SHARES. The aggregate number of shares which the corporation shall have authority to issue is 22,000,000 shares, consisting of 2,000,000 Non-Voting Preferred Shares, without par value, and 20,000,000 Common Shares, $1.00 par value. SECTION 2. ISSUANCE OF PREFERRED SHARES. The Board of Directors is authorized at any time, and from time to time, to provide for the issuance of Non-Voting Preferred Shares in one or more series, and to determine the designations, preferences, limitations and relative or other rights of the Non-Voting Preferred Shares or any series thereof. For each series, the Board of Directors shall determine, by resolution or resolutions adopted prior to the issuance of any shares thereof, the designations, preferences, limitations and relative or other rights thereof, including but not limited to the following relative rights and preferences, as to which there may be variations among different series: A. the division of such shares into series and the designation and authorized number of shares of each series, B. the dividend rate, C. the dates of payment of dividends and the dates from which they are cumulative, D. liquidation price, E. redemption rights and price, F. sinking fund requirements, G. conversion rights, and H. restrictions on the issuance of such shares. Prior to the issuance of any shares of a series, but after adoption by the Board of Directors of the resolution establishing such series, the appropriate officers of the corporation shall file such documents with the State of Ohio as may be required by law including, without limitation, an amendment to these Articles of Incorporation. SECTION 3. COMMON SHARES. Each Common Share shall entitle the holder thereof to one vote, in person or by proxy, at any and all meetings of the shareholders of the corporation, on all meetings of the shareholders of the corporation, on all propositions before such meetings. Each Common Share shall be entitled to participate equally in such dividends as may be declared by the Board of Directors out of funds legally available therefor, and to participate equally in all distributions of assets upon liquidation. -2- FIFTH: No holder of shares of the corporation of any class shall be entitled as such, as a matter of right, to subscribe for or purchase shares of any class, now or hereafter authorized, or to subscribe for or purchase securities convertible into or exchangeable for shares of the corporation or to which shall be attached or appertain any warrants or rights entitling the holder thereof to subscribe for or purchase shares, except such rights of subscription or purchase, if any, for such considerations and upon such terms and conditions as its Board of Directors from time to time may determine. SIXTH: Except as otherwise provided in these Articles of Incorporation or the Code of Regulations of the corporation, notwithstanding any provisions in Sections 1701.01 to 1701.98, inclusive, of the Ohio Revised Code, now or hereafter in effect, requiring for any purpose the vote, consent, waiver or release of the holders of a designated proportion (but less than all) of the share of the corporation or any of particular class or classes of shares, as the case may be, the vote, consent, waiver or release of the holders of shares entitling them to exercise a majority of the voting power of the shares of the corporation or of any class or classes of shares, as the case may be, shall be required and sufficient for any such purpose, except that the affirmative vote of the holders of record of 75 percent of the shares having voting power with respect to any such proposal shall be required to amend, alter, change or repeal Article NINTH of these Articles or the provisions of this Article SIXTH dealing with the amendment, alteration, change or repeal of Article NINTH. SEVENTH: To the extent permitted by law, the corporation, by action of its Board of Directors, may purchase or otherwise acquire shares of any class issued by it at such times, for such considerations and upon such terms and conditions as its Board of Directors may determine. EIGHTH: These Amended Articles of Incorporation shall supersede and take the place of the heretofore existing Articles of Incorporation of the corporation and all amendments thereto. NINTH: The affirmative vote of the holders of record of 75 percent of the shares having voting power with respect to any such proposal AND the affirmative vote of a majority of such holders of record other than shares held or beneficially owned by a "Related Person" (as hereinafter defined) shall be required for the approval or authorization of any "Business Combination" (as hereinafter defined) of the corporation with any Related Person; provided, however, that the 75 percent voting requirement and the majority voting requirement of holders of record of shares other than a Related Person shall not be applicable if: 1. A majority of the "Continuing Directors" of the Corporation (as hereinafter defined) have approved the Business Combination; or 2. The Business Combination is a merger or consolidation and the cash or fair market value of the property, securities or other consideration to be received per share by holders of Common Shares of the corporation in the Business Combination is not less than the highest per share price (with appropriate adjustments for recapitalization and for share splits, share dividends and like distributions), paid by the Related Person in acquiring any of its holdings of the corporation's Common Shares. For the purposes of this Article NINTH: (a) The term "Business Combination" shall mean (i) any merger or consolidation of the corporation or a subsidiary with or into a Related Person, (ii) any sale, lease, exchange, transfer or other disposition, including without limitation, a mortgage or any other security device, of all or any "Substantial Part" (as hereinafter defined) of the assets either of the corporation (including without limitation any voting securities of a subsidiary) or of a subsidiary, to a Related Person, (iii) any merger or consolidation of a Related Person with or into the -3- corporation or a subsidiary of the corporation, (iv) any sale, lease, exchange, transfer or other disposition of all or any Substantial Part of the assets of a Related Person to the corporation or a subsidiary of the corporation, (v) the issuance of any securities of the corporation or a subsidiary of the corporation to a Related Person, (vi) any recapitalization that would have the effect of increasing the voting power of a Related Person, and (vii) any agreement, contract or other arrangement providing for any of the transactions described in this definition of Business Combination. (b) The term "Related Person" shall mean and include any individual, corporation, partnership or other person or entity which, together with its "Affiliates" and "Associates" (as defined on September 1, 1982 at Rule 12b-2 under the Securities Exchange Act of 1934), "Beneficially Owns" (as defined on September 1, 1982 at Rule 13d-3 under the Securities Exchange Act of 1934) in the aggregate 20 percent or more of the outstanding Common Shares of the corporation, and any Affiliate or Associate of any such individual, corporation, partnership or other person or entity. (c) The term "Substantial Part" shall mean more than 30 percent of the fair market value of the total assets of the corporation in question, as of the end of its most recent fiscal year ending prior to the time the determination is being made. (d) Without limitation, any Common Shares of the corporation that any Related Person has the right to acquire pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise, shall be deemed beneficially owned by the Related Person. (e) For the purposes of sub-paragraph (2) of this Article NINTH, the term "other consideration to be received" shall include, without limitation, Common Shares of the corporation retained by its existing public shareholders in the event of a Business Combination in which the corporation is the surviving corporation. (f) The term "Continuing Director" shall mean a director who was a member of the Board of Directors of the corporation immediately prior to the time that the Related Person involved in a Business Combination became a Related Person. -4- EXHIBIT II THE PROGRESSIVE CORPORATION DIRECTORS RESOLUTION RESOLVED, that to consolidate the Company's existing Articles of Incorporation and all previously adopted amendments thereto, the Amended Articles of Incorporation presented to this meeting are hereby adopted to supersede and take the place of the existing Articles and all amendments thereto. -5- CERTIFICATE OF AMENDMENT TO THE AMENDED ARTICLES OF INCORPORATION OF THE PROGRESSIVE CORPORATION PETER B. LEWIS, Chairman of the Board, and DAVID M. SCHNEIDER, Secretary, of The Progressive Corporation, an Ohio corporation for profit with its principal office at Mayfield Village, Cuyahoga County, Ohio (the "Company"),do hereby certify that a meeting of the shareholders of the Company was duly called and held on April 25, 1986, at which meeting a quorum of the shareholders was present in person or by proxy, and by the affirmative vote of the holders of shares entitling them to exercise a majority of the voting power of the Company on proposals to amend the Company's Amended Articles of Incorporation, the following resolution was adopted: RESOLVED, that Article FOURTH of the Company's Amended Articles of Incorporation be, and the same hereby is, amended to be and read in its entirety as follows: FOURTH: SECTION 1. AUTHORIZED SHARES. The aggregate number of shares which the corporation shall have authority to issue is 52,000,000 shares, consisting of 2,000,000 Non-Voting Preferred Shares, without par value, and 50,000,000 Common Shares, $1.00 par value. SECTION 2. ISSUANCE OF PREFERRED SHARES. The Board of Directors is authorized at any time, and from time to time, to provide for the issuance of Non-Voting Preferred Shares in one or more series, and to determine the designations, preferences, limitations and relative or other rights of the Non-Voting Preferred Shares or any series thereof. For each series, the Board of Directors shall determine, by resolution or resolutions adopted prior to the issuance of any shares thereof, the designations, preferences, limitations and relative or other rights thereof, including but not limited to the following relative rights and preferences, as to which there may be variations among different series: A. the division of such shares into series and the designation and authorized number of shares of each series, B. the dividend rate, C. the dates of payment of dividends and the dates from which they are cumulative, D. liquidation price, E. redemption rights and price, F. sinking fund requirements, G. conversion rights, and H. restrictions on the issuance of such shares. Prior to the issuance of any shares of a series, but after adoption by the Board of Directors of the -6- resolution establishing such series, the appropriate officers of the corporation shall file such documents with the State of Ohio as may be required by law including, without limitation, an amendment to these Amended Articles of Incorporation. SECTION 3. COMMON SHARES. Each Common Share shall entitle the holder hereof to one vote, in person or by proxy, at any and all meetings of the shareholders of the corporation, on all propositions before such meetings. Each Common Share shall be entitled to participate equally in such dividends as may be declared by the Board of Directors out of funds legally available therefor, and to participate equally in all distributions of assets upon liquidation. IN WITNESS WHEREOF, said PETER B. LEWIS, Chairman of the Board, and DAVID M. SCHNEIDER, Secretary, of The Progressive Corporation, acting for and in behalf of said corporation, have hereunto subscribed their names this 25th day of April, 1986. /s/ Peter B. Lewis -------------------------------- Peter B. Lewis, Chairman /s/ David M. Schneider -------------------------------- David M. Schneider, Secretary -7- CERTIFICATE OF AMENDMENT TO THE AMENDED ARTICLES OF INCORPORATION OF THE PROGRESSIVE CORPORATION PETER B. LEWIS, Chairman of the Board, and DAVID M. SCHNEIDER, Secretary, of The Progressive Corporation, an Ohio corporation for profit with its principal office at 6300 Wilson Mills Road, Mayfield Village, Cuyahoga County, Ohio (the "Company"), do hereby certify that a meeting of the shareholders of the Company was duly called and held on April 24, 1987, at which meeting a quorum of the shareholders was present in person or by proxy, and by the affirmative vote of the holders of shares entitling them to exercise a majority of the voting power of the Company on proposals to amend the Company's Amended Articles of incorporation, the following resolution was adopted: RESOLVED, that Article FOURTH of the Company's Amended Articles of Incorporation be, and the same hereby is, amended to be and read in its entirety as follows: FOURTH: SECTION 1. AUTHORIZED SHARES. The aggregate number of shares which the corporation shall have authority to issue is 110,000,000 shares, consisting of 10,000,000 Non-Voting Preferred Shares, without par value, and 100,000,000 Common Shares, $1.00 par value. SECTION 2. ISSUANCE OF PREFERRED SHARES. The Board of Directors is authorized at any time, and from time to time, to provide for the issuance of Non-Voting Preferred Shares in one or more series, and to determine the designations, preferences, limitations and relative or other rights of the Non-Voting Preferred Shares or any series thereof. For each series, the Board of Directors shall determine, by resolution or resolutions adopted prior to the issuance of any shares thereof, the designations, preferences, limitations and relative or other rights thereof, including but not limited to the following relative rights and preferences, as to which there may be variations among different series: A. the division of such shares into series and the designation and authorized number of shares of each series, B. the dividend rate, C. the dates of payment of dividends and the dates from which they are cumulative, D. liquidation price, E. redemption rights and price, F. sinking fund requirements, G. conversion rights, and H. restrictions on the issuance of such shares. -8- Prior to the issuance of any shares of a series, but after adoption by the Board of Directors of the resolution establishing such series, the appropriate officers of the corporation shall file such documents with the State of Ohio as may be required by law including, without limitation, an amendment to these Amended Articles of Incorporation. SECTION 3. COMMON SHARES. Each Common Share shall entitle the holder thereof to one vote, in person or by proxy, at any and all meetings of the shareholders of the corporation, on all propositions before such meetings. Each Common Share shall be entitled to participate equally in such dividends as may be declared by the Board of Directors out of funds legally available therefor, and to participate equally in all distributions of assets upon liquidation. IN WITNESS WHEREOF, said PETER B. LEWIS, Chairman of the Board, and DAVID M. SCHNEIDER, Secretary, of The Progressive Corporation, acting for and in behalf of said corporation, have hereunto subscribed their names this 24th day of April, 1987. /s/ Peter B. Lewis -------------------------------- Peter B. Lewis, Chairman /s/ David M. Schneider -------------------------------- David M. Schneider, Secretary -9- CERTIFICATE OF AMENDMENT TO AMENDED ARTICLES OF INCORPORATION OF THE PROGRESSIVE CORPORATION PETER B. LEWIS, President, and DAVID M. SCHNEIDER, Secretary, of The Progressive Corporation, an Ohio corporation for profit with its principal office at Mayfield Village, Cuyahoga County, Ohio (the "Company"), do hereby certify that a meeting of the Shareholders of the Company was duly called and held on April 19, 1991, at which meeting a quorum of the shareholders was present in person or by proxy, and by the affirmative vote of the holders of shares entitling them to exercise a majority of the voting power of the Company on a proposal to amend the Company's Amended Articles of Incorporation, the following resolution was adopted: RESOLVED, that Article Fourth of the Company's Amended Articles of Incorporation be, and the same hereby is, deleted in its entirety and there is substituted therefor the following: Article Fourth. The authorized number of shares of the corporation is 125,000,000, consisting of 20,000,000 Serial Preferred Shares, without par value (hereinafter called "Serial Preferred Shares"), 5,000,000 Voting Preference Shares, without par value (hereinafter called "Voting Preference Shares"), and 100,000,000 Common Shares, $1.00 par value (hereinafter called "Common Shares"). DIVISION A The Serial Preferred Shares shall have the following express terms: Section 1. Series. The Serial Preferred Shares may be issued from time to time in one or more series. All shares of Serial Preferred Shares shall be of equal rank and shall be identical, except in respect of the matters that may be fixed by the Board of Directors as hereinafter provided, and each share of a series shall be identical with all other shares of such series, except as to the dates from which dividends shall accrue and be cumulative. All Serial Preferred Shares shall rank on a parity with and be identical to all Voting Preference Shares except in respect of (i) the matters that may be fixed by the Board of Directors as provided in clauses (a) through (i), both inclusive, of this Section and (ii) the voting rights and provisions for consents relating to Serial Preferred Shares as fixed and determined by Section 5 of this Division. Subject to the provisions of Sections 2 through 7, both inclusive, of this Division, which provisions shall apply to all Serial Preferred Shares, the Board of Directors hereby is authorized to cause such shares to be issued in one or more series and with respect to each such series to determine and fix prior to the thereof (and thereafter, to the extent provided in clause (b) of this Section) the following: (a) The designation of the series, which may be by distinguishing number, letter or title; (b) The authorized number of shares of the series, which number the Board of Directors may (except where otherwise provided in the creation of the series) increase or decrease from time to time before or after the issuance thereof (but not below the number of shares thereof then outstanding); (c) The dividend rate or rates of the series; (d) The dates on which and the period or periods for which dividends, if declared, shall be payable and the date or dates from which dividends shall accrue and be cumulative; -10- (e) The redemption rights and price or prices, if any, for shares of the series; (f) The terms and amount of the sinking fund, if any, for the purchase or redemption of shares of the series; (g) The amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation; (h) Whether the shares of the series shall be convertible into Common Shares or shares of any other class and, if so, the conversion rate or rates or price or prices, any adjustments thereof and all other terms and conditions upon which such conversion may be made; and (i) Restrictions (in addition to those set forth in Subsection 5(c) of this Division) on the issuance of shares of the same series or of any other class or series. The Board of Directors is authorized to adopt from time to time amendments to the Amended Articles of Incorporation fixing, with respect to each such series, the matters described in clauses (a) through (i), both inclusive, of this Section and is authorized to take such actions with respect thereto as may be required by law in order to effect such amendments. Section 2. Dividends. (a) The holders of Serial Preferred Shares of each series, in preference to the holders of Common Shares and of any other class of shares ranking junior to the Serial Preferred Shares, shall be entitled to receive out of any funds legally available for Serial Preferred Shares and Voting Preference Shares and when and as declared by the Board of Directors, dividends in cash at the rate or rates for such series fixed in accordance with the provisions of Section 1 of this Division and no more, payable on the dates fixed for such series. Such dividends shall accrue and be cumulative, in the case of shares of each particular series, from and after the date or dates fixed with respect to such series. No dividends shall be paid upon or declared or set apart for any series of the Serial Preferred Shares for any dividend period unless at the same time. (1) a like proportionate dividend for the dividend periods terminating on the same or any earlier date, ratably in proportion to the respective dividend rates fixed therefor, shall have been paid upon or declared or set apart for all Serial Preferred Shares of all series then issued and outstanding and entitled to receive such dividend and (2) the dividends payable for the dividend periods terminating on the same or any earlier date, ratably in proportion to the respective dividend rates fixed therefor, shall have been paid upon or declared or set apart for all Voting Preference Shares of all series then issued and outstanding and entitled to receive such dividend. (b) So long as any Serial Preferred Shares shall be outstanding no dividend, except a dividend payable in Common Shares or other shares ranking junior to the Serial Preferred Shares, shall be paid or declared or any distribution be made, except as aforesaid, in respect of the Common Shares or any other shares ranking junior to the Serial Preferred Shares, nor shall any Common Shares or any other shares ranking junior to the Serial Preferred Shares be purchased, retired or otherwise acquired by the corporation, except out of the proceeds of the sale of Common Shares or other shares of the corporation ranking junior to the Serial Preferred Shares received by the corporation subsequent to the date of first issuance of Serial Preferred Shares of any series, unless: -11- (1) All accrued and unpaid dividends on Serial Preferred Shares, including the full dividends for all current dividend periods, shall have been declared and paid or a sum sufficient for payment thereof set apart; and (2) There shall be no arrearages with respect to the redemption of Serial Preferred Shares of any series from any sinking fund provided for shares of such series in accordance with the provisions of Section 1 of this Division. Section 3. Redemption. (a) Subject to the express terms of each series and to the provisions of Subsection 5(c)(3) of this Division, the corporation: (1) May, from time to time at the option of the Board of Directors, redeem all or any part of any redeemable series of Serial Preferred Shares at the time outstanding at the applicable redemption price for such series fixed in accordance with the provisions of Section 1 of this Division; and (2) Shall, from time to time, make such redemptions of each series of Serial Preferred Shares as may be required to fulfill the requirements of any sinking fund provided for shares of such series at the applicable sinking fund redemption price fixed in accordance with the provisions of Section 1 of this Division; and shall in each case pay all accrued and unpaid dividends to the redemption date. (b) (1) Notice of every such redemption shall be mailed, postage prepaid, to the holders of record of the Serial Preferred Shares to be redeemed at their respective addresses then appearing on the books of the corporation, not less than 30 days nor more than 60 days prior to the date fixed for such redemption, or such other time prior thereto as the Board of Directors shall fix for any series pursuant to Section 1 of this Division prior to the issuance thereof. At any time after notice as provided above has been deposited in the mail, the corporation may deposit the aggregate redemption price of Serial Preferred Shares to be redeemed, together with accrued and unpaid dividends thereon to the redemption date, with any bank or trust company in Cleveland, Ohio or New York, New York, having capital and surplus of not less than $100,000,000, named in such notice and direct that there be paid to the respective holders of the Serial Preferred Shares so to be redeemed amounts equal to the redemption price of the Serial Preferred Shares so to be redeemed, together with such accrued and unpaid dividends thereon, on surrender of share certificate or certificates held by such holders; and upon the deposit of such notice in the mail and the making of such deposit of money with such bank or trust company, such holders shall cease to be shareholders with respect to such shares; and from and after the time such notice shall have been so deposited and such deposit of money shall have been so made, such holders shall have no rights or claim against the corporation with respect to such shares, except only the right to receive such money from such bank or trust company without interest or to exercise before the redemption date any unexpired privileges of conversion. In the event less than all of the outstanding Serial Preferred Shares are to be redeemed, the corporation shall select by lot the shares so to be redeemed in such manner as shall be prescribed by the Board of Directors. (2) If the holders of Serial Preferred Shares which have been called for redemption shall not within six years after such deposit claim the amount deposited for the redemption thereof, any such bank or trust company shall, upon demand, pay over to -12- the corporation such unclaimed amounts and thereupon such bank or trust company and the corporation shall be relieved of all responsibility in respect thereof and to such holders. (c) Any Serial Preferred Shares which are (1) redeemed by the corporation pursuant to the provisions of this Section, (2) purchased and delivered in satisfaction of any sinking fund requirements provided for shares of such series, (3) converted in accordance with the express terms thereof, or (4) otherwise acquired by the corporation, shall resume the status of authorized but unissued Serial Preferred Shares without serial designation. Section 4. Liquidation. (a) (1) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation, the holders of Serial Preferred Shares of any series shall be entitled to receive in full out of the assets of the corporation, including its capital, before any amount shall be paid or distributed among the holders of the Common Shares or any other shares ranking junior to the Serial Preferred Shares, the amounts fixed with respect to shares of such series in accordance with Section 1 of this Division, plus an amount equal to all dividends accrued and unpaid thereon to the date of payment of the amount due pursuant to such liquidation, dissolution or winding up of the affairs of the corporation. In the event the net assets of the corporation legally available therefor are insufficient to permit the payment upon all outstanding Serial Preferred Shares and Voting Preference Shares of the full preferential amount to which they are respectively entitled, then such net assets shall be distributed ratably upon all outstanding Serial Preferred Shares and Voting Preference Shares in proportion to the full preferential amount to which each such share is entitled. (2) After payment to the holders of Serial Preferred Shares of the full preferential amounts as aforesaid, the holders of Serial Preferred Shares, as such, shall have no right or claim to any of the remaining assets of the corporation. (b) The merger or consolidation of the corporation into or with any other corporation, the merger of any other corporation into it, or the sale, lease or conveyance of all or substantially all the assets of the corporation, shall not be deemed to be a dissolution, liquidation or winding up for the purposes of this Section. Section 5. Voting. (a) The holders of Serial Preferred Shares shall have no voting rights, except as provided in this Section or required by law. (b) (1) If, and so often as, the corporation shall be in default in the payment of the equivalent of the full dividends on any series of Serial Preferred Shares at the time outstanding, whether or not earned or declared, for a number of dividend payment periods (whether or not consecutive) which in the aggregate contain at least 540 days, the holders of Serial Preferred Shares of all series, voting separately as a class, shall be entitled to elect, as herein provided, two members of the Board of Directors of the corporation; provided, however, that the holders of Serial Preferred Shares shall not have or exercise such special class voting rights except at meetings of such shareholders for the election of directors at which the holders of not less than 50% of the outstanding Serial Preferred Shares of all series then outstanding are present in person or by proxy; and provided further that the special class voting rights provided for in this paragraph when the same shall have become vested shall remain so vested until all accrued and -13- unpaid dividends on the Serial Preferred Shares of all series then outstanding shall have been paid, whereupon the holders of Serial Preferred Shares shall be divested of their special class voting rights in respect of subsequent elections of directors, subject to the revesting of such special class voting rights in the event above specified in this paragraph. (2) In the event of default entitling the holders of Serial Preferred Shares to elect two directors as specified in paragraph (1) of this Subsection, a special meeting of such holders for the purpose of electing such directors shall be called by the Secretary of the corporation upon written request of, or may be called by, the holders of record of at least 10% of the Serial Preferred Shares of all series at the time outstanding, and notice thereof shall be given in the same manner as that required for the annual meeting of shareholders; provided, however, that the corporation shall not be required to call such special meeting if the annual meeting of shareholders shall be called to be held within 120 days after the date of receipt of the foregoing written request from the holders of Serial Preferred Shares. At any meeting at which the holders of Serial Preferred Shares shall be entitled to elect directors, the holders of 50% of the Serial Preferred Shares of all series at the time outstanding, present in person or by proxy, shall be sufficient to constitute a quorum, and the vote of the holders of a majority of such shares so present at any such meeting at which there shall be such a quorum shall be sufficient to elect the members of the Board of Directors which the holders of Serial Preferred Shares are entitled to elect as herein provided. Notwithstanding any provision of these Amended Articles of Incorporation or the Code of Regulations of the corporation or any action taken by the holders of any class of shares fixing the number of directors of the corporation, the two directors who may be elected by the holders of Serial Preferred Shares pursuant to this Subsection shall serve in addition to any other directors then in office or proposed to be elected otherwise than pursuant to this Subsection. Nothing in this Subsection shall prevent any change otherwise permitted in the total number of directors of the corporation nor require the resignation of any director elected otherwise than pursuant to this Subsection. Notwithstanding any classification of the other directors of the corporation, the two directors elected by the holders of Serial Preferred Shares shall be elected annually for terms expiring at the next succeeding annual meeting of shareholders. (3) Upon any divesting of the special class voting rights of the holders of the Serial Preferred Shares in respect of elections of directors as provided in this Subsection, the terms of office of all directors then in office elected by such holders shall terminate immediately thereupon. If the office of any director elected by such holders voting as a class becomes vacant by reason of death, resignation, removal from office or otherwise, the remaining director elected by such holders voting as a class may elect a successor who shall hold office for the unexpired term in respect of which such vacancy occurred. (c) The affirmative vote or consent of the holders of at least two-thirds of the Serial Preferred Shares at the time outstanding, voting or consenting separately as a class, given in person or by proxy either in writing or at a meeting called for the purpose, shall be necessary to effect any one or more of the following (but so far as the holders of Serial Preferred Shares are concerned, such action may be effected with such vote or consent): (1) Any amendment, alteration or repeal, whether by merger, consolidation or otherwise, of any of the provisions of the Amended Articles of Incorporation or of the Code of Regulations of the corporation which affects adversely the preferences or voting or other rights of the holders of Serial Preferred Shares; provided, however, neither the amendment of the Amended Articles of Incorporation so as to authorize, create or change -14- the authorized or outstanding number of Serial Preferred Shares or of any shares ranking on a parity with or junior to the Serial Preferred Shares nor the amendment of the provisions of the Code of Regulations so as to change the number of directors of the corporation shall be deemed to affect adversely the preferences or voting or other rights of the holders of Serial Preferred Shares; and provided further, that if such amendment, alteration or repeal affects adversely the preferences or voting or other rights of one or more but not all series of Serial Preferred Shares at the time outstanding, only the affirmative vote or consent of the holders of at least two-thirds of the number of the shares at the time outstanding of the series so affected shall be required; (2) The authorization, creation or the increase in the authorized number of any shares, or any security convertible into shares, in either case ranking prior to the Serial Preferred Shares; or (3) The purchase or redemption (for sinking fund purposes or otherwise) of less than all of the Serial Preferred Shares then outstanding except in accordance with a stock purchase offer made to all holders of record of Serial Preferred Shares, unless all dividends on all Serial Preferred Shares then outstanding for all previous dividend periods shall have been declared and paid or funds therefor set apart and all accrued sinking fund obligations applicable thereto shall have been complied with. Section 6. Pre-emptive Rights. No holder of Serial Preferred Shares as such, shall have any pre-emptive right to purchase, have offered to him for purchase or subscribe for any of the corporation's shares or other securities of any class, whether now or hereafter authorized. Section 7. Definitions. For the purposes of this Division: (a) Whenever reference is made to shares "ranking prior to the Serial Preferred Shares," such reference shall mean and include all shares of the corporation in respect of which the rights of the holders thereof as to the payment of dividends or as to distributions in the event of a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation are given preference over the rights of the holders of Serial Preferred Shares; (b) Whenever reference is made to shares "on a parity with the Serial Preferred Shares," such reference shall mean and include all Voting Preference Shares and all other shares of the corporation in respect of which the rights of the holders thereof as to the payment of dividends or as to distributions in the event of a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation rank equally (except as to the amounts fixed therefor) with the rights of the holders of Serial Preferred Shares; and (c) Whenever reference is made to shares "ranking junior to the Serial Preferred hares," such reference shall mean and include all shares of the corporation other than those defined under Subsections (a) and (b) of this Section as shares "ranking prior to" or "on a parity with" the Serial Preferred Shares. DIVISION B The Voting Preference Shares shall have the following express terms: Section 1. Series. The Voting Preference Shares may be issued from time to time in one or more series. All shares of Voting Preference Shares shall be of equal rank and shall be identical, except in respect of the matters that maybe fixed by the Board of Directors as hereinafter provided, and each share of a series shall be identical with all other shares of such series, except as to the dates from which -15- dividends shall accrue and be cumulative. All Voting Preference Shares shall rank on a parity with and be identical to all Serial Preferred Shares except in respect of (i) the matters that may be fixed by the Board of Directors as provided in clauses (a) through (i), both inclusive, of this Section and (ii) the voting rights and provisions for consents relating to Voting Preference Shares as fixed and determined by Section 5 of this Division. Subject to the provisions of Sections 2 through 7, both inclusive, of this Division, which provisions shall apply to all Voting Preference Shares, the Board of Directors hereby is authorized to cause such shares to be issued in one or more series and with respect to each such 20series to determine and fix prior to the issuance thereof (and thereafter, to the extent provided in clause (b) of this Section) the following: (a) The designation of the series, which may be by distinguishing number, letter or title; (b) The authorized number of shares of the series, which number the Board of Directors may (except where otherwise provided in the creation of the series) increase or decrease from time to time before or after the issuance thereof (but not below the number of shares thereof then outstanding); (c) The dividend rate or rates of the series; (d) The dates on which and the period or periods for which dividends, if declared, shall be payable and the date or dates from which dividends shall accrue and be cumulative; (e) The redemption rights and price or prices, if any, for shares of the series; (f) The terms and amount of the sinking fund, if any, for the purchase or redemption of shares of the series; (g) The amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation; (h) Whether the shares of the series shall be convertible into Common Shares or shares of any other class and, if so, the conversion rate or rates or price or prices, any adjustments thereof and all other terms and conditions upon which such conversion may be made; and (i) Restrictions (in addition to those set forth in Subsection 5(c) of this Division) on the issuance of shares of the same series or of any other class or series. The Board of Directors is authorized to adopt from time to time amendments to the Amended Articles of Incorporation fixing, with respect to each such series, the matters described in clauses (a) through (i), both inclusive, of this Section and is authorized to take such actions with respect thereto as may be required by law in order to effect such amendments. Section 2. Dividends. (a) The holders of Voting Preference Shares of each series, in preference to the holders of Common Shares and of any other class of shares ranking junior to the Voting Preference Shares, shall be entitled to receive out of any funds legally available for Voting Preference Shares and Serial Preferred Shares and when and as declared by the Board of Directors, dividends in cash at the rate or rates for such series fixed in accordance with the provisions of Section 1 of this Division and no more, payable on the dates fixed for such series. Such dividends shall accrue and be cumulative, in the case of shares of each particular series, from and after the date or dates fixed with respect to such series. No dividends shall be paid upon -16- or declared or set apart for any series of the Voting Preference Shares for any dividend period unless at the same time (1) a like proportionate dividend for the dividend periods terminating on the same or any earlier date, ratably in proportion to the respective annual dividend rates fixed therefor, shall have been paid upon or declared or set apart for all Voting Preference Shares of all series then issued and outstanding and entitled to receive such dividend and (2) the dividends payable for the dividend periods terminating on the same or any earlier date, ratably in proportion to the respective dividend rates fixed therefor, shall have been paid upon or declared or set apart for all Serial Preferred Shares of all series then issued and outstanding and entitled to receive such dividend. (b) So long as any Voting Preference Shares shall be outstanding no dividend, except a dividend payable in Common Shares or other shares ranking junior to the Voting Preference Shares, shall be paid or declared or any distribution be made, except as aforesaid, in respect of the Common Shares or any other shares ranking junior to the Voting Preference Shares, nor shall any Common Shares or any other shares ranking junior to the Voting Preference Shares be purchased, retired or otherwise acquired by the corporation, except out of the proceeds of the sale of Common Shares or other shares of the corporation ranking junior to the Voting Preference Shares received by the corporation subsequent to the date of first issuance of Voting Preference Shares of any series, unless: (1) All accrued and unpaid dividends on Voting Preference Shares, including the full dividends for all current dividend periods, shall have been declared and paid or a sum sufficient for payment thereof set apart; and (2) There shall be no arrearages with respect to the redemption of Voting Preference Shares of any series from any sinking fund provided for shares of such series in accordance with the provisions of Section 1 of this Division. Section 3. Redemption. (a) Subject to the express terms of each series and the provisions of Subsection 5(c)(6) of this Division, the corporation: (1) May, from time to time at the option of the Board of Directors, redeem all or any part of any redeemable series of Voting Preference Shares at the time outstanding at the applicable redemption price for such series fixed in accordance with the provisions of Section 1 of this Division; and (2) Shall, from time to time, make such redemptions of each series of Voting Preference Shares as may be required to fulfill the requirements of any sinking fund provided for shares of such series at the applicable sinking fund redemption price fixed in accordance with the provisions of Section 1 of this Division; and shall in each case pay all accrued and unpaid dividends to the redemption date. (b) (1) Notice of every such redemption shall be mailed, postage prepaid, to the holders of record of the Voting Preference Shares to be redeemed at their respective addresses then appearing on the books of the corporation, not less than 30 days nor more than 60 days prior to the date fixed for such redemption, or such other time prior thereto as the Board of Directors shall fix for any series pursuant to Section 1 of this Division prior to the issuance thereof. At any time after notice as provided above has been deposited in the mail, the corporation may deposit the aggregate redemption price of Voting Preference Shares to be redeemed, together with accrued and unpaid dividends -17- thereon to the redemption date, with any bank or trust company in Cleveland, Ohio or New York, New York, having capital and surplus of not less than $100,000,000, named in such notice and direct that there be paid to the respective holders of the Voting Preference Shares so to be redeemed amounts equal to the redemption price of the Voting Preference Shares so to be redeemed, together with such accrued and unpaid dividends thereon, on surrender of the share certificate or certificates held by such holders; and upon the deposit of such notice in the mail and the making of such deposit of money with such bank or trust company, such holders shall cease to be shareholders with respect to such shares; and from and after the time such notice shall have been so deposited and such deposit of money shall have been so made, such holders shall have no rights or claim against the corporation with respect to such shares, except only the right to receive such money from such bank or trust company without interest or to exercise before the redemption date any unexpired privileges of conversion. In the event less than all of the outstanding Voting Preference Shares are to be redeemed, the corporation shall select by lot the shares so to be redeemed in such manner as shall be prescribed by the Board of Directors. (2) If the holders of Voting Preference Shares which have been called for redemption shall not within six years after such deposit claim the amount deposited for the redemption thereof, any such bank or trust company shall, upon demand, pay over to the corporation such unclaimed amounts and thereupon such bank or trust company and the corporation shall be relieved of all responsibility in respect thereof and to such holders. (c) Any Voting Preference Shares which are (1) redeemed by the corporation pursuant to the provisions of this Section, (2) purchased and delivered in satisfaction of any sinking fund requirements provided for shares of such series, (3) converted in accordance with the express terms thereof, or (4) otherwise acquired by the corporation, shall resume the status of authorized but unissued Voting Preference Shares without serial designation. Section 4. Liquidation. (a) (1) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation, the holders of Voting Preference Shares of any series shall be entitled to receive in full out of the assets of the corporation, including its capital, before any amount shall be paid or distributed among the holders of the Common Shares or any other shares ranking junior to the Voting Preference Shares, the amounts fixed with respect to shares of such series in accordance with Section 1 of this Division, plus an amount equal to all dividends accrued and unpaid thereon to the date of payment of the amount due pursuant to such liquidation, dissolution or winding up of the affairs of the corporation. In the event the net assets of the corporation legally available therefor are insufficient to permit the payment upon all outstanding Voting Preference Shares and Serial Preferred Shares of the full preferential amount to which they are respectively entitled, then such net assets shall be distributed ratably upon all outstanding Voting Preference Shares and Serial Preferred Shares in proportion to the full preferential amount to which each such share is entitled. (2) After payment to the holders of Voting Preference Shares of the full preferential amounts as aforesaid, the holders of Voting Preference Shares, as such, shall have no right or claim to any of the remaining assets of the corporation. (b) The merger or consolidation of the corporation into or with any other corporation, the merger of any other corporation into it, or the sale, lease or conveyance of all or -18- substantially all the assets of the corporation, shall not be deemed to be a dissolution, liquidation or winding up for the purposes of this Section. Section 5. Voting. (a) The holders of Voting Preference Shares shall be entitled at all times to one vote for each share and, except as otherwise provided in this Section or required by law, the holders of Voting Preference Shares and the holders of Common Shares shall vote together as a class on all matters presented, subject, however, to the special voting rights of the holders of Serial Preferred Shares as provided in Section 5 of Division A hereof. (b) (1) If, and so often as, the corporation shall be in default in the payment of the equivalent of the full dividends on any series of Voting Preference Shares at the time outstanding, whether or not earned or declared, for a number of dividend payment periods (whether or not consecutive) which in the aggregate contain at least 540 days, the holders of Voting Preference Shares of all series, voting separately as a class, shall be entitled to elect, as herein provided, two members of the Board of Directors of the corporation; provided, however, that the holders of Voting Preference Shares shall not have or exercise such special class voting rights except at meetings of such shareholders for the election of directors at which the holders of not less than 50% of the outstanding Voting Preference Shares of all series then outstanding are present in person or by proxy; and provided further that the special class voting rights provided for in this paragraph when the same shall have become vested shall remain so vested until all accrued and unpaid dividends on the Voting Preference Shares of all series then outstanding shall have been paid, whereupon the holders of Voting Preference Shares shall be divested of their special class voting rights in respect of subsequent elections of directors, subject to the revesting of such special class voting rights in the event above specified in this paragraph. (2) In the event of default entitling the holders of Voting Preference Shares to elect two directors as specified in paragraph (1) of this Subsection, a special meeting of such holders for the purpose of electing such directors shall be called by the Secretary of the corporation upon written request of, or may be called by, the holders of record of at least 10% of the Voting Preference Shares of all series at the time outstanding, and notice thereof shall be given in the same manner as that required for the annual meeting of shareholders; provided, however, that the corporation shall not be required to call such special meeting if the annual meeting of shareholders shall be called to be held within 120 days after the date of receipt of the foregoing written request from the holders of Voting Preference Shares. At any meeting at which the holders of Voting Preference Shares shall be entitled to elect directors, the holders of 50% of the Voting Preference Shares of all series at the time outstanding, present in person or by proxy, shall be sufficient to constitute a quorum, and the vote of the holders of a majority of such shares so present at any such meeting at which there shall be such a quorum shall be sufficient to elect the members of the Board of Directors which the holders of Voting Preference Shares are entitled to elect as herein provided. Notwithstanding any provision of these Amended Articles of Incorporation or the Code of Regulations of the corporation or any action taken by the holders of any class of shares fixing the number of directors of the corporation, the two directors who may be elected by the holders of Voting Preference Shares pursuant to this Subsection shall serve in addition to any other directors then in office or proposed to be elected otherwise than pursuant to this Subsection. Nothing in this Subsection shall prevent any change otherwise permitted in the total number of directors of the corporation or require the resignation of any director elected otherwise than pursuant to this Subsection. Notwithstanding any classification of the other -19- directors of the corporation, the two directors elected by the holders of Voting Preference Shares shall be elected annually for terms expiring at the next succeeding annual meeting of shareholders. (3) Upon any divesting of the special class voting rights of the holders of the Voting Preference Shares in respect of elections of directors as provided in this Subsection, the terms of office of all directors then in office elected by such holders shall terminate immediately thereupon. If the office of any director elected by such holders voting as a class becomes vacant by reason of death, resignation, removal from office or otherwise, the remaining director elected by such holders voting as a class may elect a successor who shall hold office for the unexpired term in respect of which such vacancy occurred. (c) The affirmative vote or consent of the holders of at least two-thirds of the Voting Preference Shares at the time outstanding, voting or consenting separately as a class, given in person or by proxy either in writing or at a meeting called for the purpose, shall be necessary to effect any one or more of the following (but so far as the holders of Voting Preference Shares are concerned, such action may be effected with such vote or consent): (1) The sale, lease or conveyance by the corporation of all or substantially all of its assets; (2) The merger or consolidation of the corporation into or with any other corporation or the merger of any other corporation into it; (3) The voluntary liquidation, dissolution or winding up of the affairs of the corporation; (4) Any amendment, alteration or repeal, whether by merger, consolidation or otherwise, of any of the provisions of the Amended Articles of Incorporation or of the Code of Regulations of the corporation which affects adversely the preferences or voting or other rights of the holders of Voting Preference Shares; provided, however, that for the purpose of this paragraph only, neither the amendment of the Amended Articles of Incorporation so as to authorize, create or change the authorized or outstanding number of Voting Preference Shares or of any shares ranking on a parity with or junior to the Voting Preference Shares nor the amendment of the provisions of the Code of Regulations so as to change the number of directors of the corporation shall be deemed to affect adversely the preferences or voting or other rights of the holders of Voting Preference Shares; and provided further, that if such amendment, alteration or repeal affects adversely the preferences or voting or other rights of one or more but not all series of Voting Preference Shares at the time outstanding, only the affirmative vote or consent of the holders of at least two-thirds of the number of the shares at the time outstanding of the series so affected shall be required; (5) The authorization, creation or the increase in the authorized amount of any shares, or any security convertible into shares, in either case ranking prior to the Voting Preference Shares; or (6) The purchase or redemption (for sinking fund purposes or otherwise) of less than all of the Voting Preference Shares then outstanding except in accordance with a stock purchase offer made to all holders of record of Voting Preference Shares, unless all dividends on all Voting Preference Shares then outstanding for all previous dividend -20- periods shall have been declared and paid or funds therefore set apart and all accrued sinking fund obligations applicable thereto shall have been complied with. Section 6. Pre-emptive Rights. No holder of Voting Preference Shares as such shall have any preemptive right to purchase or subscribe for any of the corporation's shares or other securities of any class, whether now or hereafter authorized. Section 7. Definitions. For the purposes of this Division: (a) Whenever reference is made to shares "ranking prior to the Voting Preference Shares," such reference shall mean and include all shares of the corporation in respect of which the rights of the holders thereof as to the payment of dividends or as to distributions in the event of a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation are given preference over the rights of the holders of Voting Preference Shares; (b) Whenever reference is made to shares "on a parity with the Voting Preference Shares," such reference shall mean and include all Serial Preferred Shares and all other shares of the corporation in respect of which the rights of the holders thereof as to the payment of dividends or as to distributions in the event of a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation rank equally (except as to the amounts fixed therefor) with the rights of the holders of Voting Preference Shares; and (c) Whenever reference is made to shares "ranking junior to the Voting Preference Shares," such reference shall mean and include all shares of the corporation other than those defined under Subsections (a) and (b) of this Section as shares "ranking prior to" or "on a parity with" the Voting Preference Shares. DIVISION C The Common Shares shall have the following express terms: The Common Shares shall be subject to the express terms of the Serial Preferred Shares and any series thereof and to the express terms of the Voting Preference Shares and any series thereof. Each Common Share shall be equal to every other Common Share and the holders thereof shall be entitled to one vote for each Common Share on all matters presented. No holder of Common Shares shall have any pre-emptive right to purchase or subscribe for any of the corporation's shares or other securities of any class, whether now or hereafter authorized. IN WITNESS WHEREOF, Peter B. Lewis, President, and David M. Schneider, Secretary, of The Progressive Corporation, acting for and on its behalf do hereunto subscribe their names this 19th day of April, 1991. /s/ Peter B. Lewis -------------------------------- Peter B. Lewis, President /s/ David M. Schneider -------------------------------- David M. Schneider, Secretary -21- CERTIFICATE OF AMENDMENT TO AMENDED ARTICLES OF INCORPORATION OF THE PROGRESSIVE CORPORATION PETER B. LEWIS, President, and DAVID M. SCHNEIDER, Secretary, of The Progressive Corporation, an Ohio corporation for profit with its principal office in Mayfield Village, Cuyahoga County, Ohio (the "Company"), do hereby certify that a Written Action Taken Without A Meeting of the Executive Committee of the Board of Directors of the Company was duly executed by all members of the Executive Committee of the Board of Directors and that the following resolution to amend the Amended Articles of Incorporation of the Company was adopted pursuant to said Written Action Taken Without A Meeting by the Executive Committee of the Board of Directors of the Company pursuant to the authority of Section 1701.70(B)(1) and 1701.73(A) of the Ohio Revised Code and Section 1 of Division A of Article Fourth of said Amended Articles of Incorporation: RESOLVED, that the Amended Articles of Incorporation of the Company be and they hereby are amended by adding at the end of Division A of Article FOURTH thereof a new Section 8 reading as follows: Section 8. 9 3/8% Serial Preferred Shares, Series A. Of the 20,000,000 authorized Serial Preferred Shares, without par value, 4,600,000 shares are designated as a series entitled "9 3/8% Serial Preferred Shares, Series A" (hereinafter called "Series A Shares"). The Series A Shares shall have the express terms set forth in this Division as being applicable to all Serial Preferred Shares as a class and, in addition, the following express terms applicable to all Series A Share as a series of Serial Preferred Shares: (a) The annual dividend rate of the Series A Shares shall be 9-3/8% of the liquidation preference of $25.00 per share. (b) Dividends on Series A Shares shall be payable, if declared, quarterly on March 31, June 30, September 30 and December 31 of each year, the first quarterly dividend being payable, if declared, on June 30, 1991. The dividends payable for each full quarterly dividend period on each Series A Share shall be $.5859375. Dividends for the initial dividend period on the Series A Shares, or for any period shorter or longer than a full dividend period on the Series A Shares, shall be computed on the basis of 30-day months and a 360-day year. The aggregate dividend payable quarterly to 29 each holder of Series A Shares shall be rounded to the nearest one cent with $.005 being rounded upward. Each dividend shall be payable to the holders of record on such record date, not less than 15 nor more than 30 days preceding the payment date thereof, as shall be fixed from time to time by the corporation's Board of Directors. (c) Dividends on Series A Shares shall be cumulative as follows: (1) With respect to shares included in the initial issue of Series A Shares and shares issued any time thereafter up to and including the record date for the payment of the first dividend on the initial issue of series A Shares, dividends shall be cumulative from the date of the initial issue of Series A Shares; and -22- (2) With respect to shares issued any time after the aforesaid record date, dividends shall be cumulative from the dividend payment date next preceding the date of issue of such shares, except that if such shares are issued during the period commencing the day after the record date for the payment of a dividend on Series A Shares and ending on the payment date of that dividend, dividends with respect to such shares shall be cumulative from that dividend payment date. (d) Subject to the provisions of Subsection 5(c)(3) of this Division, the Series A Shares shall be redeemable in the manner provided in Subsections 3(b)(1) and (2) of this Division as follows: (1) Except as provided in clause (2) of this Subsection (d), the Series A Shares may not be redeemed prior to May 31, 1996. At any time or from time to time on and after May 31, 1996, the corporation, at its option, may redeem all or any part of the Series A Shares at a redemption price of $25.00 per share plus, in each case, an amount equal to all dividends accrued and unpaid thereon to the redemption date. (2) Prior to May 31, 1996, the corporation, at its option, may redeem all, but not less than all, of the outstanding Series A Shares if the holders of such shares shall be entitled to vote upon or consent to any amendment, alteration or repeal, whether by merger, consolidation or otherwise, of any of the provisions of the Amended Articles of Incorporation or of the Code of Regulations of the corporation which affects adversely the preferences or voting or other rights of the holders of Series A Shares, as specified under Subsection 5(c)(1) of this Division, and all of the following conditions have been satisfied: (a) the corporation shall have requested the vote or consent of the holders of the Series A Shares to such amendment, alteration or repeal, stating in such request that failing the requisite favorable vote or consent the corporation will have the option to redeem such shares, (b) the corporation shall not have received the requisite favorable vote or consent within 60 days after making such request (which shall be deemed to have been made upon the mailing of the notice of any meeting of holders of Series A Shares to vote upon such approval or grant such consent) and (c) such amendment, alteration or repeal, whether in connection with a merger, consolidation or otherwise, shall be effected on the date fixed for such redemption, which date shall be no more than one year after such request is made. Any such redemption shall be on notice as aforesaid at a redemption price of 425.00 per Series A Share plus an amount equal to all dividends accrued and unpaid thereon to the redemption date. (e) The amount payable per Series A Share in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation shall be $25.00, plus an amount equal to all dividends accrued and unpaid thereon to the date of payment. -23- IN WITNESS WHEREOF, Peter B. Lewis, President, and David M. Schneider, Secretary, of The Progressive Corporation, acting for and on its behalf do hereunto subscribe their names this fourteenth day of May, 1991. /s/ Peter B. Lewis -------------------------------- Peter B. Lewis, President /s/ David M. Schneider -------------------------------- David M. Schneider, Secretary -24- CERTIFICATE OF AMENDMENT TO AMENDED ARTICLES OF INCORPORATION OF THE PROGRESSIVE CORPORATION PETER B. LEWIS, President, and DAVID M. SCHNEIDER, Secretary, of The Progressive Corporation, an Ohio corporation for profit with its principal office at Mayfield Village, Cuyahoga County, Ohio (the "Company"), do hereby certify that a meeting of the Shareholders of the Company was duly called and held on April23, 1993 at which meeting a quorum of the shareholders was present in person, or by proxy, and by the affirmative vote of the holders of shares entitling them to exercise a majority of the voting power of the Company on a proposal to amend the Company's Amended Articles of Incorporation, the following resolution was adopted: RESOLVED, that the first paragraph of Article FOURTH of the Company's Amended Articles of Incorporation, which precedes DIVISION A thereof be, and the same is, hereby amended and restated in its entirety to provide as follows: FOURTH. The authorized number of shares of the corporation is 225,000,000, consisting of 20,000,000 Serial Preferred Shares, without par value (hereinafter called "Serial Preferred Shares"), 5,000,000 Voting Preference Shares, without par value (hereinafter called "Voting Preference Shares"), and 200,000 Common Shares, $1.00 par value (hereinafter called "Common Shares). IN WITNESS WHEREOF, Peter B. Lewis, President, and David M. Schneider, Secretary of The Progressive Corporation, acting for and on its behalf do hereunto subscribe their names this 23rd day of April, 1993. /s/ Peter B. Lewis -------------------------------- Peter B. Lewis, President /s/ David M. Schneider -------------------------------- David M. Schneider, Secretary -25- CERTIFICATE OF AMENDMENT TO AMENDED ARTICLES OF INCORPORATION OF THE PROGRESSIVE CORPORATION DAVID M. SCHNEIDER, Secretary of the Progressive Corporation, an Ohio corporation for profit with its principal office at Mayfield Village, Cuyahoga County, Ohio (the "Company"), does hereby certify that a meeting of the Shareholders of the Company was duly called and held on April 24, 1998, at which meeting a quorum of the Shareholders was present in person or by proxy, and by the affirmative vote of the holders of shares entitling them to exercise a majority of the voting power of the Company on a proposal to amend the Company's Amended Articles of Incorporation, the following resolution was adopted: RESOLVED, that the first paragraph of Article FOURTH of the Company's Amended Articles of Incorporation, which precedes DIVISION A thereof be, and the same is, hereby amended and restated in its entirety to provide as follows: FOURTH. The authorized number of shares of the corporation is 325,000,000, consisting of 20,000,000 Serial Preferred Shares, without par value (hereinafter called "Serial Preferred Shares"), 5,000,000 Voting Preference Shares, without par value (hereinafter called "Voting Preference Shares"), and 300,000,000 Common Shares, $1.00 par value (hereinafter called "Common Shares"). IN WITNESS WHEREOF, David M. Schneider, Secretary of The Progressive Corporation, acting for and on behalf of said corporation, does hereunto subscribe his name this 24th day of April, 1998. /s/ David M. Schneider -------------------------------- David M. Schneider, Secretary -26- CERTIFICATE OF AMENDMENT TO AMENDED ARTICLES OF INCORPORATION OF THE PROGRESSIVE CORPORATION CHARLES E. JARRETT, Secretary of The Progressive Corporation, an Ohio corporation for profit with its principal office at Mayfield Village, Cuyahoga County, Ohio (the "Company"), does hereby certify that a meeting of the Shareholders of the Company was duly called and held on April 18, 2003, at which meeting a quorum of the Shareholders was present in person or by proxy, and by the affirmative vote of the holders of shares entitling them to exercise a majority of the voting power of the Company on a proposal to amend the Company's Amended Articles of Incorporation, the following resolution was adopted: RESOLVED, that the first paragraph of Article FOURTH of the Company's Amended Articles of Incorporation, which precedes DIVISION A thereof be, and the same is, hereby amended and restated in its entirety to provide as follows: Article FOURTH. The authorized number of shares of the corporation is 625,000,000, consisting of 20,000,000 Serial Preferred Shares, without par value (hereinafter called "Serial Preferred Shares"), 5,000,000 Voting Preference Shares, without par value (hereinafter called "Voting Preference Shares"), and 600,000,000 Common Shares, $1.00 par value (hereinafter called "Common Shares"). IN WITNESS WHEREOF, Charles E. Jarrett, Secretary of The Progressive Corporation, acting for and on behalf of said corporation, does hereunto subscribe his name this 18th day of April, 2003. /s/ Charles E. Jarrett ---------------------------------- Charles E. Jarrett, Secretary -27- EX-4.E 7 l00196aexv4we.txt EX-4(E) AMENDED CODE OF REGULATIONS Exhibit 4(e) CODE OF REGULATIONS OF THE PROGRESSIVE CORPORATION (as amended April 18, 2003) ARTICLE I MEETINGS OF SHAREHOLDERS Section 1. ANNUAL MEETINGS. The annual meeting of shareholders shall be held at such time and on such date in the month of April of each year (beginning in 1972) as may be fixed by the board of directors and stated in the notice of the meeting, for the election of directors the consideration of reports to be laid before such meeting and the transaction of such other business as may properly come before the meeting. Section 2. SPECIAL MEETINGS. Special meetings of the shareholders shall be called upon the written request of the president, the directors by action at a meeting, a majority of the directors acting without a meeting, or of the holders of shares entitling them to exercise twenty-five percent (25%) of the voting power of the corporation entitled to vote thereat. Calls for such meetings shall specify the time, place, and purposes thereof. No business other than that specified in the call shall be considered at any special meeting. Section 3. NOTICES OF MEETINGS. Unless waived, written notice of each annual or special meeting stating the time, place, and the purposes thereof, and the means, if any, by which shareholders can be present and vote at the meeting through the use of communications equipment, shall be given by personal delivery, by mail, by overnight delivery service or by any other means of communication authorized by the shareholder to whom the notice is given, to each shareholder of record entitled to vote at or entitled to notice of the meeting, not more than sixty (60) days nor less than seven (7) days before any such meeting. If mailed or sent by overnight delivery service, such notice shall be directed to the shareholder at his address as the same appears upon the records of the corporation. If sent by any other means of communication authorized by the shareholder, the notice shall be sent to the address furnished by the shareholder for those transmissions. Any shareholder, either before or after any meeting, may waive any notice required to be given by law or under these Regulations. Section 4. PLACE OF MEETINGS. Meetings of shareholders shall be held at the principal office of the corporation unless the board of directors determines that a meeting shall be held at some other place within or without the State of Ohio and causes the notice thereof to so state. Notwithstanding the foregoing, the board of directors may determine that a meeting of shareholders shall not be held at any physical place, but instead may be held solely by means of communications equipment as authorized in the following paragraph. 1 If authorized by the board of directors, the shareholders and proxyholders who are not physically present at a meeting of shareholders may attend a meeting of shareholders by use of communications equipment that enables the shareholder or proxyholder an opportunity to participate in the meeting and to vote on matters submitted to the shareholders, including an opportunity to read or hear the proceedings of the meeting and to speak or otherwise participate in the proceedings contemporaneously with those physically present. Any shareholder using communications equipment will be deemed present in person at the meeting, whether the meeting is to be held at a designated place or solely by means of communications equipment. The directors may adopt guidelines and procedures for the use of communications equipment in connection with a meeting of shareholders to permit the corporation to verify that a person is a shareholder or proxyholder and to maintain a record of any vote or other action. Section 5. QUORUM. The holders of shares entitling them to exercise a majority of the voting power of the corporation entitled to vote at any meeting, present in person or by proxy, shall constitute a quorum for the transaction of business to be considered at such meeting; provided, however, that no action required by law or by the Articles of Incorporation or these Regulations to be authorized or taken by the holders of a designated proportion of the shares of any particular class or of each class may be authorized or taken by a lesser proportion. The holders of a majority of the voting shares represented at a meeting, whether or not a quorum is present, may adjourn such meeting from time to time, until a quorum shall be present. Section 6. RECORD DATE. The board of directors may fix a record date for any lawful purpose, including, without limiting the generality of the foregoing, the determination of shareholders entitled to (i) receive notice of or to vote at any meeting, (ii) receive payment of any dividend or distribution, (iii) receive or exercise rights of purchase of or subscription for, or exchange or conversion of, shares or other securities, subject to any contract right with respect thereto, or (iv) participate in the execution of written consents, waivers or releases. Said record date, which shall not be a date earlier than the date on which the record date is fixed, shall not be more than sixty (60) days preceding the date of such meeting, the date fixed for the payment of any dividend or distribution or the date fixed for the receipt or the exercise of rights, as the case may be. If a record date shall not be fixed, the record date for the determination of shareholders who are entitled to notice of, or who are entitled to vote at, a meeting of shareholders, shall be the close of business on the date next preceding the day on which notice is given, or the close of business on the date next preceding the day on which the meeting is held, as the case may be. Section 7. PROXIES. A person who is entitled to attend a shareholders' meeting, to vote thereat, or to execute consents, waivers or releases, may be represented at such meeting or vote thereat, and execute consents, waivers and releases, and exercise any of his other rights, by proxy or proxies appointed by a writing signed by such person or appointed by a verifiable communication authorized by the person. 2 ARTICLE II DIRECTORS Section 1. NUMBER AND CLASSIFICATION OF DIRECTORS. The number of directors of the corporation, none of whom need to be a shareholder or resident of the State of Ohio, shall be ten, and such directors shall be divided into three classes as nearly equal in number as possible, to be known as Class I, Class II and Class III. The classes shall be elected to staggered terms. The shareholders, acting by the affirmative vote of the holders of record of shares representing 75% of the voting power of the corporation on such proposal, may, from time to time, increase or decrease the number of directors, but in no case shall the number of directors be fewer than five or more than twelve nor shall any decrease in the number of directors shorten the term of any director then in office. In case of any increase in the number of directors, the directors then in office may select the class or classes to which the additional directors shall be assigned, provided that the directors shall be distributed among the several classes as nearly equally as possible. Section 2. ELECTION OF DIRECTORS. Directors shall be elected at the annual meeting of shareholders, but when the annual meeting is not held or directors are not elected thereat, they may be elected at a special meeting called and held for that purpose. Such election shall be by ballot whenever requested by any shareholder entitled to vote at such election; but, unless such request is made, the election may be conducted in any manner approved at such meeting. At each meeting of shareholders for the election of directors, the persons receiving the greatest number of votes shall be directors. Section 3. TERM OF OFFICE. The term of office for each director shall be three years and the members of one class of directors shall be elected annually to serve for such term; except that, initially or whenever necessary, a director may be elected for a shorter term in order to provide for a proper rotation of directors. At the 1997 Annual Meeting of Shareholders, Class I directors shall be elected for a term expiring at the 1998 Annual Meeting of Shareholders, Class II directors shall be elected for a term expiring at the 1999 Annual Meeting of Shareholders and Class III directors shall be elected for a term expiring at the 2000 Annual Meeting of Shareholders. Each director shall hold office until the annual meeting of shareholders coinciding with the termination of the term of the class of directors to which he or she was elected and until his or her successor shall be elected and qualified or until his or her earlier resignation, removal from office or death. Section 4. REMOVAL. All directors, or all directors of a particular class, or any individual director may be removed from office, without assigning any cause, by the affirmative vote of the holders of record of shares representing 75% of the voting power of the corporation with respect to the election of directors, provided that unless all the directors, or all the directors of a particular class, are removed, no individual director shall be removed if the votes of a sufficient number of shares are cast against his or her removal which, if cumulatively voted at an election of all the directors, or all the directors of a particular class, as the case may be, would be sufficient to elect at least one director. In case of any such removal, a new director may be elected at the same meeting for the unexpired term of each director removed. 3 Section 5. VACANCIES. Vacancies in the board of directors may be filled for the remainder of the unexpired term by a majority vote of the remaining directors. The directors appointed to fill such vacancies shall be assigned to such class or classes as the directors then in office shall determine, provided that the directors shall be distributed among the several classes as nearly equally as possible. Any director appointed to fill a vacancy in the board shall serve until the expiration of the term of the class of directors to which he or she has been appointed and until his or her successor shall be elected and qualified. Section 6. QUORUM AND TRANSACTION OF BUSINESS. A majority of the whole authorized number of directors shall constitute a quorum for the transaction of business, except that a majority of the directors in office shall constitute a quorum for filling a vacancy on the board. Whenever less than a quorum is present at the time and place appointed for any meeting of the board, a majority of those present may adjourn the meeting from time to time, until a quorum shall be present. The act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the board. Section 7. ANNUAL MEETING. Annual meetings of the board of directors shall be held immediately following annual meetings of the shareholders, or as soon thereafter as is practicable. If no annual meeting of the shareholders is held, or if directors are not elected thereat, then the annual meeting of the board of directors shall be held immediately following any special meeting of the shareholders at which directors are elected, or as soon thereafter as is practicable. If such annual meeting of directors is held immediately following a meeting of the shareholders, it shall be held at the same place at which such meeting of shareholders was held. Section 8. REGULAR MEETINGS. Regular meetings of the board of directors shall be held at such times and places, within or without the State of Ohio, as the board of directors may, by resolution or by-law, from time to time, determine. The secretary shall give notice of each such resolution or bylaw to any director who was not present at the time the same was adopted, but no further notice of such regular meeting need be given. Section 9. SPECIAL MEETINGS. Special meetings of the board of directors may be called by the chairman of the board or the president to be held at such times and places within or without the State of Ohio as the person calling such meeting shall specify. In addition, any two members of the board of directors may call special meetings of the board of directors to be held at the principal office of the corporation at such times as they may specify. Section 10. NOTICE OF ANNUAL OR SPECIAL MEETINGS. Notice of the time and place of each annual or special meeting shall be given to each director by the secretary or by the person or persons calling such meeting. Such notice need not specify the purpose or purposes of the meeting and may be given in any manner or method and at such time so that the director receiving it may have reasonable opportunity to attend the meeting. Such notice shall, in all events, be deemed to have been properly and duly given if mailed at least forty-eight (48) hours prior to the meeting and directed to the residence of each director as shown upon the secretary's records. The giving of notice shall be deemed to have been waived by any director who shall attend and participate in such meeting and may be waived, in a writing, by any director either before or after 4 such meeting. Section 11. COMPENSATION. The directors, as such, shall be entitled to receive such reasonable compensation for their services as may be fixed from time to time by resolution of the board, and expenses of attendance, if any, may be allowed for attendance of each annual, regular or special meeting of the board. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of the executive committee or of any standing or special committee may by resolution of the board be allowed such compensation for their services as the board may deem reasonable, and additional compensation may be allowed to directors for special services rendered. Section 12. BY-LAWS. For the government of its actions, the board of directors may adopt by-laws consistent with the Articles of Incorporation and these Regulations. Section 13. NOTIFICATION OF NOMINATIONS. Subject to the rights of the holders of any class or series of stock of the corporation having a preference over the Common Shares as to dividends or upon liquidation to elect directors under specified circumstances, nominations for the election of directors may be made only by the Board of Directors or a committee of the Board of Directors or, subject to this Section 13, by any shareholder of record entitled to vote in the election of directors generally. A shareholder of record entitled to vote in the election of directors generally may nominate one or more persons for election as directors at a meeting of shareholders only if written notice of such shareholder's intent to make such nomination or nominations has been given, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the corporation and has been received by the Secretary of the corporation on or before the following dates, as applicable: (i) with respect to an election to be held at an annual meeting of shareholders, 60 days in advance of such meeting, or (ii) with respect to an election to be held at a special meeting of shareholders, the close of business on the tenth day following the date on which notice of such meeting is first given to shareholders. For purposes of this Section 13, notice shall be deemed to be first given to shareholders when disclosure of such date is first made in a press release reported by the Dow Jones News Services, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended. Each such notice shall set forth: (a) the name and address of the shareholder who intends to make the nomination or nominations; (b) a representation that the shareholder is a holder of record of shares of the corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (c) the name, address and principal occupation or employment of each person to be so nominated; 5 (d) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder; and (e) such other information regarding each nominee proposed by such shareholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission, as then in effect, had the nominee been nominated, or intended to be nominated, by the Board of Directors. To be effective, each notice of intent to make a nomination given hereunder must be accompanied by the written consent of each such nominee to serve as a director of the corporation if elected. The presiding officer at the meeting may refuse to acknowledge the nomination of any person or persons not made in compliance with the provisions hereof and may declare at such meeting that any such nomination was not properly brought before the meeting and shall not be considered. ARTICLE III COMMITTEES Section 1. EXECUTIVE COMMITTEE. The board of directors may from time to time, by resolution passed by a majority of the whole board, create an executive committee of three or more directors, the members of which shall be elected by the board of directors to serve during the pleasure of the board. If the board of directors does not designate a chairman of the executive committee, the executive committee shall elect a chairman from its own number. Except as otherwise provided herein and in the resolution creating an executive committee, such committee shall, during the intervals between the meetings of the board of directors, possess and may exercise all of the powers of the board of directors in the management of the business and affairs of the corporation, other than that of filling vacancies among the directors or in any committee of the directors. The executive committee shall keep full records and accounts of its proceedings and transactions. All action by the executive committee shall be reported to the board of directors at its meeting next succeeding such action and shall be subject to control, revision and alteration by the board of directors, provided that no rights of third persons shall be prejudicially affected thereby. Vacancies in the executive committee shall be filled by the directors, and the directors may appoint one or more directors as alternate members of the committee who may take the place of any absent member or members at any meeting. Section 2. MEETINGS OF EXECUTIVE COMMITTEE. Subject to the provisions of these Regulations, the executive committee shall fix its own rules of procedure and shall meet as provided by such rules or by resolutions of the board of directors, and it shall also meet at the call of the president, the chairman of the executive committee or any two members of the committee. Unless otherwise provided by such rules or by such resolutions, the provisions of Section 10 of Article II relating to the notice required to be given of meetings of the board of directors shall also 6 apply to meetings of the executive committee. A majority of the executive committee shall be necessary to constitute a quorum. The executive committee may act in a writing, or by telephone with written confirmation, without a meeting, but no such action of the executive committee shall be effective unless concurred in by all members of the committee. Section 3. OTHER COMMITTEES. The board of directors may by resolution provide for such other standing or special committees as it deems desirable, and discontinue the same at pleasure. Each such committee shall have such powers and perform such duties, not inconsistent with law, as may be delegated to it by the board of directors. The provisions of Section 1 and Section 2 of this Article shall govern the appointment and action of such committees so far as consistent, unless otherwise provided by the board of directors. Vacancies in such committees shall be filled by the board of directors or as the board of directors may provide. ARTICLE IV OFFICERS Section 1. GENERAL PROVISIONS. The board of directors shall elect a president, such number of vice presidents as the board may from time to time determine, a secretary and a treasurer and, in its discretion, a chairman of the board of directors. The board of directors may from time to time create such offices and appoint such other officers, subordinate officers and assistant officers as it may determine. The president, any vice president who succeeds to the office of the president, and the chairman of the board shall be, but the other officers need not be, chosen from among the members of the board of directors. Any two of such offices, other than that of president and vice president, may be held by the same person, but no officer shall execute, acknowledge or verify any instrument in more than one capacity. Section 2. TERM OF OFFICE. The officers of the corporation shall hold office during the pleasure of the board of directors, and, unless sooner removed by the board of directors, until the organization meeting of the board of directors following the date of their election and until their successors are chosen and qualified. The board of directors may remove any officer at any time, with or without cause. A vacancy in any office, however created, shall be filled by the board of directors. ARTICLE V DUTIES OF OFFICERS Section 1. CHAIRMAN OF THE BOARD. The chairman of the board, if one be elected, shall preside at all meetings of the board of directors and shall have such other powers and duties as may be prescribed by the board of directors. Section 2. PRESIDENT. The president shall be the chief executive officer of the corporation and shall exercise supervision over the business of the corporation and over its several officers, 7 subject, however, to the control of the board of directors. He shall preside at all meetings of shareholders, and, in the absence of the chairman of the board, or if a chairman of the board shall not have been elected, shall also preside at meetings of the board of directors. He shall have authority to sign all certificates for shares and all deeds, mortgages, bonds, agreements, notes, and other instruments requiring his signature; and shall have all the powers and duties prescribed by Chapter 1701 of the Revised Code of Ohio and such others as the board of directors may from time to time assign to him. Section 3. VICE PRESIDENTS. The vice presidents shall have such powers and duties as may from time to time be assigned to them by the board of directors or the president. At the request of the president, or in the case of his absence or disability, the vice president designated by the president (or in the absence of such designation, the vice president designated by the board) shall perform all the duties of the president and, when so acting, shall have all the powers of the president. The authority of vice presidents to sign in the name of the corporation certificates for shares and deeds, mortgages, bonds, agreements, notes and other instruments shall be coordinate with like authority of the president. Section 4. SECRETARY. The secretary shall keep minutes of all the proceedings of the shareholders and board of directors and shall make proper record of the same, which shall be attested by him; shall have authority to sign all certificates for shares and all deeds, mortgages, bonds, agreements, notes, and other instruments executed by the corporation requiring his signature; shall give notice of meetings of shareholders and directors; shall produce on request at each meeting of shareholders a certified list of shareholders arranged in alphabetical order; shall keep such books as may be required by the board of directors; and shall have such other powers and duties as may from time to time be assigned to him by the board of directors or the president. Section 5. TREASURER. The treasurer shall have general supervision of all finances; he shall receive and have in charge all money, bills, notes, deeds, leases, mortgages and similar property belonging to the corporation, and shall do with the same as may from time to time be required by the board of directors. He shall cause to be kept adequate and correct accounts of the business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, stated capital and shares, together with such other accounts as may be required, and upon the expiration of his term of office shall turn over to his successor or to the board of directors all property, books, papers and money of the corporation in his hands; and shall have such other powers and duties as may from time to time be assigned to him by the board of directors or the president. Section 6. ASSISTANT AND SUBORDINATE OFFICERS. The board of directors may appoint such assistant and subordinate officers as it may deem desirable. Each such officer shall hold office during the pleasure of the board of directors, and perform such duties as the board of directors or the president may prescribe. The board of directors may, from time to time, authorize any officer to appoint and remove subordinate officers, to prescribe their authority and duties, and to fix their compensation. 8 Section 7. DUTIES OF OFFICERS MAY BE DELEGATED. In the absence of any officer of the corporation, or for any other reason the board of directors may deem sufficient, the board of directors may delegate, for the time being, the powers or duties, or any of them, of such officers to any other officer or to any director. ARTICLE VI INDEMNIFICATION AND INSURANCE Section 1. INDEMNIFICATION. The corporation shall indemnify each director, officer and employee and each former director, officer and employee of the corporation, and each person who is serving or has served at its request as a director, officer or employee of another corporation, against expenses, judgements, decrees, fines, penalties or amounts paid in settlement in connection with the defense of any past, pending or threatened action, suit or proceeding, criminal or civil, to which he was, is or may be made a party by reason of being or having been such director, officer or employee, provided a determination is made (i) by the directors of the corporation acting at a meeting at which a quorum consisting of directors who neither were nor are parties to or threatened with any such action, suit or proceeding is present, or (ii) by the shareholders of the corporation at a meeting held for such purpose by the affirmative vote of the holders of shares entitling them to exercise a majority of the voting power of the corporation on such proposal or without a meeting by the written consent of the holders of shares entitling them to exercise two-thirds of the voting power on such proposal, that (a) such director, officer or employee was not, and has not been adjudicated to have been, negligent or guilty of misconduct in the performance of his duty to the corporation of which he is or was a director, officer or employee, (b) he acted in good faith in what he reasonably believed to be the best interest of such corporation, and (c) in any matter the subject of a criminal action, suit or proceeding, he had no reasonable cause to believe that his conduct was unlawful. Expenses of each person indemnified hereunder incurred in defending a civil, criminal, administrative or investigative action, suit or proceeding (including all appeals) or threat thereof, may be paid by the corporation in advance of the final disposition of such action, suit or proceeding as authorized by the board of directors, whether a disinterested quorum exists or not, upon receipt of an undertaking by or on behalf of the director, officer or employee to repay such expenses unless it shall ultimately be determined that he is entitled to be indemnified by the corporation. The foregoing rights of indemnification shall not be deemed exclusive of, or in any way to limit, any other rights to which any person indemnified may be, or may become, entitled apart from the provisions of this Article VI. Section 2. LIABILITY INSURANCE. The corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or designated agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or designated agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out 9 of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this Article or of Chapter 1701 of the Ohio Revised Code. ARTICLE VII CERTIFICATES FOR SHARES Section 1. FORM AND EXECUTION. Certificates for shares, certifying the number of full-paid shares owned, shall be issued to each shareholder in such form as shall be approved by the board of directors. Such certificates shall be signed by the president or a vice president and by the secretary or an assistant secretary or the treasurer or an assistant treasurer; provided however, that if such certificates are countersigned by a transfer agent and/or registrar the signatures of any of said officers and the seal of the corporation upon such certificates may be facsimiles, engraved, stamped or printed. If any officer or officers, who shall have signed, or whose facsimile signature shall have been used, printed or stamped on any certificate or certificates for shares, shall cease to be such officer or officers, because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the corporation, such certificate or certificates, if authenticated by the endorsement thereon of the signature of a transfer agent or registrar, shall nevertheless be conclusively deemed to have been adopted by the corporation by the use and delivery thereof and shall be as effective in all respects as though signed by a duly elected, qualified and authorized officer or officers, and as though the person or persons who signed such certificate or certificates, or whose facsimile signature or signatures shall have been used thereon, had not ceased to be an officer or officers of the corporation. Section 2. REGISTRATION OF TRANSFER. Any certificate for shares of the corporation shall be transferable in person or by attorney upon the surrender thereof to the corporation or any transfer agent therefor (for the class of shares represented by the certificate surrendered of a certificate), properly endorsed for transfer and accompanied by such assurances as the corporation or such transfer agent may require as to the genuineness and effectiveness of each necessary endorsement. Section 3. LOST, DESTROYED OR STOLEN CERTIFICATES. A new share certificate or certificates may be issued in place of any certificate theretofore issued by the corporation which is alleged to have been lost, destroyed or wrongfully taken upon (i) the execution and delivery to the corporation by the person claiming the certificate to have been lost, destroyed or wrongfully taken of an affidavit of that fact, specifying whether or not, at the time of such alleged loss, destruction or taking, the certificate was endorsed, and (ii) the furnishing to the corporation of indemnity and other assurances satisfactory to the corporation and to all transfer agents and registrars of the class of shares represented by the certificate against any and all losses, damages, costs, expenses or liabilities to which they or any of them may be subjected by reason of the issue and delivery of such new certificate or certificates or in respect of the original certificate. Section 4. REGISTERED SHAREHOLDERS. A person in whose name shares are of record on the books of the corporation shall conclusively be deemed the unqualified owner and holder thereof for all purposes and to have capacity to exercise all rights of ownership. Neither the corporation 10 nor any transfer agent of the corporation shall be bound to recognize any equitable interest in or claim to such shares on the part of any other person, whether disclosed upon such certificate or otherwise, nor shall they be obliged to see to the execution of any trust or obligation. ARTICLE VIII FISCAL YEAR The fiscal year of the corporation shall end on the 31st day of December in each year, or on such other date as may be fixed from time to time by the board of directors. ARTICLE IX SEAL The board of directors may provide a suitable seal containing the name of the corporation. If deemed advisable by the board of directors, duplicate seals may be provided and kept for the purposes of the corporation. ARTICLE X AMENDMENTS These Regulations may be amended or repealed at any meeting of shareholders called for that purpose by the affirmative vote of the holders of record of shares entitling them to exercise a majority of the voting power of the corporation with respect to such proposal, except that the affirmative vote of the holders of record of shares representing 75% of the voting power of the corporation with respect to any such proposal shall be required to amend, alter, change or repeal Sections 1, 3, 4, 5 or 13 of Article II or this Article X. 11 EX-5 8 l00196aexv5.txt EX-5 OPINION OF BAKER & HOSTETLER Exhibit 5 April 21, 2003 The Progressive Corporation 6300 Wilson Mills Road Mayfield Village, OH 44143 Re: Common Shares issuable under The Progressive Corporation 2003 Incentive Plan Gentlemen: We have acted as counsel to The Progressive Corporation, an Ohio corporation (the "Company"), in connection with its Registration Statement on Form S-8 (the "Registration Statement") filed under the Securities Act of 1933, as amended, relating to the offering of up to 5,000,000 Common Shares, $1.00 par value (the "Common Shares"), of the Company pursuant to the Company's 2003 Incentive Plan (the "Plan"). In connection with the foregoing, we have examined (a) the Amended Articles of Incorporation, as amended, and the Code of Regulations of the Company, (b) the Plan, and (c) such records of the corporate proceedings of the Company and such other documents as we deem necessary to render this opinion. Based on such examination, we are of the opinion that: 1. The Company is a corporation duly organized and validly existing under the laws of the State of Ohio. 2. The Common Shares available for issuance under the Plan, when issued and sold pursuant to the Plan, will be legally issued, fully paid and nonassessable. We hereby consent to the filing of this opinion as Exhibit 5 to the Registration Statement. Very truly yours, Baker & Hostetler LLP EX-23.A 9 l00196aexv23wa.txt EX-23(A) CONSENT OF PWC Exhibit 23(a) CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this Registration Statement on Form S-8 of our report dated January 22, 2003 relating to the consolidated financial statements, which appear in the 2002 Annual Report to Shareholders of The Progressive Corporation (the "Company"), which is included as an Appendix to the Company's 2003 Proxy Statement, which report and consolidated financial statements are incorporated by reference in the Annual Report on Form 10-K. We also consent to the incorporation by reference of our report dated January 22, 2003 relating to the financial statement schedules, which appear in such Annual Report on Form 10-K. /s/ PRICEWATERHOUSECOOPERS, L.L.P. Cleveland, Ohio April 21, 2003 EX-24.A 10 l00196aexv24wa.txt EX-24(A) POWER OF ATTORNEY Exhibit 24(a) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer of The Progressive Corporation, an Ohio corporation (the "Company"), has made, constituted and appointed, and by this instrument does make, constitute and appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M. Coffey, and each of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to affix for him and in his name, place and stead, in any and all capacities, as attorney-in-fact and agent, his signature to a Registration Statement on Form S-8 or other form in order to register under the Securities Act of 1933, as amended, up to 5,000,000 of the Company's Common Shares, $1.00 par value, issuable under The Progressive Corporation 2003 Incentive Plan, and to any and all amendments, post-effective amendments and exhibits to such Registration Statement, and to any and all applications, instruments and other documents pertaining thereto, giving and granting unto each such attorney-in-fact and agent full power and authority to do and perform any and all acts and things whatsoever necessary or appropriate to be done in and about the premises, as fully for all intents and purposes as he might or could do if personally present, and hereby ratifying and confirming all that each such attorney-in-fact and agent, or any such substitute or substitutes, shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, this Power of Attorney has been signed in the capacities and on the date indicated below. Date: April 7, 2003 /s/ Jeffrey W. Basch ----------------------- Jeffrey W. Basch Vice President and Chief Accounting Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer of The Progressive Corporation, an Ohio corporation (the "Company"), has made, constituted and appointed, and by this instrument does make, constitute and appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M. Coffey, and each of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to affix for him and in his name, place and stead, in any and all capacities, as attorney-in-fact and agent, his signature to a Registration Statement on Form S-8 or other form in order to register under the Securities Act of 1933, as amended, up to 5,000,000 of the Company's Common Shares, $1.00 par value, issuable under The Progressive Corporation 2003 Incentive Plan, and to any and all amendments, post-effective amendments and exhibits to such Registration Statement, and to any and all applications, instruments and other documents pertaining thereto, giving and granting unto each such attorney-in-fact and agent full power and authority to do and perform any and all acts and things whatsoever necessary or appropriate to be done in and about the premises, as fully for all intents and purposes as he might or could do if personally present, and hereby ratifying and confirming all that each such attorney-in-fact and agent, or any such substitute or substitutes, shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, this Power of Attorney has been signed in the capacities and on the date indicated below. Date: April 7, 2003 /s/ W. Thomas Forrester ------------------------------------- W. Thomas Forrester Vice President and Chief Financial Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer and director of The Progressive Corporation, an Ohio corporation (the "Company"), has made, constituted and appointed, and by this instrument does make, constitute and appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M. Coffey, and each of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to affix for him and in his name, place and stead, in any and all capacities, as attorney-in-fact and agent, his signature to a Registration Statement on Form S-8 or other form in order to register under the Securities Act of 1933, as amended, up to 5,000,000 of the Company's Common Shares, $1.00 par value, issuable under The Progressive Corporation 2003 Incentive Plan, and to any and all amendments, post-effective amendments and exhibits to such Registration Statement, and to any and all applications, instruments and other documents pertaining thereto, giving and granting unto each such attorney-in-fact and agent full power and authority to do and perform any and all acts and things whatsoever necessary or appropriate to be done in and about the premises, as fully for all intents and purposes as he might or could do if personally present, and hereby ratifying and confirming all that each such attorney-in-fact and agent, or any such substitute or substitutes, shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, this Power of Attorney has been signed in the capacities and on the date indicated below. Date: April 7, 2003 /s/ Glenn M. Renwick ----------------------------- Glenn M. Renwick Director, Chief Executive Officer and President POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The Progressive Corporation, an Ohio corporation (the "Company"), has made, constituted and appointed, and by this instrument does make, constitute and appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M. Coffey, and each of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to affix for him and in his name, place and stead, in any and all capacities, as attorney-in-fact and agent, his signature to a Registration Statement on Form S-8 or other form in order to register under the Securities Act of 1933, as amended, up to 5,000,000 of the Company's Common Shares, $1.00 par value, issuable under The Progressive Corporation 2003 Incentive Plan, and to any and all amendments, post-effective amendments and exhibits to such Registration Statement, and to any and all applications, instruments and other documents pertaining thereto, giving and granting unto each such attorney-in-fact and agent full power and authority to do and perform any and all acts and things whatsoever necessary or appropriate to be done in and about the premises, as fully for all intents and purposes as he might or could do if personally present, and hereby ratifying and confirming all that each such attorney-in-fact and agent, or any such substitute or substitutes, shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, this Power of Attorney has been signed in the capacities and on the date indicated below. Date: April 4, 2003 /s/ Milton N. Allen ---------------------------- Milton N. Allen Director POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The Progressive Corporation, an Ohio corporation (the "Company"), has made, constituted and appointed, and by this instrument does make, constitute and appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M. Coffey, and each of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to affix for him and in his name, place and stead, in any and all capacities, as attorney-in-fact and agent, his signature to a Registration Statement on Form S-8 or other form in order to register under the Securities Act of 1933, as amended, up to 5,000,000 of the Company's Common Shares, $1.00 par value, issuable under The Progressive Corporation 2003 Incentive Plan, and to any and all amendments, post-effective amendments and exhibits to such Registration Statement, and to any and all applications, instruments and other documents pertaining thereto, giving and granting unto each such attorney-in-fact and agent full power and authority to do and perform any and all acts and things whatsoever necessary or appropriate to be done in and about the premises, as fully for all intents and purposes as he might or could do if personally present, and hereby ratifying and confirming all that each such attorney-in-fact and agent, or any such substitute or substitutes, shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, this Power of Attorney has been signed in the capacities and on the date indicated below. Date: April 7, 2003 /s/ B. Charles Ames -------------------- B. Charles Ames Director POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The Progressive Corporation, an Ohio corporation (the "Company"), has made, constituted and appointed, and by this instrument does make, constitute and appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M. Coffey, and each of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to affix for him and in his name, place and stead, in any and all capacities, as attorney-in-fact and agent, his signature to a Registration Statement on Form S-8 or other form in order to register under the Securities Act of 1933, as amended, up to 5,000,000 of the Company's Common Shares, $1.00 par value, issuable under The Progressive Corporation 2003 Incentive Plan, and to any and all amendments, post-effective amendments and exhibits to such Registration Statement, and to any and all applications, instruments and other documents pertaining thereto, giving and granting unto each such attorney-in-fact and agent full power and authority to do and perform any and all acts and things whatsoever necessary or appropriate to be done in and about the premises, as fully for all intents and purposes as he might or could do if personally present, and hereby ratifying and confirming all that each such attorney-in-fact and agent, or any such substitute or substitutes, shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, this Power of Attorney has been signed in the capacities and on the date indicated below. Date: April 7, 2003 /s/ Charles A. Davis --------------------- Charles A. Davis Director POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The Progressive Corporation, an Ohio corporation (the "Company"), has made, constituted and appointed, and by this instrument does make, constitute and appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M. Coffey, and each of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to affix for him and in his name, place and stead, in any and all capacities, as attorney-in-fact and agent, his signature to a Registration Statement on Form S-8 or other form in order to register under the Securities Act of 1933, as amended, up to 5,000,000 of the Company's Common Shares, $1.00 par value, issuable under The Progressive Corporation 2003 Incentive Plan, and to any and all amendments, post-effective amendments and exhibits to such Registration Statement, and to any and all applications, instruments and other documents pertaining thereto, giving and granting unto each such attorney-in-fact and agent full power and authority to do and perform any and all acts and things whatsoever necessary or appropriate to be done in and about the premises, as fully for all intents and purposes as he might or could do if personally present, and hereby ratifying and confirming all that each such attorney-in-fact and agent, or any such substitute or substitutes, shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, this Power of Attorney has been signed in the capacities and on the date indicated below. Date: April 4, 2003 /s/ Stephen R. Hardis --------------------- Stephen R. Hardis Director POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The Progressive Corporation, an Ohio corporation (the "Company"), has made, constituted and appointed, and by this instrument does make, constitute and appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M. Coffey, and each of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to affix for him and in his name, place and stead, in any and all capacities, as attorney-in-fact and agent, his signature to a Registration Statement on Form S-8 or other form in order to register under the Securities Act of 1933, as amended, up to 5,000,000 of the Company's Common Shares, $1.00 par value, issuable under The Progressive Corporation 2003 Incentive Plan, and to any and all amendments, post-effective amendments and exhibits to such Registration Statement, and to any and all applications, instruments and other documents pertaining thereto, giving and granting unto each such attorney-in-fact and agent full power and authority to do and perform any and all acts and things whatsoever necessary or appropriate to be done in and about the premises, as fully for all intents and purposes as he might or could do if personally present, and hereby ratifying and confirming all that each such attorney-in-fact and agent, or any such substitute or substitutes, shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, this Power of Attorney has been signed in the capacities and on the date indicated below. Date: April 6, 2003 /s/ Bernadine P. Healy ---------------------- Bernadine P. Healy Director POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The Progressive Corporation, an Ohio corporation (the "Company"), has made, constituted and appointed, and by this instrument does make, constitute and appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M. Coffey, and each of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to affix for him and in his name, place and stead, in any and all capacities, as attorney-in-fact and agent, his signature to a Registration Statement on Form S-8 or other form in order to register under the Securities Act of 1933, as amended, up to 5,000,000 of the Company's Common Shares, $1.00 par value, issuable under The Progressive Corporation 2003 Incentive Plan, and to any and all amendments, post-effective amendments and exhibits to such Registration Statement, and to any and all applications, instruments and other documents pertaining thereto, giving and granting unto each such attorney-in-fact and agent full power and authority to do and perform any and all acts and things whatsoever necessary or appropriate to be done in and about the premises, as fully for all intents and purposes as he might or could do if personally present, and hereby ratifying and confirming all that each such attorney-in-fact and agent, or any such substitute or substitutes, shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, this Power of Attorney has been signed in the capacities and on the date indicated below. Date: April 7, 2003 /s/ Jeffrey D. Kelly -------------------- Jeffrey D. Kelly Director POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The Progressive Corporation, an Ohio corporation (the "Company"), has made, constituted and appointed, and by this instrument does make, constitute and appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M. Coffey, and each of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to affix for him and in his name, place and stead, in any and all capacities, as attorney-in-fact and agent, his signature to a Registration Statement on Form S-8 or other form in order to register under the Securities Act of 1933, as amended, up to 5,000,000 of the Company's Common Shares, $1.00 par value, issuable under The Progressive Corporation 2003 Incentive Plan, and to any and all amendments, post-effective amendments and exhibits to such Registration Statement, and to any and all applications, instruments and other documents pertaining thereto, giving and granting unto each such attorney-in-fact and agent full power and authority to do and perform any and all acts and things whatsoever necessary or appropriate to be done in and about the premises, as fully for all intents and purposes as he might or could do if personally present, and hereby ratifying and confirming all that each such attorney-in-fact and agent, or any such substitute or substitutes, shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, this Power of Attorney has been signed in the capacities and on the date indicated below. Date: April 4, 2003 /s/ Philip A. Laskawy ------------------------------------ Philip A. Laskawy Director POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer and director of The Progressive Corporation, an Ohio corporation (the "Company"), has made, constituted and appointed, and by this instrument does make, constitute and appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M. Coffey, and each of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to affix for him and in his name, place and stead, in any and all capacities, as attorney-in-fact and agent, his signature to a Registration Statement on Form S-8 or other form in order to register under the Securities Act of 1933, as amended, up to 5,000,000 of the Company's Common Shares, $1.00 par value, issuable under The Progressive Corporation 2003 Incentive Plan, and to any and all amendments, post-effective amendments and exhibits to such Registration Statement, and to any and all applications, instruments and other documents pertaining thereto, giving and granting unto each such attorney-in-fact and agent full power and authority to do and perform any and all acts and things whatsoever necessary or appropriate to be done in and about the premises, as fully for all intents and purposes as he might or could do if personally present, and hereby ratifying and confirming all that each such attorney-in-fact and agent, or any such substitute or substitutes, shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, this Power of Attorney has been signed in the capacities and on the date indicated below. Date: April 7, 2003 /s/ Peter B. Lewis ------------------ Peter B. Lewis Chairman of the Board and Director POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The Progressive Corporation, an Ohio corporation (the "Company"), has made, constituted and appointed, and by this instrument does make, constitute and appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M. Coffey, and each of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to affix for him and in his name, place and stead, in any and all capacities, as attorney-in-fact and agent, his signature to a Registration Statement on Form S-8 or other form in order to register under the Securities Act of 1933, as amended, up to 5,000,000 of the Company's Common Shares, $1.00 par value, issuable under The Progressive Corporation 2003 Incentive Plan, and to any and all amendments, post-effective amendments and exhibits to such Registration Statement, and to any and all applications, instruments and other documents pertaining thereto, giving and granting unto each such attorney-in-fact and agent full power and authority to do and perform any and all acts and things whatsoever necessary or appropriate to be done in and about the premises, as fully for all intents and purposes as he might or could do if personally present, and hereby ratifying and confirming all that each such attorney-in-fact and agent, or any such substitute or substitutes, shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, this Power of Attorney has been signed in the capacities and on the date indicated below. Date: April 7, 2003 /s/ Norman S. Matthews ------------------------ Norman S. Matthews Director POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The Progressive Corporation, an Ohio corporation (the "Company"), has made, constituted and appointed, and by this instrument does make, constitute and appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M. Coffey, and each of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to affix for him and in his name, place and stead, in any and all capacities, as attorney-in-fact and agent, his signature to a Registration Statement on Form S-8 or other form in order to register under the Securities Act of 1933, as amended, up to 5,000,000 of the Company's Common Shares, $1.00 par value, issuable under The Progressive Corporation 2003 Incentive Plan, and to any and all amendments, post-effective amendments and exhibits to such Registration Statement, and to any and all applications, instruments and other documents pertaining thereto, giving and granting unto each such attorney-in-fact and agent full power and authority to do and perform any and all acts and things whatsoever necessary or appropriate to be done in and about the premises, as fully for all intents and purposes as he might or could do if personally present, and hereby ratifying and confirming all that each such attorney-in-fact and agent, or any such substitute or substitutes, shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, this Power of Attorney has been signed in the capacities and on the date indicated below. Date: April 6, 2003 /s/ Donald B. Shackelford ------------------------- Donald B. Shackelford Director EX-24.B 11 l00196aexv24wb.txt EX-24(B) CERTIFIED COPY OF RESOLUTIONS Exhibit 24(b) THE PROGRESSIVE CORPORATION 2003 INCENTIVE PLAN CERTIFIED COPY OF RESOLUTIONS RESOLVED, that The Progressive Corporation (the "Company") hereby approves and adopts The Progressive Corporation 2003 Incentive Plan, in form attached hereto as Exhibit A (the "Plan"), subject to approval by the holders of the Company's Common Shares, $1 par value ("Shareholders"); and FURTHER RESOLVED, that the Plan be submitted to the Shareholders for approval at the 2003 Annual Meeting of Shareholders; and FURTHER RESOLVED, that the Company reserve 5,000,000 Common Shares for issuance pursuant to Restricted Stock or Stock Option awards which may hereafter be granted under the Plan, which amount may be further increased by the Board of Directors, from time to time, in its sole discretion, subject to any necessary approval by Shareholders; and FURTHER RESOLVED, that the President, any Vice President, the Treasurer and the Secretary of the Company be, and each of them with full power to act without the others is, hereby authorized and directed to prepare, or cause to be prepared, and to execute and file or cause to be executed and filed with the Securities and Exchange Commission (the "Commission"), under the Securities Act of 1933, as amended (the "Act"), for and on behalf of the Company, a Registration Statement on Form S-8 (which, together with the related Prospectus and all exhibits and other documents relating thereto, is herein referred to as the "Registration Statement") with respect to the registration of the additional Common Shares of the Company hereinabove authorized for issuance under the Plan and any related derivative or other securities (including, without limitation, Restricted Stock and Stock Options) (the "Plan Securities"), with such changes (including, but not limited to, changes of a substantive nature) as any such officer or officers shall approve, which approval shall be shown conclusively by the execution of the Registration Statement by or on behalf of any such officer or officers; and FURTHER RESOLVED, that the President, any Vice President, the Treasurer and the Secretary of the Company be, and each of them with full power to act without the others is, hereby authorized and empowered, for and on behalf of the Company, to prepare or cause to be prepared and to execute such amendments and supplements to the Registration Statement as they, or any of them, may deem necessary or desirable, or as may be required by the Commission; to cause such amendments and supplements, when duly executed (if required), to be filed with the Commission; and to do all such other acts and things and to execute all such other documents as they, or any of them, deem necessary or desirable in order to cause the Registration Statement to comply with the Act and the rules and regulations promulgated by the 1 Commission pursuant thereto (the "Rules and Regulations"), and to become effective under the Act and the Rules and Regulations; and FURTHER RESOLVED, that when the Registration Statement has become effective, the President, any Vice President, the Treasurer and the Secretary of the Company be, and each of them with full power to act without the others is, hereby authorized and empowered, for and on behalf of the Company, to execute and deliver any and all instruments, certificates and/or other documents, and to do any and all acts and things, as may be necessary or appropriate in connection with the issuance of Plan Securities under the Plan; and FURTHER RESOLVED, that Charles E. Jarrett, or such other individual as the Compensation Committee of the Board of Directors may designate in his stead, is hereby named as the person authorized to receive service of all notices, orders, communications and other documents which may be issued or sent by the Commission in connection with the Registration Statement and any and all amendments and supplements thereto, with all the powers consequent upon such designation under the Rules and Regulations; and FURTHER RESOLVED, that any director or officer of the Company required by law to affix his or her signature to the Registration Statement and any and all amendments and supplements thereto may affix his or her signature personally, or by any attorney-in-fact, duly constituted in writing by said director or officer to sign his or her name thereto; and FURTHER RESOLVED, that Jeffrey W. Basch, David M. Coffey, W. Thomas Forrester, Charles E. Jarrett, Dane A. Shrallow and Glenn M. Renwick be, and each of them hereby is, appointed as the attorney-in-fact and agent of the Company, with full power of substitution and resubstitution, for and in the name, place and stead of the Company, to sign, attest and file the Registration Statement, and any and all amendments or supplements to the Registration Statement and any and all applications or other documents to be filed with the Commission and any and all applications or other documents to be filed with any governmental or private agency or official relative to the issuance of the Plan Securities, with full power and authority to do and perform any and all acts and things whatsoever requisite and necessary to be done in the premises, hereby ratifying and approving the acts of such attorneys-in-fact or any such substitute or substitutes and, without implied limitation, including in the above the authority to do the foregoing things on behalf of the Company in the name of the person so acting or on behalf and in the name of any duly authorized officer of the Company; and the President, any Vice President, the Treasurer and the Secretary be, and each hereby is, authorized and empowered for and on behalf of the Company to execute a Power of Attorney evidencing the foregoing appointment; and FURTHER RESOLVED, that Jeffrey W. Basch, David M. Coffey, W. Thomas Forrester, Charles E. Jarrett, Glenn M. Renwick and Dane A. Shrallow be, and each of them with full power to act without the others is, hereby authorized and empowered to sign the Registration Statement and any and all amendments and supplements to the Registration Statement, on behalf of and as attorneys-in-fact for the principal executive officer, principal accounting officer, 2 principal financial officer or any other officer of the Company, including, without limitation, the President, any Vice President, the Treasurer and the Secretary, and on behalf of and as attorneys for each director of the Company; and FURTHER RESOLVED, that each of the officers of the Company and its attorneys, Messrs. David M. Coffey, Suzanne M. Hanselman, R. Steven Kestner, Charles E. Jarrett and Dane A. Shrallow, be, and each of them with full power to act without the others is, hereby authorized and empowered to appear on behalf of the Company before the Commission in connection with any and all matters relating to the Registration Statement and all amendments and supplements thereto; and FURTHER RESOLVED, that the President, any Vice President, the Treasurer and the Secretary of the Company be, and each of them with full power to act without the others is, hereby authorized and empowered, in the name and on behalf of the Company, to take any and all action which they, or any of them, deem necessary or advisable in order to obtain a permit to issue Plan Securities, or to register or qualify the Plan Securities for issuance, or to request an exemption from registration of the Plan Securities, or to register or obtain a license for the Company as a dealer or broker, under the securities laws of such states of the United States of America and of such foreign jurisdictions as any such officer or officers may deem advisable, and in connection with such registrations, permits, licenses, qualifications and exemptions to execute, acknowledge, verify, deliver, file and publish or cause to be published all such applications, reports, resolutions, surety bonds, consents to service of process, appointments of attorneys to receive service of process, powers of attorney and other papers and instruments, and to take any and all further action, which they, or any of them, may deem necessary or advisable in order to maintain such registration or qualification in effect for as long as they may deem to be in the best interests of this Company or as required by law; and that the execution by such officer or officers of any such document or the taking of any such action in connection with the foregoing matters shall be deemed to be conclusive evidence that such officer or officers deem(s) the taking of any such action to be necessary or proper and in the best interests of the Company and approves such action; and FURTHER RESOLVED, that the Common Shares of the Company to be issued pursuant to and in accordance with the terms and provisions of the Plan and the Registration Statement, shall be duly authorized and issued, fully paid and non-assessable Common Shares of the Company, free of any shareholder preemptive rights; and RESOLVED, that the preparation, execution and filing with the New York Stock Exchange of a Listing Application or a Supplemental Listing Application (including all exhibits and supporting material) to list the 5,000,000 Common Shares to be issued under the Plan be, and it hereby is, in all respects authorized and approved; and that the officers of the Company and its attorneys, Messrs. David M. Coffey, Suzanne M. Hanselman, Charles E. Jarrett, R. Steven Kestner and Dane A. Shrallow, be, and each of them is, hereby authorized and empowered, at such time as to them shall seem advisable, to make application for such listing and, in connection therewith, to execute, in the name and on behalf of the Company, and under 3 its corporate seal or otherwise, and to file or deliver, all such applications, statements, certificates, agreements and other instruments and documents as shall be necessary or desirable to accomplish such listing; and that such officers and attorneys be, and each of them hereby is, authorized to appear on behalf of the Company before the appropriate committee or body of the New York Stock Exchange, Inc., as such appearance may be required, with authority to make such changes in any such Listing Application as shall be presented thereto and in any agreements that may be made in connection therewith as, in their or his discretion, may be necessary to comply with the requirements for such listing; and FURTHER RESOLVED, that the authority of National City Bank ("NCB"), as transfer agent and registrar for the Company's outstanding Common Shares, be, and it hereby is, extended to include the original issue and the transfer and registration from time to time of the additional Common Shares to be issued under the Plan, as herein authorized; and FURTHER RESOLVED, that for the purpose of the original issue of Common Shares by the Company under the Plan as aforesaid, NCB, as transfer agent and registrar for the Common Shares, be, and is hereby, authorized and directed to (i) countersign as such transfer agent by manual or facsimile signature stock certificates for the Common Shares to be so issued by the Company when such certificates shall be delivered to such transfer agent duly executed on behalf of the Company, (ii) procure as registrar of the Common Shares the registration of such certificates, and (iii) deliver such certificates, when so countersigned and registered, to or upon the order of the persons entitled thereto as set forth in the order or orders of the Company for the issuance of the Common Shares; and FURTHER RESOLVED, that the Board of Directors of the Company hereby adopts and incorporates by reference any form of specific resolution to carry into effect the purpose and intent of the foregoing resolutions, or covering authority included in matters authorized in the foregoing resolutions, including forms of resolutions in connection therewith that may be required by the Commission, the National Association of Securities Dealers, Inc., the New York Stock Exchange and any state, institution, person or agency, and the Secretary of the Company is hereby directed to insert a copy thereof in the minute book of the Company following the minutes of this meeting and certify the same as having been duly adopted thereby; and FURTHER RESOLVED, that the Compensation Committee of the Board be, and it hereby is, authorized and directed, for and on behalf of the Company to administer the Plan in accordance with its terms, to interpret the Plan and make all determinations thereunder, to adopt, alter and repeal such rules, guidelines and practices governing the Plan as it shall deem advisable from time to time and to otherwise exercise all of the powers and authority granted to such Committee under the Plan; and FURTHER RESOLVED, that the President, any Vice President, the Treasurer and the Secretary of the Company be, and each of them with full power to act without the others is, hereby authorized and empowered to do or cause to be done all such acts or things, to cause to be paid all necessary fees and expenses, and to make, execute and deliver, or cause to be made, 4 executed and delivered, all such agreements, documents, instruments and certificates, in the name of and on behalf of the Company or otherwise, as they or any of them may deem necessary, advisable or appropriate to effectuate or carry out the purposes and intent of the foregoing resolutions; and FURTHER RESOLVED, that any and all actions heretofore or hereafter taken by any officer or officers of the Company within the terms of the foregoing resolutions be and are hereby ratified and confirmed as the authorized acts and deeds of the Company. I, Charles E. Jarrett, do hereby certify that I am the duly elected, qualified and acting Secretary of The Progressive Corporation, an Ohio corporation (the "Company"); that I have custody of the official records of the Company; and that the foregoing is a true, correct, and complete copy of the resolutions duly adopted at a meeting of the Board of Directors on the 31st day of January, 2003; and that said resolutions are valid and binding, and have not been amended, modified or rescinded, and are in full force and effect on the date hereof. IN WITNESS WHEREOF, I have hereunto set my hand as such Secretary and affixed the seal of the Company on the 21st day of April, 2003. /s/ Charles E. Jarrett ----------------------------------- SEAL Charles E. 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EX-4.A

                                                                    Exhibit 4(a)

                           THE PROGRESSIVE CORPORATION

                               2003 INCENTIVE PLAN



SECTION 1.  ESTABLISHMENT; PURPOSE; DEFINITIONS.

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

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

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

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

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

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

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

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

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

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

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

          "Committee" means the Compensation Committee of the Board.

          "Company" means The Progressive Corporation, an Ohio corporation, or
     any successor corporation.


                                      -1-




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

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

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

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

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

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

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

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

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

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

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

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


                                      -2-




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

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

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

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

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

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

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

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

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

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

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

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


SECTION 2.  ADMINISTRATION.

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


                                      -3-




pleasure of the Board. The functions of the Committee specified in the Plan
shall be exercised by the Board if and to the extent that no Committee exists
which has the authority to so administer the Plan.

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

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

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


SECTION 3.  STOCK SUBJECT TO THE PLAN.

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

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

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


                                      -4-




     shares subject to outstanding Options granted under the Plan and in the
     number of shares subject to Restricted Stock Awards granted under the Plan
     as may be approved by the Committee, in its sole discretion, to prevent
     dilution or enlargement of rights; provided that the number of shares
     subject to any Award shall always be a whole number. Any fractional shares
     shall be eliminated.

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


SECTION 4.  ELIGIBILITY.

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


SECTION 5.  RESTRICTED STOCK.

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

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

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

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


                                      -5-



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

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

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

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

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

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

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


                                      -6-




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

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

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

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

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

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


                                      -7-




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

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

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

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


                                      -8-




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

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

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

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

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

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

               (iii) DISQUALIFYING ACTIVITY - means any of the following acts or
               activities:

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

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


                                      -9-



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

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

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



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

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

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

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

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

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


                                      -10-



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


SECTION 6.        STOCK OPTIONS.

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

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

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

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

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

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


                                      -11-



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

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

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

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

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


                                      -12-





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

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

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

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


                                      -13-





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

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


SECTION 7.  CHANGE IN CONTROL PROVISION.

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

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

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

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

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

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


                                      -14-




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

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

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

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

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

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

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

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


                                      -15-




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


SECTION 8.  AMENDMENTS AND TERMINATION.

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

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

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

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


SECTION 9.  UNFUNDED STATUS OF PLAN.

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


SECTION 10.  GENERAL PROVISIONS.

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


                                      -16-




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

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

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

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

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

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

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


                                      -17-




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

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

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

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


SECTION 11.  SHAREHOLDER APPROVAL; EFFECTIVE DATE OF PLAN.

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


SECTION 12.  TERM OF PLAN.

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


                                      -18-

EX-4.B

                                                                    Exhibit 4(b)


                           THE PROGRESSIVE CORPORATION
                               2003 INCENTIVE PLAN
                        RESTRICTED STOCK AWARD AGREEMENT
                               (TIME-BASED AWARD)

     This Agreement ("Agreement") is made this  by and between
 ("Participant") and The Progressive Corporation (the
"Company").

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

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

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

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

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

     a.   One-third of the shares of Restricted Stock shall vest on
          .

     b.   One-third of the shares of Restricted Stock shall vest on
          .

     c.   The final one-third of the shares of Restricted Stock shall vest on
          .

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

     4.   MANNER IN WHICH SHARES WILL BE HELD. Stock certificates evidencing the
shares of Restricted Stock awarded under this Agreement shall be registered in
the name of Participant and shall be delivered to and held in custody by the
Company, or its designee, until the restrictions thereon shall have lapsed or
any conditions to the vesting of such Award, or a portion thereof, have been
satisfied. Such certificates shall bear an appropriate legend referring to the
terms, conditions and restrictions applicable to such Award.

     In the discretion of the Company, any or all shares of Restricted Stock
awarded to Participant hereunder may be issued in, or after issuance may be
transferred to, book-entry form and held by the


                                      -1-




Company in such form. In such event, no stock certificates evidencing such
shares will be held, the applicable restrictions will be noted in the records of
the Company's transfer agent and in the book entry system, and upon vesting,
Participant may request that the Company issue a stock certificate for the
applicable number of Common Shares.

     5.   RIGHTS OF SHAREHOLDER. Except as otherwise provided in this Agreement
or the Plan, Participant shall have, with respect to the shares of Restricted
Stock awarded hereunder, all of the rights of a shareholder of the Company,
including the right to vote the shares and the right to receive any dividends as
declared by the Company's Board of Directors.

     6.   SHARES NON-TRANSFERABLE. No shares of Restricted Stock shall be
transferable by Participant other than by will or by the laws of descent and
distribution. In the event any Award is transferred or assigned pursuant to a
court order, such transfer or assignment shall be without liability to the
Company, and the Company shall have the right to offset against such Award any
expenses (including attorneys' fees) incurred by the Company in connection with
such transfer or assignment.

     7.   EXECUTIVE DEFERRED COMPENSATION PLAN. If Participant is eligible, and
has made the appropriate election, to defer the Restricted Stock awarded
hereunder into The Progressive Corporation Executive Deferred Compensation Plan
(the "Deferral Plan"), upon vesting, the shares of Restricted Stock awarded
hereunder shall be considered to be deferred pursuant to the Deferral Plan,
subject to and in accordance with the terms and conditions of the Deferral Plan
and any deferral agreement entered into by Participant thereunder.

     8.   TERMINATION OF EMPLOYMENT. Except as otherwise provided in the Plan or
as determined by the Compensation Committee of the Company's Board of Directors,
if Participant's employment with the Company is terminated for any reason other
than death, Disability or Qualified Retirement, all Restricted Stock held by
Participant which is unvested or subject to restriction at the time of such
termination shall be automatically forfeited.

     9.   TAXES. No later than the date as of which an amount first becomes
includable in the gross income of Participant for federal income tax purposes
with respect to shares of Restricted Stock awarded under this Agreement,
Participant shall pay to the Company, or make arrangements satisfactory to the
Committee regarding the payment of, all federal, state or local taxes or other
items of any kind required by law to be withheld with respect to such amount.
Participant may satisfy any applicable tax withholding obligation resulting from
the vesting of shares of Restricted Stock awarded hereunder by surrendering to
Company any other unrestricted Common Shares of the Company then owned by
Participant or Common Shares which are part of the Award. The obligations of the
Company under the Plan shall be conditional on such payment or arrangements and
the Company and its Subsidiaries and Affiliates to the extent permitted by law
shall have the right to deduct any such taxes from any payment of any kind
otherwise due to Participant.

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

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


                                      -2-




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

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



                                      -3-





                     APPENDIX A --- IRREVOCABLE STOCK POWER


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

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

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

______________ shares of Common Shares, $1.00 par value per share, of The
Progressive Corporation ("Company") represented by certificate(s)
no(s).
      ------------------------------------------------------------------------ ,

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

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

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

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

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

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


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


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

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



                                      -4-

EX-4.C

                                                                    Exhibit 4(c)


                           THE PROGRESSIVE CORPORATION
                               2003 INCENTIVE PLAN
                        RESTRICTED STOCK AWARD AGREEMENT
                            (PERFORMANCE-BASED AWARD)

     This Agreement ("Agreement") is made this  by and between
 ("Participant") and The Progressive Corporation (the
"Company").

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

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

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

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

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

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

     4.   EXPIRATION OF AWARD. Notwithstanding anything to the contrary in this
Agreement, if Participant's rights in and to the shares of Restricted Stock
granted hereunder have not vested in accordance with Section 3 of this Agreement
on or before December 31, 2012, this Award shall expire. Upon such expiration,
the Common Shares issued pursuant to this Agreement shall automatically be
forfeited, and Participant shall have no further rights with respect thereto.

     5.   MANNER IN WHICH SHARES WILL BE HELD. Stock certificates evidencing the
shares of Restricted Stock awarded under this Agreement shall be registered in
name of Participant and shall be


                                      -1-




registered in the name of Participant and shall be delivered to and held in
custody by the Company, or its designee, until the restrictions thereon shall
have lapsed or any conditions to the vesting of such Award have been satisfied.
Such certificates shall bear an appropriate legend referring to the terms,
conditions and restrictions applicable to such Award.

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

     6.   RIGHTS OF SHAREHOLDER. Except as otherwise provided in this Agreement
or the Plan, Participant shall have, with respect to the shares of Restricted
Stock awarded hereunder, all of the rights of a shareholder of the Company,
including the right to vote the shares and the right to receive any dividends as
declared by the Company's Board of Directors.

     7.   SHARES NON-TRANSFERABLE. No shares of Restricted Stock shall be
transferable by Participant other than by will or by the laws of descent and
distribution. In the event any Award is transferred or assigned pursuant to a
court order, such transfer or assignment shall be without liability to the
Company, and the Company shall have the right to offset against such Award any
expenses (including attorneys' fees) incurred by the Company in connection with
such transfer or assignment.

     8.   EXECUTIVE DEFERRED COMPENSATION PLAN. If Participant is eligible, and
has made the appropriate election, to defer the Restricted Stock awarded
hereunder into The Progressive Corporation Executive Deferred Compensation Plan
(the "Deferral Plan"), upon vesting, the shares of Restricted Stock awarded
hereunder shall be considered to be deferred pursuant to the Deferral Plan,
subject to and in accordance with the terms and conditions of the Deferral Plan
and any deferral agreement entered into by Participant thereunder.

     9.   TERMINATION OF EMPLOYMENT. Except as otherwise provided in the Plan or
as determined by the Compensation Committee of the Company's Board of Directors,
if Participant's employment with the Company is terminated for any reason other
than death, Disability or Qualified Retirement, all Restricted Stock held by
Participant which is unvested or subject to restriction at the time of such
termination shall be automatically forfeited.

     10.  TAXES. No later than the date as of which an amount first becomes
includable in the gross income of Participant for federal income tax purposes
with respect to shares of Restricted Stock awarded under this Agreement,
Participant shall pay to the Company, or make arrangements satisfactory to the
Committee regarding the payment of, all federal, state or local taxes or other
items of any kind required by law to be withheld with respect to such amount.
Participant may satisfy any applicable tax withholding obligation resulting from
the vesting of shares of Restricted Stock awarded hereunder by surrendering to
Company any other unrestricted Common Shares of the Company then owned by
Participant or Common Shares which are part of the Award. The obligations of the
Company under the Plan shall be conditional on such payment or arrangements and
the Company and its Subsidiaries and Affiliates to the extent permitted by law
shall have the right to deduct any such taxes from any payment of any kind
otherwise due to Participant.

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


                                      -2-




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

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

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


                                      -3-






                     APPENDIX A --- IRREVOCABLE STOCK POWER


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

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

- --------------------------------------------------------------------------------
_____________ shares of Common Shares, $1.00 par value per share, of The
Progressive Corporation ("Company") represented by certificate(s)
no(s).
       ----------------------------------------------------------------------- ,

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

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

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

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

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

Date: _________________________


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


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

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


                                      -4-

EX-4.D

                                                                    EXHIBIT 4(d)

        Amended Articles of Incorporation, as amended, of the Registrant


                                   CERTIFICATE
                                       OF
                        AMENDED ARTICLES OF INCORPORATION
                                       OF
                           THE PROGRESSIVE CORPORATION



     PETER B. LEWIS, Chairman of the Board, and DAVID M. SCHNEIDER, Secretary,
of The Progressive Corporation, an Ohio corporation (the "Corporation"), with
its principal office at Mayfield Village, Cuyahoga County, Ohio, do hereby
certify that on April 20, 1984, in order to consolidate the Corporation's
existing Articles of Incorporation and all previously adopted amendments thereto
that were in force at that time, the directors of the Corporation, at a meeting
duly called and held, duly adopted, pursuant to the authority of Ohio Code
Section 1701.72(B), the Amended Articles of Incorporation attached hereto as
Exhibit I, to supersede and take the place of the existing Articles of
Incorporation and all amendments thereto. A true and correct copy of the
resolution as adopted by the directors of the Corporation is attached hereto as
Exhibit II.

     IN WITNESS WHEREOF, said PETER B. LEWIS, Chairman of the Board, and DAVID
M. SCHNEIDER, Secretary, of The Progressive Corporation, acting for and in
behalf of said Corporation, have hereunto subscribed their names this 20th day
of April, 1984.


                                         /s/ Peter B. Lewis
                                         --------------------------------------
                                         Peter B. Lewis, Chairman of the Board


                                         /s/ David M. Schneider
                                         --------------------------------------
                                         David M. Schneider, Secretary



                                      -1-



                                    EXHIBIT I

                        AMENDED ARTICLES OF INCORPORATION
                                       OF
                           THE PROGRESSIVE CORPORATION

     FIRST: The name of said corporation shall be THE PROGRESSIVE CORPORATION.

     SECOND: The place in the State of Ohio where its principal office is to be
located is Mayfield Village, Cuyahoga County.

     THIRD: The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be formed under Sections 1701.01 to 1701.98,
inclusive, of the Ohio Revised Code.

     FOURTH: SECTION 1. AUTHORIZED SHARES. The aggregate number of shares which
the corporation shall have authority to issue is 22,000,000 shares, consisting
of 2,000,000 Non-Voting Preferred Shares, without par value, and 20,000,000
Common Shares, $1.00 par value.

     SECTION 2. ISSUANCE OF PREFERRED SHARES. The Board of Directors is
authorized at any time, and from time to time, to provide for the issuance of
Non-Voting Preferred Shares in one or more series, and to determine the
designations, preferences, limitations and relative or other rights of the
Non-Voting Preferred Shares or any series thereof. For each series, the Board of
Directors shall determine, by resolution or resolutions adopted prior to the
issuance of any shares thereof, the designations, preferences, limitations and
relative or other rights thereof, including but not limited to the following
relative rights and preferences, as to which there may be variations among
different series:

     A.   the division of such shares into series and the designation and
          authorized number of shares of each series,

     B.   the dividend rate,

     C.   the dates of payment of dividends and the dates from which they are
          cumulative,

     D.   liquidation price,

     E.   redemption rights and price,

     F.   sinking fund requirements,

     G.   conversion rights, and

     H.   restrictions on the issuance of such shares.

     Prior to the issuance of any shares of a series, but after adoption by the
Board of Directors of the resolution establishing such series, the appropriate
officers of the corporation shall file such documents with the State of Ohio as
may be required by law including, without limitation, an amendment to these
Articles of Incorporation.

     SECTION 3. COMMON SHARES. Each Common Share shall entitle the holder
thereof to one vote, in person or by proxy, at any and all meetings of the
shareholders of the corporation, on all meetings of the shareholders of the
corporation, on all propositions before such meetings. Each Common Share shall
be entitled to participate equally in such dividends as may be declared by the
Board of Directors out of funds legally available therefor, and to participate
equally in all distributions of assets upon liquidation.


                                      -2-




     FIFTH: No holder of shares of the corporation of any class shall be
entitled as such, as a matter of right, to subscribe for or purchase shares of
any class, now or hereafter authorized, or to subscribe for or purchase
securities convertible into or exchangeable for shares of the corporation or to
which shall be attached or appertain any warrants or rights entitling the holder
thereof to subscribe for or purchase shares, except such rights of subscription
or purchase, if any, for such considerations and upon such terms and conditions
as its Board of Directors from time to time may determine.

     SIXTH: Except as otherwise provided in these Articles of Incorporation or
the Code of Regulations of the corporation, notwithstanding any provisions in
Sections 1701.01 to 1701.98, inclusive, of the Ohio Revised Code, now or
hereafter in effect, requiring for any purpose the vote, consent, waiver or
release of the holders of a designated proportion (but less than all) of the
share of the corporation or any of particular class or classes of shares, as the
case may be, the vote, consent, waiver or release of the holders of shares
entitling them to exercise a majority of the voting power of the shares of the
corporation or of any class or classes of shares, as the case may be, shall be
required and sufficient for any such purpose, except that the affirmative vote
of the holders of record of 75 percent of the shares having voting power with
respect to any such proposal shall be required to amend, alter, change or repeal
Article NINTH of these Articles or the provisions of this Article SIXTH dealing
with the amendment, alteration, change or repeal of Article NINTH.

     SEVENTH: To the extent permitted by law, the corporation, by action of its
Board of Directors, may purchase or otherwise acquire shares of any class issued
by it at such times, for such considerations and upon such terms and conditions
as its Board of Directors may determine.

     EIGHTH: These Amended Articles of Incorporation shall supersede and take
the place of the heretofore existing Articles of Incorporation of the
corporation and all amendments thereto.

     NINTH: The affirmative vote of the holders of record of 75 percent of the
shares having voting power with respect to any such proposal AND the affirmative
vote of a majority of such holders of record other than shares held or
beneficially owned by a "Related Person" (as hereinafter defined) shall be
required for the approval or authorization of any "Business Combination" (as
hereinafter defined) of the corporation with any Related Person; provided,
however, that the 75 percent voting requirement and the majority voting
requirement of holders of record of shares other than a Related Person shall not
be applicable if:

          1. A majority of the "Continuing Directors" of the Corporation (as
     hereinafter defined) have approved the Business Combination; or

          2. The Business Combination is a merger or consolidation and the cash
     or fair market value of the property, securities or other consideration to
     be received per share by holders of Common Shares of the corporation in the
     Business Combination is not less than the highest per share price (with
     appropriate adjustments for recapitalization and for share splits, share
     dividends and like distributions), paid by the Related Person in acquiring
     any of its holdings of the corporation's Common Shares.

          For the purposes of this Article NINTH:

          (a) The term "Business Combination" shall mean (i) any merger or
     consolidation of the corporation or a subsidiary with or into a Related
     Person, (ii) any sale, lease, exchange, transfer or other disposition,
     including without limitation, a mortgage or any other security device, of
     all or any "Substantial Part" (as hereinafter defined) of the assets either
     of the corporation (including without limitation any voting securities of a
     subsidiary) or of a subsidiary, to a Related Person, (iii) any merger or
     consolidation of a Related Person with or into the


                                      -3-





     corporation or a subsidiary of the corporation, (iv) any sale, lease,
     exchange, transfer or other disposition of all or any Substantial Part of
     the assets of a Related Person to the corporation or a subsidiary of the
     corporation, (v) the issuance of any securities of the corporation or a
     subsidiary of the corporation to a Related Person, (vi) any
     recapitalization that would have the effect of increasing the voting power
     of a Related Person, and (vii) any agreement, contract or other arrangement
     providing for any of the transactions described in this definition of
     Business Combination.

          (b) The term "Related Person" shall mean and include any individual,
     corporation, partnership or other person or entity which, together with its
     "Affiliates" and "Associates" (as defined on September 1, 1982 at Rule
     12b-2 under the Securities Exchange Act of 1934), "Beneficially Owns" (as
     defined on September 1, 1982 at Rule 13d-3 under the Securities Exchange
     Act of 1934) in the aggregate 20 percent or more of the outstanding Common
     Shares of the corporation, and any Affiliate or Associate of any such
     individual, corporation, partnership or other person or entity.

          (c) The term "Substantial Part" shall mean more than 30 percent of the
     fair market value of the total assets of the corporation in question, as of
     the end of its most recent fiscal year ending prior to the time the
     determination is being made.

          (d) Without limitation, any Common Shares of the corporation that any
     Related Person has the right to acquire pursuant to any agreement, or upon
     exercise of conversion rights, warrants or options, or otherwise, shall be
     deemed beneficially owned by the Related Person.

          (e) For the purposes of sub-paragraph (2) of this Article NINTH, the
     term "other consideration to be received" shall include, without
     limitation, Common Shares of the corporation retained by its existing
     public shareholders in the event of a Business Combination in which the
     corporation is the surviving corporation.

          (f) The term "Continuing Director" shall mean a director who was a
     member of the Board of Directors of the corporation immediately prior to
     the time that the Related Person involved in a Business Combination became
     a Related Person.


                                      -4-





                                   EXHIBIT II
                           THE PROGRESSIVE CORPORATION
                              DIRECTORS RESOLUTION

     RESOLVED, that to consolidate the Company's existing Articles of
Incorporation and all previously adopted amendments thereto, the Amended
Articles of Incorporation presented to this meeting are hereby adopted to
supersede and take the place of the existing Articles and all amendments
thereto.



                                       -5-





                            CERTIFICATE OF AMENDMENT
                                       TO
                      THE AMENDED ARTICLES OF INCORPORATION
                                       OF
                           THE PROGRESSIVE CORPORATION


     PETER B. LEWIS, Chairman of the Board, and DAVID M. SCHNEIDER, Secretary,
of The Progressive Corporation, an Ohio corporation for profit with its
principal office at Mayfield Village, Cuyahoga County, Ohio (the "Company"),do
hereby certify that a meeting of the shareholders of the Company was duly called
and held on April 25, 1986, at which meeting a quorum of the shareholders was
present in person or by proxy, and by the affirmative vote of the holders of
shares entitling them to exercise a majority of the voting power of the Company
on proposals to amend the Company's Amended Articles of Incorporation, the
following resolution was adopted:

          RESOLVED, that Article FOURTH of the Company's Amended Articles of
     Incorporation be, and the same hereby is, amended to be and read in its
     entirety as follows:

               FOURTH: SECTION 1. AUTHORIZED SHARES. The aggregate number of
          shares which the corporation shall have authority to issue is
          52,000,000 shares, consisting of 2,000,000 Non-Voting Preferred
          Shares, without par value, and 50,000,000 Common Shares, $1.00 par
          value.

               SECTION 2. ISSUANCE OF PREFERRED SHARES. The Board of Directors
          is authorized at any time, and from time to time, to provide for the
          issuance of Non-Voting Preferred Shares in one or more series, and to
          determine the designations, preferences, limitations and relative or
          other rights of the Non-Voting Preferred Shares or any series thereof.
          For each series, the Board of Directors shall determine, by resolution
          or resolutions adopted prior to the issuance of any shares thereof,
          the designations, preferences, limitations and relative or other
          rights thereof, including but not limited to the following relative
          rights and preferences, as to which there may be variations among
          different series:

          A.   the division of such shares into series and the designation and
               authorized number of shares of each series,

          B.   the dividend rate,

          C.   the dates of payment of dividends and the dates from which they
               are cumulative,

          D.   liquidation price,

          E.   redemption rights and price,

          F.   sinking fund requirements,

          G.   conversion rights, and

          H.   restrictions on the issuance of such shares.

          Prior to the issuance of any shares of a series, but after adoption by
          the Board of Directors of the


                                      -6-




          resolution establishing such series, the appropriate officers of the
          corporation shall file such documents with the State of Ohio as may be
          required by law including, without limitation, an amendment to these
          Amended Articles of Incorporation.

               SECTION 3. COMMON SHARES. Each Common Share shall entitle the
          holder hereof to one vote, in person or by proxy, at any and all
          meetings of the shareholders of the corporation, on all propositions
          before such meetings. Each Common Share shall be entitled to
          participate equally in such dividends as may be declared by the Board
          of Directors out of funds legally available therefor, and to
          participate equally in all distributions of assets upon liquidation.

     IN WITNESS WHEREOF, said PETER B. LEWIS, Chairman of the Board, and DAVID
M. SCHNEIDER, Secretary, of The Progressive Corporation, acting for and in
behalf of said corporation, have hereunto subscribed their names this 25th day
of April, 1986.


                                             /s/ Peter B. Lewis
                                             --------------------------------
                                             Peter B. Lewis, Chairman


                                             /s/ David M. Schneider
                                             --------------------------------
                                             David M. Schneider, Secretary



                                      -7-






                            CERTIFICATE OF AMENDMENT
                                       TO
                      THE AMENDED ARTICLES OF INCORPORATION
                                       OF
                           THE PROGRESSIVE CORPORATION


     PETER B. LEWIS, Chairman of the Board, and DAVID M. SCHNEIDER, Secretary,
of The Progressive Corporation, an Ohio corporation for profit with its
principal office at 6300 Wilson Mills Road, Mayfield Village, Cuyahoga County,
Ohio (the "Company"), do hereby certify that a meeting of the shareholders of
the Company was duly called and held on April 24, 1987, at which meeting a
quorum of the shareholders was present in person or by proxy, and by the
affirmative vote of the holders of shares entitling them to exercise a majority
of the voting power of the Company on proposals to amend the Company's Amended
Articles of incorporation, the following resolution was adopted:

          RESOLVED, that Article FOURTH of the Company's Amended Articles of
     Incorporation be, and the same hereby is, amended to be and read in its
     entirety as follows:

               FOURTH: SECTION 1. AUTHORIZED SHARES. The aggregate number of
          shares which the corporation shall have authority to issue is
          110,000,000 shares, consisting of 10,000,000 Non-Voting Preferred
          Shares, without par value, and 100,000,000 Common Shares, $1.00 par
          value.

               SECTION 2. ISSUANCE OF PREFERRED SHARES. The Board of Directors
          is authorized at any time, and from time to time, to provide for the
          issuance of Non-Voting Preferred Shares in one or more series, and to
          determine the designations, preferences, limitations and relative or
          other rights of the Non-Voting Preferred Shares or any series thereof.
          For each series, the Board of Directors shall determine, by resolution
          or resolutions adopted prior to the issuance of any shares thereof,
          the designations, preferences, limitations and relative or other
          rights thereof, including but not limited to the following relative
          rights and preferences, as to which there may be variations among
          different series:

          A.   the division of such shares into series and the designation and
               authorized number of shares of each series,

          B.   the dividend rate,

          C.   the dates of payment of dividends and the dates from which they
               are cumulative,

          D.   liquidation price,

          E.   redemption rights and price,

          F.   sinking fund requirements,

          G.   conversion rights, and

          H.   restrictions on the issuance of such shares.


                                      -8-




          Prior to the issuance of any shares of a series, but after adoption by
          the Board of Directors of the resolution establishing such series, the
          appropriate officers of the corporation shall file such documents with
          the State of Ohio as may be required by law including, without
          limitation, an amendment to these Amended Articles of Incorporation.

               SECTION 3. COMMON SHARES. Each Common Share shall entitle the
          holder thereof to one vote, in person or by proxy, at any and all
          meetings of the shareholders of the corporation, on all propositions
          before such meetings. Each Common Share shall be entitled to
          participate equally in such dividends as may be declared by the Board
          of Directors out of funds legally available therefor, and to
          participate equally in all distributions of assets upon liquidation.

     IN WITNESS WHEREOF, said PETER B. LEWIS, Chairman of the Board, and DAVID
M. SCHNEIDER, Secretary, of The Progressive Corporation, acting for and in
behalf of said corporation, have hereunto subscribed their names this 24th day
of April, 1987.



                                            /s/ Peter B. Lewis
                                            --------------------------------
                                            Peter B. Lewis, Chairman

                                            /s/ David M. Schneider
                                            --------------------------------
                                            David M. Schneider, Secretary


                                      -9-





                            CERTIFICATE OF AMENDMENT
                                       TO
                        AMENDED ARTICLES OF INCORPORATION
                                       OF
                           THE PROGRESSIVE CORPORATION

     PETER B. LEWIS, President, and DAVID M. SCHNEIDER, Secretary, of The
Progressive Corporation, an Ohio corporation for profit with its principal
office at Mayfield Village, Cuyahoga County, Ohio (the "Company"), do hereby
certify that a meeting of the Shareholders of the Company was duly called and
held on April 19, 1991, at which meeting a quorum of the shareholders was
present in person or by proxy, and by the affirmative vote of the holders of
shares entitling them to exercise a majority of the voting power of the Company
on a proposal to amend the Company's Amended Articles of Incorporation, the
following resolution was adopted:

     RESOLVED, that Article Fourth of the Company's Amended Articles of
Incorporation be, and the same hereby is, deleted in its entirety and there is
substituted therefor the following:

     Article Fourth. The authorized number of shares of the corporation is
     125,000,000, consisting of 20,000,000 Serial Preferred Shares, without par
     value (hereinafter called "Serial Preferred Shares"), 5,000,000 Voting
     Preference Shares, without par value (hereinafter called "Voting Preference
     Shares"), and 100,000,000 Common Shares, $1.00 par value (hereinafter
     called "Common Shares").

                                   DIVISION A

     The Serial Preferred Shares shall have the following express terms:

     Section 1. Series. The Serial Preferred Shares may be issued from time to
time in one or more series. All shares of Serial Preferred Shares shall be of
equal rank and shall be identical, except in respect of the matters that may be
fixed by the Board of Directors as hereinafter provided, and each share of a
series shall be identical with all other shares of such series, except as to the
dates from which dividends shall accrue and be cumulative. All Serial Preferred
Shares shall rank on a parity with and be identical to all Voting Preference
Shares except in respect of (i) the matters that may be fixed by the Board of
Directors as provided in clauses (a) through (i), both inclusive, of this
Section and (ii) the voting rights and provisions for consents relating to
Serial Preferred Shares as fixed and determined by Section 5 of this Division.
Subject to the provisions of Sections 2 through 7, both inclusive, of this
Division, which provisions shall apply to all Serial Preferred Shares, the Board
of Directors hereby is authorized to cause such shares to be issued in one or
more series and with respect to each such series to determine and fix prior to
the thereof (and thereafter, to the extent provided in clause (b) of this
Section) the following:

          (a) The designation of the series, which may be by distinguishing
     number, letter or title;

          (b) The authorized number of shares of the series, which number the
     Board of Directors may (except where otherwise provided in the creation of
     the series) increase or decrease from time to time before or after the
     issuance thereof (but not below the number of shares thereof then
     outstanding);

          (c) The dividend rate or rates of the series;

          (d) The dates on which and the period or periods for which dividends,
     if declared, shall be payable and the date or dates from which dividends
     shall accrue and be cumulative;


                                      -10-




          (e) The redemption rights and price or prices, if any, for shares of
     the series;

          (f) The terms and amount of the sinking fund, if any, for the purchase
     or redemption of shares of the series;

          (g) The amounts payable on shares of the series in the event of any
     voluntary or involuntary liquidation, dissolution or winding up of the
     affairs of the corporation;

          (h) Whether the shares of the series shall be convertible into Common
     Shares or shares of any other class and, if so, the conversion rate or
     rates or price or prices, any adjustments thereof and all other terms and
     conditions upon which such conversion may be made; and

          (i) Restrictions (in addition to those set forth in Subsection 5(c) of
     this Division) on the issuance of shares of the same series or of any other
     class or series.

     The Board of Directors is authorized to adopt from time to time amendments
to the Amended Articles of Incorporation fixing, with respect to each such
series, the matters described in clauses (a) through (i), both inclusive, of
this Section and is authorized to take such actions with respect thereto as may
be required by law in order to effect such amendments.

     Section 2. Dividends.

          (a) The holders of Serial Preferred Shares of each series, in
     preference to the holders of Common Shares and of any other class of shares
     ranking junior to the Serial Preferred Shares, shall be entitled to receive
     out of any funds legally available for Serial Preferred Shares and Voting
     Preference Shares and when and as declared by the Board of Directors,
     dividends in cash at the rate or rates for such series fixed in accordance
     with the provisions of Section 1 of this Division and no more, payable on
     the dates fixed for such series. Such dividends shall accrue and be
     cumulative, in the case of shares of each particular series, from and after
     the date or dates fixed with respect to such series. No dividends shall be
     paid upon or declared or set apart for any series of the Serial Preferred
     Shares for any dividend period unless at the same time.

               (1) a like proportionate dividend for the dividend periods
          terminating on the same or any earlier date, ratably in proportion to
          the respective dividend rates fixed therefor, shall have been paid
          upon or declared or set apart for all Serial Preferred Shares of all
          series then issued and outstanding and entitled to receive such
          dividend and

               (2) the dividends payable for the dividend periods terminating on
          the same or any earlier date, ratably in proportion to the respective
          dividend rates fixed therefor, shall have been paid upon or declared
          or set apart for all Voting Preference Shares of all series then
          issued and outstanding and entitled to receive such dividend.

          (b) So long as any Serial Preferred Shares shall be outstanding no
     dividend, except a dividend payable in Common Shares or other shares
     ranking junior to the Serial Preferred Shares, shall be paid or declared or
     any distribution be made, except as aforesaid, in respect of the Common
     Shares or any other shares ranking junior to the Serial Preferred Shares,
     nor shall any Common Shares or any other shares ranking junior to the
     Serial Preferred Shares be purchased, retired or otherwise acquired by the
     corporation, except out of the proceeds of the sale of Common Shares or
     other shares of the corporation ranking junior to the Serial Preferred
     Shares received by the corporation subsequent to the date of first issuance
     of Serial Preferred Shares of any series, unless:


                                      -11-




               (1) All accrued and unpaid dividends on Serial Preferred Shares,
          including the full dividends for all current dividend periods, shall
          have been declared and paid or a sum sufficient for payment thereof
          set apart; and

               (2) There shall be no arrearages with respect to the redemption
          of Serial Preferred Shares of any series from any sinking fund
          provided for shares of such series in accordance with the provisions
          of Section 1 of this Division.

     Section 3. Redemption.

          (a) Subject to the express terms of each series and to the provisions
     of Subsection 5(c)(3) of this Division, the corporation:

               (1) May, from time to time at the option of the Board of
          Directors, redeem all or any part of any redeemable series of Serial
          Preferred Shares at the time outstanding at the applicable redemption
          price for such series fixed in accordance with the provisions of
          Section 1 of this Division; and

               (2) Shall, from time to time, make such redemptions of each
          series of Serial Preferred Shares as may be required to fulfill the
          requirements of any sinking fund provided for shares of such series at
          the applicable sinking fund redemption price fixed in accordance with
          the provisions of Section 1 of this Division;

     and shall in each case pay all accrued and unpaid dividends to the
     redemption date.

          (b) (1) Notice of every such redemption shall be mailed, postage
          prepaid, to the holders of record of the Serial Preferred Shares to be
          redeemed at their respective addresses then appearing on the books of
          the corporation, not less than 30 days nor more than 60 days prior to
          the date fixed for such redemption, or such other time prior thereto
          as the Board of Directors shall fix for any series pursuant to Section
          1 of this Division prior to the issuance thereof. At any time after
          notice as provided above has been deposited in the mail, the
          corporation may deposit the aggregate redemption price of Serial
          Preferred Shares to be redeemed, together with accrued and unpaid
          dividends thereon to the redemption date, with any bank or trust
          company in Cleveland, Ohio or New York, New York, having capital and
          surplus of not less than $100,000,000, named in such notice and direct
          that there be paid to the respective holders of the Serial Preferred
          Shares so to be redeemed amounts equal to the redemption price of the
          Serial Preferred Shares so to be redeemed, together with such accrued
          and unpaid dividends thereon, on surrender of share certificate or
          certificates held by such holders; and upon the deposit of such notice
          in the mail and the making of such deposit of money with such bank or
          trust company, such holders shall cease to be shareholders with
          respect to such shares; and from and after the time such notice shall
          have been so deposited and such deposit of money shall have been so
          made, such holders shall have no rights or claim against the
          corporation with respect to such shares, except only the right to
          receive such money from such bank or trust company without interest or
          to exercise before the redemption date any unexpired privileges of
          conversion. In the event less than all of the outstanding Serial
          Preferred Shares are to be redeemed, the corporation shall select by
          lot the shares so to be redeemed in such manner as shall be prescribed
          by the Board of Directors.

               (2) If the holders of Serial Preferred Shares which have been
          called for redemption shall not within six years after such deposit
          claim the amount deposited for the redemption thereof, any such bank
          or trust company shall, upon demand, pay over to


                                      -12-




          the corporation such unclaimed amounts and thereupon such bank or
          trust company and the corporation shall be relieved of all
          responsibility in respect thereof and to such holders.

          (c) Any Serial Preferred Shares which are (1) redeemed by the
     corporation pursuant to the provisions of this Section, (2) purchased and
     delivered in satisfaction of any sinking fund requirements provided for
     shares of such series, (3) converted in accordance with the express terms
     thereof, or (4) otherwise acquired by the corporation, shall resume the
     status of authorized but unissued Serial Preferred Shares without serial
     designation.

     Section 4. Liquidation.

          (a) (1) In the event of any voluntary or involuntary liquidation,
          dissolution or winding up of the affairs of the corporation, the
          holders of Serial Preferred Shares of any series shall be entitled to
          receive in full out of the assets of the corporation, including its
          capital, before any amount shall be paid or distributed among the
          holders of the Common Shares or any other shares ranking junior to the
          Serial Preferred Shares, the amounts fixed with respect to shares of
          such series in accordance with Section 1 of this Division, plus an
          amount equal to all dividends accrued and unpaid thereon to the date
          of payment of the amount due pursuant to such liquidation, dissolution
          or winding up of the affairs of the corporation. In the event the net
          assets of the corporation legally available therefor are insufficient
          to permit the payment upon all outstanding Serial Preferred Shares and
          Voting Preference Shares of the full preferential amount to which they
          are respectively entitled, then such net assets shall be distributed
          ratably upon all outstanding Serial Preferred Shares and Voting
          Preference Shares in proportion to the full preferential amount to
          which each such share is entitled.

               (2) After payment to the holders of Serial Preferred Shares of
          the full preferential amounts as aforesaid, the holders of Serial
          Preferred Shares, as such, shall have no right or claim to any of the
          remaining assets of the corporation.

          (b) The merger or consolidation of the corporation into or with any
     other corporation, the merger of any other corporation into it, or the
     sale, lease or conveyance of all or substantially all the assets of the
     corporation, shall not be deemed to be a dissolution, liquidation or
     winding up for the purposes of this Section.

     Section 5. Voting.

          (a) The holders of Serial Preferred Shares shall have no voting
     rights, except as provided in this Section or required by law.

          (b) (1) If, and so often as, the corporation shall be in default in
          the payment of the equivalent of the full dividends on any series of
          Serial Preferred Shares at the time outstanding, whether or not earned
          or declared, for a number of dividend payment periods (whether or not
          consecutive) which in the aggregate contain at least 540 days, the
          holders of Serial Preferred Shares of all series, voting separately as
          a class, shall be entitled to elect, as herein provided, two members
          of the Board of Directors of the corporation; provided, however, that
          the holders of Serial Preferred Shares shall not have or exercise such
          special class voting rights except at meetings of such shareholders
          for the election of directors at which the holders of not less than
          50% of the outstanding Serial Preferred Shares of all series then
          outstanding are present in person or by proxy; and provided further
          that the special class voting rights provided for in this paragraph
          when the same shall have become vested shall remain so vested until
          all accrued and

                                      -13-




          unpaid dividends on the Serial Preferred Shares of all series then
          outstanding shall have been paid, whereupon the holders of Serial
          Preferred Shares shall be divested of their special class voting
          rights in respect of subsequent elections of directors, subject to the
          revesting of such special class voting rights in the event above
          specified in this paragraph.

               (2) In the event of default entitling the holders of Serial
          Preferred Shares to elect two directors as specified in paragraph (1)
          of this Subsection, a special meeting of such holders for the purpose
          of electing such directors shall be called by the Secretary of the
          corporation upon written request of, or may be called by, the holders
          of record of at least 10% of the Serial Preferred Shares of all series
          at the time outstanding, and notice thereof shall be given in the same
          manner as that required for the annual meeting of shareholders;
          provided, however, that the corporation shall not be required to call
          such special meeting if the annual meeting of shareholders shall be
          called to be held within 120 days after the date of receipt of the
          foregoing written request from the holders of Serial Preferred Shares.
          At any meeting at which the holders of Serial Preferred Shares shall
          be entitled to elect directors, the holders of 50% of the Serial
          Preferred Shares of all series at the time outstanding, present in
          person or by proxy, shall be sufficient to constitute a quorum, and
          the vote of the holders of a majority of such shares so present at any
          such meeting at which there shall be such a quorum shall be sufficient
          to elect the members of the Board of Directors which the holders of
          Serial Preferred Shares are entitled to elect as herein provided.
          Notwithstanding any provision of these Amended Articles of
          Incorporation or the Code of Regulations of the corporation or any
          action taken by the holders of any class of shares fixing the number
          of directors of the corporation, the two directors who may be elected
          by the holders of Serial Preferred Shares pursuant to this Subsection
          shall serve in addition to any other directors then in office or
          proposed to be elected otherwise than pursuant to this Subsection.
          Nothing in this Subsection shall prevent any change otherwise
          permitted in the total number of directors of the corporation nor
          require the resignation of any director elected otherwise than
          pursuant to this Subsection. Notwithstanding any classification of the
          other directors of the corporation, the two directors elected by the
          holders of Serial Preferred Shares shall be elected annually for terms
          expiring at the next succeeding annual meeting of shareholders.

               (3) Upon any divesting of the special class voting rights of the
          holders of the Serial Preferred Shares in respect of elections of
          directors as provided in this Subsection, the terms of office of all
          directors then in office elected by such holders shall terminate
          immediately thereupon. If the office of any director elected by such
          holders voting as a class becomes vacant by reason of death,
          resignation, removal from office or otherwise, the remaining director
          elected by such holders voting as a class may elect a successor who
          shall hold office for the unexpired term in respect of which such
          vacancy occurred.

          (c) The affirmative vote or consent of the holders of at least
     two-thirds of the Serial Preferred Shares at the time outstanding, voting
     or consenting separately as a class, given in person or by proxy either in
     writing or at a meeting called for the purpose, shall be necessary to
     effect any one or more of the following (but so far as the holders of
     Serial Preferred Shares are concerned, such action may be effected with
     such vote or consent):

               (1) Any amendment, alteration or repeal, whether by merger,
          consolidation or otherwise, of any of the provisions of the Amended
          Articles of Incorporation or of the Code of Regulations of the
          corporation which affects adversely the preferences or voting or other
          rights of the holders of Serial Preferred Shares; provided, however,
          neither the amendment of the Amended Articles of Incorporation so as
          to authorize, create or change


                                      -14-




          the authorized or outstanding number of Serial Preferred Shares or of
          any shares ranking on a parity with or junior to the Serial Preferred
          Shares nor the amendment of the provisions of the Code of Regulations
          so as to change the number of directors of the corporation shall be
          deemed to affect adversely the preferences or voting or other rights
          of the holders of Serial Preferred Shares; and provided further, that
          if such amendment, alteration or repeal affects adversely the
          preferences or voting or other rights of one or more but not all
          series of Serial Preferred Shares at the time outstanding, only the
          affirmative vote or consent of the holders of at least two-thirds of
          the number of the shares at the time outstanding of the series so
          affected shall be required;

               (2) The authorization, creation or the increase in the authorized
          number of any shares, or any security convertible into shares, in
          either case ranking prior to the Serial Preferred Shares; or

               (3) The purchase or redemption (for sinking fund purposes or
          otherwise) of less than all of the Serial Preferred Shares then
          outstanding except in accordance with a stock purchase offer made to
          all holders of record of Serial Preferred Shares, unless all dividends
          on all Serial Preferred Shares then outstanding for all previous
          dividend periods shall have been declared and paid or funds therefor
          set apart and all accrued sinking fund obligations applicable thereto
          shall have been complied with.

     Section 6. Pre-emptive Rights. No holder of Serial Preferred Shares as
such, shall have any pre-emptive right to purchase, have offered to him for
purchase or subscribe for any of the corporation's shares or other securities of
any class, whether now or hereafter authorized.

     Section 7. Definitions. For the purposes of this Division:

          (a) Whenever reference is made to shares "ranking prior to the Serial
     Preferred Shares," such reference shall mean and include all shares of the
     corporation in respect of which the rights of the holders thereof as to the
     payment of dividends or as to distributions in the event of a voluntary or
     involuntary liquidation, dissolution or winding up of the affairs of the
     corporation are given preference over the rights of the holders of Serial
     Preferred Shares;

          (b) Whenever reference is made to shares "on a parity with the Serial
     Preferred Shares," such reference shall mean and include all Voting
     Preference Shares and all other shares of the corporation in respect of
     which the rights of the holders thereof as to the payment of dividends or
     as to distributions in the event of a voluntary or involuntary liquidation,
     dissolution or winding up of the affairs of the corporation rank equally
     (except as to the amounts fixed therefor) with the rights of the holders of
     Serial Preferred Shares; and

          (c) Whenever reference is made to shares "ranking junior to the Serial
     Preferred hares," such reference shall mean and include all shares of the
     corporation other than those defined under Subsections (a) and (b) of this
     Section as shares "ranking prior to" or "on a parity with" the Serial
     Preferred Shares.

                                   DIVISION B

     The Voting Preference Shares shall have the following express terms:

     Section 1. Series. The Voting Preference Shares may be issued from time to
time in one or more series. All shares of Voting Preference Shares shall be of
equal rank and shall be identical, except in respect of the matters that maybe
fixed by the Board of Directors as hereinafter provided, and each share of a
series shall be identical with all other shares of such series, except as to the
dates from which

                                      -15-





dividends shall accrue and be cumulative. All Voting Preference Shares shall
rank on a parity with and be identical to all Serial Preferred Shares except in
respect of (i) the matters that may be fixed by the Board of Directors as
provided in clauses (a) through (i), both inclusive, of this Section and (ii)
the voting rights and provisions for consents relating to Voting Preference
Shares as fixed and determined by Section 5 of this Division. Subject to the
provisions of Sections 2 through 7, both inclusive, of this Division, which
provisions shall apply to all Voting Preference Shares, the Board of Directors
hereby is authorized to cause such shares to be issued in one or more series and
with respect to each such 20series to determine and fix prior to the issuance
thereof (and thereafter, to the extent provided in clause (b) of this Section)
the following:

          (a) The designation of the series, which may be by distinguishing
     number, letter or title;

          (b) The authorized number of shares of the series, which number the
     Board of Directors may (except where otherwise provided in the creation of
     the series) increase or decrease from time to time before or after the
     issuance thereof (but not below the number of shares thereof then
     outstanding);

          (c) The dividend rate or rates of the series;

          (d) The dates on which and the period or periods for which dividends,
     if declared, shall be payable and the date or dates from which dividends
     shall accrue and be cumulative;

          (e) The redemption rights and price or prices, if any, for shares of
     the series;

          (f) The terms and amount of the sinking fund, if any, for the purchase
     or redemption of shares of the series;

          (g) The amounts payable on shares of the series in the event of any
     voluntary or involuntary liquidation, dissolution or winding up of the
     affairs of the corporation;

          (h) Whether the shares of the series shall be convertible into Common
     Shares or shares of any other class and, if so, the conversion rate or
     rates or price or prices, any adjustments thereof and all other terms and
     conditions upon which such conversion may be made; and

          (i) Restrictions (in addition to those set forth in Subsection 5(c) of
     this Division) on the issuance of shares of the same series or of any other
     class or series.

     The Board of Directors is authorized to adopt from time to time amendments
to the Amended Articles of Incorporation fixing, with respect to each such
series, the matters described in clauses (a) through (i), both inclusive, of
this Section and is authorized to take such actions with respect thereto as may
be required by law in order to effect such amendments.

     Section 2. Dividends.

          (a) The holders of Voting Preference Shares of each series, in
     preference to the holders of Common Shares and of any other class of shares
     ranking junior to the Voting Preference Shares, shall be entitled to
     receive out of any funds legally available for Voting Preference Shares and
     Serial Preferred Shares and when and as declared by the Board of Directors,
     dividends in cash at the rate or rates for such series fixed in accordance
     with the provisions of Section 1 of this Division and no more, payable on
     the dates fixed for such series. Such dividends shall accrue and be
     cumulative, in the case of shares of each particular series, from and after
     the date or dates fixed with respect to such series. No dividends shall be
     paid upon


                                      -16-




     or declared or set apart for any series of the Voting Preference Shares for
     any dividend period unless at the same time (1) a like proportionate
     dividend for the dividend periods terminating on the same or any earlier
     date, ratably in proportion to the respective annual dividend rates fixed
     therefor, shall have been paid upon or declared or set apart for all Voting
     Preference Shares of all series then issued and outstanding and entitled to
     receive such dividend and (2) the dividends payable for the dividend
     periods terminating on the same or any earlier date, ratably in proportion
     to the respective dividend rates fixed therefor, shall have been paid upon
     or declared or set apart for all Serial Preferred Shares of all series then
     issued and outstanding and entitled to receive such dividend.

          (b) So long as any Voting Preference Shares shall be outstanding no
     dividend, except a dividend payable in Common Shares or other shares
     ranking junior to the Voting Preference Shares, shall be paid or declared
     or any distribution be made, except as aforesaid, in respect of the Common
     Shares or any other shares ranking junior to the Voting Preference Shares,
     nor shall any Common Shares or any other shares ranking junior to the
     Voting Preference Shares be purchased, retired or otherwise acquired by the
     corporation, except out of the proceeds of the sale of Common Shares or
     other shares of the corporation ranking junior to the Voting Preference
     Shares received by the corporation subsequent to the date of first issuance
     of Voting Preference Shares of any series, unless:

               (1) All accrued and unpaid dividends on Voting Preference Shares,
          including the full dividends for all current dividend periods, shall
          have been declared and paid or a sum sufficient for payment thereof
          set apart; and

               (2) There shall be no arrearages with respect to the redemption
          of Voting Preference Shares of any series from any sinking fund
          provided for shares of such series in accordance with the provisions
          of Section 1 of this Division.

     Section 3. Redemption.

          (a) Subject to the express terms of each series and the provisions of
     Subsection 5(c)(6) of this Division, the corporation:

               (1) May, from time to time at the option of the Board of
          Directors, redeem all or any part of any redeemable series of Voting
          Preference Shares at the time outstanding at the applicable redemption
          price for such series fixed in accordance with the provisions of
          Section 1 of this Division; and

               (2) Shall, from time to time, make such redemptions of each
          series of Voting Preference Shares as may be required to fulfill the
          requirements of any sinking fund provided for shares of such series at
          the applicable sinking fund redemption price fixed in accordance with
          the provisions of Section 1 of this Division;

     and shall in each case pay all accrued and unpaid dividends to the
     redemption date.

          (b) (1) Notice of every such redemption shall be mailed, postage
          prepaid, to the holders of record of the Voting Preference Shares to
          be redeemed at their respective addresses then appearing on the books
          of the corporation, not less than 30 days nor more than 60 days prior
          to the date fixed for such redemption, or such other time prior
          thereto as the Board of Directors shall fix for any series pursuant to
          Section 1 of this Division prior to the issuance thereof. At any time
          after notice as provided above has been deposited in the mail, the
          corporation may deposit the aggregate redemption price of Voting
          Preference Shares to be redeemed, together with accrued and unpaid
          dividends


                                      -17-




          thereon to the redemption date, with any bank or trust company in
          Cleveland, Ohio or New York, New York, having capital and surplus of
          not less than $100,000,000, named in such notice and direct that there
          be paid to the respective holders of the Voting Preference Shares so
          to be redeemed amounts equal to the redemption price of the Voting
          Preference Shares so to be redeemed, together with such accrued and
          unpaid dividends thereon, on surrender of the share certificate or
          certificates held by such holders; and upon the deposit of such notice
          in the mail and the making of such deposit of money with such bank or
          trust company, such holders shall cease to be shareholders with
          respect to such shares; and from and after the time such notice shall
          have been so deposited and such deposit of money shall have been so
          made, such holders shall have no rights or claim against the
          corporation with respect to such shares, except only the right to
          receive such money from such bank or trust company without interest or
          to exercise before the redemption date any unexpired privileges of
          conversion. In the event less than all of the outstanding Voting
          Preference Shares are to be redeemed, the corporation shall select by
          lot the shares so to be redeemed in such manner as shall be prescribed
          by the Board of Directors.

               (2) If the holders of Voting Preference Shares which have been
          called for redemption shall not within six years after such deposit
          claim the amount deposited for the redemption thereof, any such bank
          or trust company shall, upon demand, pay over to the corporation such
          unclaimed amounts and thereupon such bank or trust company and the
          corporation shall be relieved of all responsibility in respect thereof
          and to such holders.

          (c) Any Voting Preference Shares which are (1) redeemed by the
     corporation pursuant to the provisions of this Section, (2) purchased and
     delivered in satisfaction of any sinking fund requirements provided for
     shares of such series, (3) converted in accordance with the express terms
     thereof, or (4) otherwise acquired by the corporation, shall resume the
     status of authorized but unissued Voting Preference Shares without serial
     designation.

     Section 4. Liquidation.

          (a) (1) In the event of any voluntary or involuntary liquidation,
          dissolution or winding up of the affairs of the corporation, the
          holders of Voting Preference Shares of any series shall be entitled to
          receive in full out of the assets of the corporation, including its
          capital, before any amount shall be paid or distributed among the
          holders of the Common Shares or any other shares ranking junior to the
          Voting Preference Shares, the amounts fixed with respect to shares of
          such series in accordance with Section 1 of this Division, plus an
          amount equal to all dividends accrued and unpaid thereon to the date
          of payment of the amount due pursuant to such liquidation, dissolution
          or winding up of the affairs of the corporation. In the event the net
          assets of the corporation legally available therefor are insufficient
          to permit the payment upon all outstanding Voting Preference Shares
          and Serial Preferred Shares of the full preferential amount to which
          they are respectively entitled, then such net assets shall be
          distributed ratably upon all outstanding Voting Preference Shares and
          Serial Preferred Shares in proportion to the full preferential amount
          to which each such share is entitled.

               (2) After payment to the holders of Voting Preference Shares of
          the full preferential amounts as aforesaid, the holders of Voting
          Preference Shares, as such, shall have no right or claim to any of the
          remaining assets of the corporation.

          (b) The merger or consolidation of the corporation into or with any
     other corporation, the merger of any other corporation into it, or the
     sale, lease or conveyance of all or


                                      -18-




     substantially all the assets of the corporation, shall not be deemed to be
     a dissolution, liquidation or winding up for the purposes of this Section.

     Section 5. Voting.

          (a) The holders of Voting Preference Shares shall be entitled at all
     times to one vote for each share and, except as otherwise provided in this
     Section or required by law, the holders of Voting Preference Shares and the
     holders of Common Shares shall vote together as a class on all matters
     presented, subject, however, to the special voting rights of the holders of
     Serial Preferred Shares as provided in Section 5 of Division A hereof.

          (b) (1) If, and so often as, the corporation shall be in default in
          the payment of the equivalent of the full dividends on any series of
          Voting Preference Shares at the time outstanding, whether or not
          earned or declared, for a number of dividend payment periods (whether
          or not consecutive) which in the aggregate contain at least 540 days,
          the holders of Voting Preference Shares of all series, voting
          separately as a class, shall be entitled to elect, as herein provided,
          two members of the Board of Directors of the corporation; provided,
          however, that the holders of Voting Preference Shares shall not have
          or exercise such special class voting rights except at meetings of
          such shareholders for the election of directors at which the holders
          of not less than 50% of the outstanding Voting Preference Shares of
          all series then outstanding are present in person or by proxy; and
          provided further that the special class voting rights provided for in
          this paragraph when the same shall have become vested shall remain so
          vested until all accrued and unpaid dividends on the Voting Preference
          Shares of all series then outstanding shall have been paid, whereupon
          the holders of Voting Preference Shares shall be divested of their
          special class voting rights in respect of subsequent elections of
          directors, subject to the revesting of such special class voting
          rights in the event above specified in this paragraph.

               (2) In the event of default entitling the holders of Voting
          Preference Shares to elect two directors as specified in paragraph (1)
          of this Subsection, a special meeting of such holders for the purpose
          of electing such directors shall be called by the Secretary of the
          corporation upon written request of, or may be called by, the holders
          of record of at least 10% of the Voting Preference Shares of all
          series at the time outstanding, and notice thereof shall be given in
          the same manner as that required for the annual meeting of
          shareholders; provided, however, that the corporation shall not be
          required to call such special meeting if the annual meeting of
          shareholders shall be called to be held within 120 days after the date
          of receipt of the foregoing written request from the holders of Voting
          Preference Shares. At any meeting at which the holders of Voting
          Preference Shares shall be entitled to elect directors, the holders of
          50% of the Voting Preference Shares of all series at the time
          outstanding, present in person or by proxy, shall be sufficient to
          constitute a quorum, and the vote of the holders of a majority of such
          shares so present at any such meeting at which there shall be such a
          quorum shall be sufficient to elect the members of the Board of
          Directors which the holders of Voting Preference Shares are entitled
          to elect as herein provided. Notwithstanding any provision of these
          Amended Articles of Incorporation or the Code of Regulations of the
          corporation or any action taken by the holders of any class of shares
          fixing the number of directors of the corporation, the two directors
          who may be elected by the holders of Voting Preference Shares pursuant
          to this Subsection shall serve in addition to any other directors then
          in office or proposed to be elected otherwise than pursuant to this
          Subsection. Nothing in this Subsection shall prevent any change
          otherwise permitted in the total number of directors of the
          corporation or require the resignation of any director elected
          otherwise than pursuant to this Subsection. Notwithstanding any
          classification of the other


                                      -19-




          directors of the corporation, the two directors elected by the holders
          of Voting Preference Shares shall be elected annually for terms
          expiring at the next succeeding annual meeting of shareholders.

               (3) Upon any divesting of the special class voting rights of the
          holders of the Voting Preference Shares in respect of elections of
          directors as provided in this Subsection, the terms of office of all
          directors then in office elected by such holders shall terminate
          immediately thereupon. If the office of any director elected by such
          holders voting as a class becomes vacant by reason of death,
          resignation, removal from office or otherwise, the remaining director
          elected by such holders voting as a class may elect a successor who
          shall hold office for the unexpired term in respect of which such
          vacancy occurred.

          (c) The affirmative vote or consent of the holders of at least
     two-thirds of the Voting Preference Shares at the time outstanding, voting
     or consenting separately as a class, given in person or by proxy either in
     writing or at a meeting called for the purpose, shall be necessary to
     effect any one or more of the following (but so far as the holders of
     Voting Preference Shares are concerned, such action may be effected with
     such vote or consent):

               (1) The sale, lease or conveyance by the corporation of all or
          substantially all of its assets;

               (2) The merger or consolidation of the corporation into or with
          any other corporation or the merger of any other corporation into it;

               (3) The voluntary liquidation, dissolution or winding up of the
          affairs of the corporation;

               (4) Any amendment, alteration or repeal, whether by merger,
          consolidation or otherwise, of any of the provisions of the Amended
          Articles of Incorporation or of the Code of Regulations of the
          corporation which affects adversely the preferences or voting or other
          rights of the holders of Voting Preference Shares; provided, however,
          that for the purpose of this paragraph only, neither the amendment of
          the Amended Articles of Incorporation so as to authorize, create or
          change the authorized or outstanding number of Voting Preference
          Shares or of any shares ranking on a parity with or junior to the
          Voting Preference Shares nor the amendment of the provisions of the
          Code of Regulations so as to change the number of directors of the
          corporation shall be deemed to affect adversely the preferences or
          voting or other rights of the holders of Voting Preference Shares; and
          provided further, that if such amendment, alteration or repeal affects
          adversely the preferences or voting or other rights of one or more but
          not all series of Voting Preference Shares at the time outstanding,
          only the affirmative vote or consent of the holders of at least
          two-thirds of the number of the shares at the time outstanding of the
          series so affected shall be required;

               (5) The authorization, creation or the increase in the authorized
          amount of any shares, or any security convertible into shares, in
          either case ranking prior to the Voting Preference Shares; or

               (6) The purchase or redemption (for sinking fund purposes or
          otherwise) of less than all of the Voting Preference Shares then
          outstanding except in accordance with a stock purchase offer made to
          all holders of record of Voting Preference Shares, unless all
          dividends on all Voting Preference Shares then outstanding for all
          previous dividend


                                      -20-




          periods shall have been declared and paid or funds therefore set apart
          and all accrued sinking fund obligations applicable thereto shall have
          been complied with.

     Section 6. Pre-emptive Rights. No holder of Voting Preference Shares as
such shall have any preemptive right to purchase or subscribe for any of the
corporation's shares or other securities of any class, whether now or hereafter
authorized.

     Section 7. Definitions. For the purposes of this Division:

          (a) Whenever reference is made to shares "ranking prior to the Voting
     Preference Shares," such reference shall mean and include all shares of the
     corporation in respect of which the rights of the holders thereof as to the
     payment of dividends or as to distributions in the event of a voluntary or
     involuntary liquidation, dissolution or winding up of the affairs of the
     corporation are given preference over the rights of the holders of Voting
     Preference Shares;

          (b) Whenever reference is made to shares "on a parity with the Voting
     Preference Shares," such reference shall mean and include all Serial
     Preferred Shares and all other shares of the corporation in respect of
     which the rights of the holders thereof as to the payment of dividends or
     as to distributions in the event of a voluntary or involuntary liquidation,
     dissolution or winding up of the affairs of the corporation rank equally
     (except as to the amounts fixed therefor) with the rights of the holders of
     Voting Preference Shares; and

          (c) Whenever reference is made to shares "ranking junior to the Voting
     Preference Shares," such reference shall mean and include all shares of the
     corporation other than those defined under Subsections (a) and (b) of this
     Section as shares "ranking prior to" or "on a parity with" the Voting
     Preference Shares.

                                   DIVISION C

     The Common Shares shall have the following express terms:

     The Common Shares shall be subject to the express terms of the Serial
Preferred Shares and any series thereof and to the express terms of the Voting
Preference Shares and any series thereof. Each Common Share shall be equal to
every other Common Share and the holders thereof shall be entitled to one vote
for each Common Share on all matters presented. No holder of Common Shares shall
have any pre-emptive right to purchase or subscribe for any of the corporation's
shares or other securities of any class, whether now or hereafter authorized.

     IN WITNESS WHEREOF, Peter B. Lewis, President, and David M. Schneider,
Secretary, of The Progressive Corporation, acting for and on its behalf do
hereunto subscribe their names this 19th day of April, 1991.


                                           /s/ Peter B. Lewis
                                           --------------------------------
                                           Peter B. Lewis, President

                                           /s/ David M. Schneider
                                           --------------------------------
                                           David M. Schneider, Secretary


                                      -21-




                            CERTIFICATE OF AMENDMENT
                                       TO
                        AMENDED ARTICLES OF INCORPORATION
                                       OF
                           THE PROGRESSIVE CORPORATION

     PETER B. LEWIS, President, and DAVID M. SCHNEIDER, Secretary, of The
Progressive Corporation, an Ohio corporation for profit with its principal
office in Mayfield Village, Cuyahoga County, Ohio (the "Company"), do hereby
certify that a Written Action Taken Without A Meeting of the Executive Committee
of the Board of Directors of the Company was duly executed by all members of the
Executive Committee of the Board of Directors and that the following resolution
to amend the Amended Articles of Incorporation of the Company was adopted
pursuant to said Written Action Taken Without A Meeting by the Executive
Committee of the Board of Directors of the Company pursuant to the authority of
Section 1701.70(B)(1) and 1701.73(A) of the Ohio Revised Code and Section 1 of
Division A of Article Fourth of said Amended Articles of Incorporation:

     RESOLVED, that the Amended Articles of Incorporation of the Company be and
they hereby are amended by adding at the end of Division A of Article FOURTH
thereof a new Section 8 reading as follows:

          Section 8. 9 3/8% Serial Preferred Shares, Series A. Of the 20,000,000
     authorized Serial Preferred Shares, without par value, 4,600,000 shares are
     designated as a series entitled "9 3/8% Serial Preferred Shares, Series A"
     (hereinafter called "Series A Shares"). The Series A Shares shall have the
     express terms set forth in this Division as being applicable to all Serial
     Preferred Shares as a class and, in addition, the following express terms
     applicable to all Series A Share as a series of Serial Preferred Shares:

          (a)  The annual dividend rate of the Series A Shares shall be 9-3/8%
               of the liquidation preference of $25.00 per share.

          (b)  Dividends on Series A Shares shall be payable, if declared,
               quarterly on March 31, June 30, September 30 and December 31 of
               each year, the first quarterly dividend being payable, if
               declared, on June 30, 1991. The dividends payable for each full
               quarterly dividend period on each Series A Share shall be
               $.5859375.

               Dividends for the initial dividend period on the Series A Shares,
               or for any period shorter or longer than a full dividend period
               on the Series A Shares, shall be computed on the basis of 30-day
               months and a 360-day year. The aggregate dividend payable
               quarterly to 29 each holder of Series A Shares shall be rounded
               to the nearest one cent with $.005 being rounded upward. Each
               dividend shall be payable to the holders of record on such record
               date, not less than 15 nor more than 30 days preceding the
               payment date thereof, as shall be fixed from time to time by the
               corporation's Board of Directors.

          (c)  Dividends on Series A Shares shall be cumulative as follows:

               (1)  With respect to shares included in the initial issue of
                    Series A Shares and shares issued any time thereafter up to
                    and including the record date for the payment of the first
                    dividend on the initial issue of series A Shares, dividends
                    shall be cumulative from the date of the initial issue of
                    Series A Shares; and


                                      -22-



               (2)  With respect to shares issued any time after the aforesaid
                    record date, dividends shall be cumulative from the dividend
                    payment date next preceding the date of issue of such
                    shares, except that if such shares are issued during the
                    period commencing the day after the record date for the
                    payment of a dividend on Series A Shares and ending on the
                    payment date of that dividend, dividends with respect to
                    such shares shall be cumulative from that dividend payment
                    date.

          (d)  Subject to the provisions of Subsection 5(c)(3) of this Division,
               the Series A Shares shall be redeemable in the manner provided in
               Subsections 3(b)(1) and (2) of this Division as follows:

               (1)  Except as provided in clause (2) of this Subsection (d), the
                    Series A Shares may not be redeemed prior to May 31, 1996.
                    At any time or from time to time on and after May 31, 1996,
                    the corporation, at its option, may redeem all or any part
                    of the Series A Shares at a redemption price of $25.00 per
                    share plus, in each case, an amount equal to all dividends
                    accrued and unpaid thereon to the redemption date.

               (2)  Prior to May 31, 1996, the corporation, at its option, may
                    redeem all, but not less than all, of the outstanding Series
                    A Shares if the holders of such shares shall be entitled to
                    vote upon or consent to any amendment, alteration or repeal,
                    whether by merger, consolidation or otherwise, of any of the
                    provisions of the Amended Articles of Incorporation or of
                    the Code of Regulations of the corporation which affects
                    adversely the preferences or voting or other rights of the
                    holders of Series A Shares, as specified under Subsection
                    5(c)(1) of this Division, and all of the following
                    conditions have been satisfied: (a) the corporation shall
                    have requested the vote or consent of the holders of the
                    Series A Shares to such amendment, alteration or repeal,
                    stating in such request that failing the requisite favorable
                    vote or consent the corporation will have the option to
                    redeem such shares, (b) the corporation shall not have
                    received the requisite favorable vote or consent within 60
                    days after making such request (which shall be deemed to
                    have been made upon the mailing of the notice of any meeting
                    of holders of Series A Shares to vote upon such approval or
                    grant such consent) and (c) such amendment, alteration or
                    repeal, whether in connection with a merger, consolidation
                    or otherwise, shall be effected on the date fixed for such
                    redemption, which date shall be no more than one year after
                    such request is made. Any such redemption shall be on notice
                    as aforesaid at a redemption price of 425.00 per Series A
                    Share plus an amount equal to all dividends accrued and
                    unpaid thereon to the redemption date.

          (e)  The amount payable per Series A Share in the event of any
               voluntary or involuntary liquidation, dissolution or winding up
               of the affairs of the corporation shall be $25.00, plus an amount
               equal to all dividends accrued and unpaid thereon to the date of
               payment.


                                      -23-




     IN WITNESS WHEREOF, Peter B. Lewis, President, and David M. Schneider,
Secretary, of The Progressive Corporation, acting for and on its behalf do
hereunto subscribe their names this fourteenth day of May, 1991.

                                            /s/ Peter B. Lewis
                                            --------------------------------
                                            Peter B. Lewis, President

                                            /s/ David M. Schneider
                                            --------------------------------
                                            David M. Schneider, Secretary



                                      -24-




                            CERTIFICATE OF AMENDMENT
                                       TO
                        AMENDED ARTICLES OF INCORPORATION
                                       OF
                           THE PROGRESSIVE CORPORATION

PETER B. LEWIS, President, and DAVID M. SCHNEIDER, Secretary, of The Progressive
Corporation, an Ohio corporation for profit with its principal office at
Mayfield Village, Cuyahoga County, Ohio (the "Company"), do hereby certify that
a meeting of the Shareholders of the Company was duly called and held on
April23, 1993 at which meeting a quorum of the shareholders was present in
person, or by proxy, and by the affirmative vote of the holders of shares
entitling them to exercise a majority of the voting power of the Company on a
proposal to amend the Company's Amended Articles of Incorporation, the following
resolution was adopted:

     RESOLVED, that the first paragraph of Article FOURTH of the Company's
     Amended Articles of Incorporation, which precedes DIVISION A thereof be,
     and the same is, hereby amended and restated in its entirety to provide as
     follows:

          FOURTH. The authorized number of shares of the corporation is
          225,000,000, consisting of 20,000,000 Serial Preferred Shares, without
          par value (hereinafter called "Serial Preferred Shares"), 5,000,000
          Voting Preference Shares, without par value (hereinafter called
          "Voting Preference Shares"), and 200,000 Common Shares, $1.00 par
          value (hereinafter called "Common Shares).

IN WITNESS WHEREOF, Peter B. Lewis, President, and David M. Schneider, Secretary
of The Progressive Corporation, acting for and on its behalf do hereunto
subscribe their names this 23rd day of April, 1993.


                                       /s/ Peter B. Lewis
                                       --------------------------------
                                       Peter B. Lewis, President

                                        /s/ David M. Schneider
                                       --------------------------------
                                       David M. Schneider, Secretary


                                      -25-





                            CERTIFICATE OF AMENDMENT
                                       TO
                        AMENDED ARTICLES OF INCORPORATION
                                       OF
                           THE PROGRESSIVE CORPORATION

DAVID M. SCHNEIDER, Secretary of the Progressive Corporation, an Ohio
corporation for profit with its principal office at Mayfield Village, Cuyahoga
County, Ohio (the "Company"), does hereby certify that a meeting of the
Shareholders of the Company was duly called and held on April 24, 1998, at which
meeting a quorum of the Shareholders was present in person or by proxy, and by
the affirmative vote of the holders of shares entitling them to exercise a
majority of the voting power of the Company on a proposal to amend the Company's
Amended Articles of Incorporation, the following resolution was adopted:

RESOLVED, that the first paragraph of Article FOURTH of the Company's Amended
Articles of Incorporation, which precedes DIVISION A thereof be, and the same
is, hereby amended and restated in its entirety to provide as follows:

     FOURTH. The authorized number of shares of the corporation is 325,000,000,
     consisting of 20,000,000 Serial Preferred Shares, without par value
     (hereinafter called "Serial Preferred Shares"), 5,000,000 Voting Preference
     Shares, without par value (hereinafter called "Voting Preference Shares"),
     and 300,000,000 Common Shares, $1.00 par value (hereinafter called "Common
     Shares").

IN WITNESS WHEREOF, David M. Schneider, Secretary of The Progressive
Corporation, acting for and on behalf of said corporation, does hereunto
subscribe his name this 24th day of April, 1998.

                                          /s/ David M. Schneider
                                          --------------------------------
                                          David M. Schneider, Secretary


                                      -26-




                            CERTIFICATE OF AMENDMENT
                                       TO
                        AMENDED ARTICLES OF INCORPORATION
                                       OF
                           THE PROGRESSIVE CORPORATION


     CHARLES E. JARRETT, Secretary of The Progressive Corporation, an Ohio
corporation for profit with its principal office at Mayfield Village, Cuyahoga
County, Ohio (the "Company"), does hereby certify that a meeting of the
Shareholders of the Company was duly called and held on April 18, 2003, at which
meeting a quorum of the Shareholders was present in person or by proxy, and by
the affirmative vote of the holders of shares entitling them to exercise a
majority of the voting power of the Company on a proposal to amend the Company's
Amended Articles of Incorporation, the following resolution was adopted:

     RESOLVED, that the first paragraph of Article FOURTH of the Company's
     Amended Articles of Incorporation, which precedes DIVISION A thereof be,
     and the same is, hereby amended and restated in its entirety to provide as
     follows:

          Article FOURTH. The authorized number of shares of the corporation is
          625,000,000, consisting of 20,000,000 Serial Preferred Shares, without
          par value (hereinafter called "Serial Preferred Shares"), 5,000,000
          Voting Preference Shares, without par value (hereinafter called
          "Voting Preference Shares"), and 600,000,000 Common Shares, $1.00 par
          value (hereinafter called "Common Shares").

     IN WITNESS WHEREOF, Charles E. Jarrett, Secretary of The Progressive
Corporation, acting for and on behalf of said corporation, does hereunto
subscribe his name this 18th day of April, 2003.



                                            /s/ Charles E. Jarrett
                                            ----------------------------------
                                            Charles E. Jarrett, Secretary





                                      -27-

EX-4.E

                                                                    Exhibit 4(e)

                               CODE OF REGULATIONS

                                       OF

                           THE PROGRESSIVE CORPORATION
                           (as amended April 18, 2003)


                                    ARTICLE I

                            MEETINGS OF SHAREHOLDERS

            Section 1. ANNUAL MEETINGS. The annual meeting of shareholders shall
be held at such time and on such date in the month of April of each year
(beginning in 1972) as may be fixed by the board of directors and stated in the
notice of the meeting, for the election of directors the consideration of
reports to be laid before such meeting and the transaction of such other
business as may properly come before the meeting.

            Section 2. SPECIAL MEETINGS. Special meetings of the shareholders
shall be called upon the written request of the president, the directors by
action at a meeting, a majority of the directors acting without a meeting, or of
the holders of shares entitling them to exercise twenty-five percent (25%) of
the voting power of the corporation entitled to vote thereat. Calls for such
meetings shall specify the time, place, and purposes thereof. No business other
than that specified in the call shall be considered at any special meeting.

            Section 3. NOTICES OF MEETINGS. Unless waived, written notice of
each annual or special meeting stating the time, place, and the purposes
thereof, and the means, if any, by which shareholders can be present and vote at
the meeting through the use of communications equipment, shall be given by
personal delivery, by mail, by overnight delivery service or by any other means
of communication authorized by the shareholder to whom the notice is given, to
each shareholder of record entitled to vote at or entitled to notice of the
meeting, not more than sixty (60) days nor less than seven (7) days before any
such meeting. If mailed or sent by overnight delivery service, such notice shall
be directed to the shareholder at his address as the same appears upon the
records of the corporation. If sent by any other means of communication
authorized by the shareholder, the notice shall be sent to the address furnished
by the shareholder for those transmissions. Any shareholder, either before or
after any meeting, may waive any notice required to be given by law or under
these Regulations.

            Section 4. PLACE OF MEETINGS. Meetings of shareholders shall be held
at the principal office of the corporation unless the board of directors
determines that a meeting shall be held at some other place within or without
the State of Ohio and causes the notice thereof to so state. Notwithstanding the
foregoing, the board of directors may determine that a meeting of shareholders
shall not be held at any physical place, but instead may be held solely by means
of communications equipment as authorized in the following paragraph.


                                       1




         If authorized by the board of directors, the shareholders and
proxyholders who are not physically present at a meeting of shareholders may
attend a meeting of shareholders by use of communications equipment that enables
the shareholder or proxyholder an opportunity to participate in the meeting and
to vote on matters submitted to the shareholders, including an opportunity to
read or hear the proceedings of the meeting and to speak or otherwise
participate in the proceedings contemporaneously with those physically present.
Any shareholder using communications equipment will be deemed present in person
at the meeting, whether the meeting is to be held at a designated place or
solely by means of communications equipment. The directors may adopt guidelines
and procedures for the use of communications equipment in connection with a
meeting of shareholders to permit the corporation to verify that a person is a
shareholder or proxyholder and to maintain a record of any vote or other action.

         Section 5. QUORUM. The holders of shares entitling them to exercise a
majority of the voting power of the corporation entitled to vote at any meeting,
present in person or by proxy, shall constitute a quorum for the transaction of
business to be considered at such meeting; provided, however, that no action
required by law or by the Articles of Incorporation or these Regulations to be
authorized or taken by the holders of a designated proportion of the shares of
any particular class or of each class may be authorized or taken by a lesser
proportion. The holders of a majority of the voting shares represented at a
meeting, whether or not a quorum is present, may adjourn such meeting from time
to time, until a quorum shall be present.

         Section 6. RECORD DATE. The board of directors may fix a record date
for any lawful purpose, including, without limiting the generality of the
foregoing, the determination of shareholders entitled to (i) receive notice of
or to vote at any meeting, (ii) receive payment of any dividend or distribution,
(iii) receive or exercise rights of purchase of or subscription for, or exchange
or conversion of, shares or other securities, subject to any contract right with
respect thereto, or (iv) participate in the execution of written consents,
waivers or releases. Said record date, which shall not be a date earlier than
the date on which the record date is fixed, shall not be more than sixty (60)
days preceding the date of such meeting, the date fixed for the payment of any
dividend or distribution or the date fixed for the receipt or the exercise of
rights, as the case may be.

         If a record date shall not be fixed, the record date for the
determination of shareholders who are entitled to notice of, or who are entitled
to vote at, a meeting of shareholders, shall be the close of business on the
date next preceding the day on which notice is given, or the close of business
on the date next preceding the day on which the meeting is held, as the case may
be.

         Section 7. PROXIES. A person who is entitled to attend a shareholders'
meeting, to vote thereat, or to execute consents, waivers or releases, may be
represented at such meeting or vote thereat, and execute consents, waivers and
releases, and exercise any of his other rights, by proxy or proxies appointed by
a writing signed by such person or appointed by a verifiable communication
authorized by the person.


                                       2




                                   ARTICLE II

                                    DIRECTORS

         Section 1. NUMBER AND CLASSIFICATION OF DIRECTORS. The number of
directors of the corporation, none of whom need to be a shareholder or resident
of the State of Ohio, shall be ten, and such directors shall be divided into
three classes as nearly equal in number as possible, to be known as Class I,
Class II and Class III. The classes shall be elected to staggered terms. The
shareholders, acting by the affirmative vote of the holders of record of shares
representing 75% of the voting power of the corporation on such proposal, may,
from time to time, increase or decrease the number of directors, but in no case
shall the number of directors be fewer than five or more than twelve nor shall
any decrease in the number of directors shorten the term of any director then in
office. In case of any increase in the number of directors, the directors then
in office may select the class or classes to which the additional directors
shall be assigned, provided that the directors shall be distributed among the
several classes as nearly equally as possible.

         Section 2. ELECTION OF DIRECTORS. Directors shall be elected at the
annual meeting of shareholders, but when the annual meeting is not held or
directors are not elected thereat, they may be elected at a special meeting
called and held for that purpose. Such election shall be by ballot whenever
requested by any shareholder entitled to vote at such election; but, unless such
request is made, the election may be conducted in any manner approved at such
meeting.

         At each meeting of shareholders for the election of directors, the
persons receiving the greatest number of votes shall be directors.

         Section 3. TERM OF OFFICE. The term of office for each director shall
be three years and the members of one class of directors shall be elected
annually to serve for such term; except that, initially or whenever necessary, a
director may be elected for a shorter term in order to provide for a proper
rotation of directors. At the 1997 Annual Meeting of Shareholders, Class I
directors shall be elected for a term expiring at the 1998 Annual Meeting of
Shareholders, Class II directors shall be elected for a term expiring at the
1999 Annual Meeting of Shareholders and Class III directors shall be elected for
a term expiring at the 2000 Annual Meeting of Shareholders. Each director shall
hold office until the annual meeting of shareholders coinciding with the
termination of the term of the class of directors to which he or she was elected
and until his or her successor shall be elected and qualified or until his or
her earlier resignation, removal from office or death.

         Section 4. REMOVAL. All directors, or all directors of a particular
class, or any individual director may be removed from office, without assigning
any cause, by the affirmative vote of the holders of record of shares
representing 75% of the voting power of the corporation with respect to the
election of directors, provided that unless all the directors, or all the
directors of a particular class, are removed, no individual director shall be
removed if the votes of a sufficient number of shares are cast against his or
her removal which, if cumulatively voted at an election of all the directors, or
all the directors of a particular class, as the case may be, would be sufficient
to elect at least one director. In case of any such removal, a new director may
be elected at the same meeting for the unexpired term of each director removed.

                                       3




         Section 5. VACANCIES. Vacancies in the board of directors may be filled
for the remainder of the unexpired term by a majority vote of the remaining
directors. The directors appointed to fill such vacancies shall be assigned to
such class or classes as the directors then in office shall determine, provided
that the directors shall be distributed among the several classes as nearly
equally as possible. Any director appointed to fill a vacancy in the board shall
serve until the expiration of the term of the class of directors to which he or
she has been appointed and until his or her successor shall be elected and
qualified.

         Section 6. QUORUM AND TRANSACTION OF BUSINESS. A majority of the whole
authorized number of directors shall constitute a quorum for the transaction of
business, except that a majority of the directors in office shall constitute a
quorum for filling a vacancy on the board. Whenever less than a quorum is
present at the time and place appointed for any meeting of the board, a majority
of those present may adjourn the meeting from time to time, until a quorum shall
be present. The act of a majority of the directors present at a meeting at which
a quorum is present shall be the act of the board.

         Section 7. ANNUAL MEETING. Annual meetings of the board of directors
shall be held immediately following annual meetings of the shareholders, or as
soon thereafter as is practicable. If no annual meeting of the shareholders is
held, or if directors are not elected thereat, then the annual meeting of the
board of directors shall be held immediately following any special meeting of
the shareholders at which directors are elected, or as soon thereafter as is
practicable. If such annual meeting of directors is held immediately following a
meeting of the shareholders, it shall be held at the same place at which such
meeting of shareholders was held.

         Section 8. REGULAR MEETINGS. Regular meetings of the board of directors
shall be held at such times and places, within or without the State of Ohio, as
the board of directors may, by resolution or by-law, from time to time,
determine. The secretary shall give notice of each such resolution or bylaw to
any director who was not present at the time the same was adopted, but no
further notice of such regular meeting need be given.

         Section 9. SPECIAL MEETINGS. Special meetings of the board of directors
may be called by the chairman of the board or the president to be held at such
times and places within or without the State of Ohio as the person calling such
meeting shall specify. In addition, any two members of the board of directors
may call special meetings of the board of directors to be held at the principal
office of the corporation at such times as they may specify.

         Section 10. NOTICE OF ANNUAL OR SPECIAL MEETINGS. Notice of the time
and place of each annual or special meeting shall be given to each director by
the secretary or by the person or persons calling such meeting. Such notice need
not specify the purpose or purposes of the meeting and may be given in any
manner or method and at such time so that the director receiving it may have
reasonable opportunity to attend the meeting. Such notice shall, in all events,
be deemed to have been properly and duly given if mailed at least forty-eight
(48) hours prior to the meeting and directed to the residence of each director
as shown upon the secretary's records. The giving of notice shall be deemed to
have been waived by any director who shall attend and participate in such
meeting and may be waived, in a writing, by any director either before or after


                                       4




such meeting.

         Section 11. COMPENSATION. The directors, as such, shall be entitled to
receive such reasonable compensation for their services as may be fixed from
time to time by resolution of the board, and expenses of attendance, if any, may
be allowed for attendance of each annual, regular or special meeting of the
board. Nothing herein contained shall be construed to preclude any director from
serving the corporation in any other capacity and receiving compensation
therefor. Members of the executive committee or of any standing or special
committee may by resolution of the board be allowed such compensation for their
services as the board may deem reasonable, and additional compensation may be
allowed to directors for special services rendered.

         Section 12. BY-LAWS. For the government of its actions, the board of
directors may adopt by-laws consistent with the Articles of Incorporation and
these Regulations.

         Section 13. NOTIFICATION OF NOMINATIONS. Subject to the rights of the
holders of any class or series of stock of the corporation having a preference
over the Common Shares as to dividends or upon liquidation to elect directors
under specified circumstances, nominations for the election of directors may be
made only by the Board of Directors or a committee of the Board of Directors or,
subject to this Section 13, by any shareholder of record entitled to vote in the
election of directors generally. A shareholder of record entitled to vote in the
election of directors generally may nominate one or more persons for election as
directors at a meeting of shareholders only if written notice of such
shareholder's intent to make such nomination or nominations has been given,
either by personal delivery or by United States mail, postage prepaid, to the
Secretary of the corporation and has been received by the Secretary of the
corporation on or before the following dates, as applicable: (i) with respect to
an election to be held at an annual meeting of shareholders, 60 days in advance
of such meeting, or (ii) with respect to an election to be held at a special
meeting of shareholders, the close of business on the tenth day following the
date on which notice of such meeting is first given to shareholders. For
purposes of this Section 13, notice shall be deemed to be first given to
shareholders when disclosure of such date is first made in a press release
reported by the Dow Jones News Services, Associated Press or comparable national
news service or in a document publicly filed by the corporation with the
Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the
Securities Exchange Act of 1934, as amended.

         Each such notice shall set forth:

         (a) the name and address of the shareholder who intends to make the
nomination or nominations;

         (b) a representation that the shareholder is a holder of record of
shares of the corporation entitled to vote at such meeting and intends to appear
in person or by proxy at the meeting to nominate the person or persons specified
in the notice;

         (c) the name, address and principal occupation or employment of each
person to be so nominated;


                                       5



         (d) a description of all arrangements or understandings between the
shareholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the shareholder; and

         (e) such other information regarding each nominee proposed by such
shareholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission, as then
in effect, had the nominee been nominated, or intended to be nominated, by the
Board of Directors.

         To be effective, each notice of intent to make a nomination given
hereunder must be accompanied by the written consent of each such nominee to
serve as a director of the corporation if elected.

         The presiding officer at the meeting may refuse to acknowledge the
nomination of any person or persons not made in compliance with the provisions
hereof and may declare at such meeting that any such nomination was not properly
brought before the meeting and shall not be considered.


                                   ARTICLE III

                                   COMMITTEES

         Section 1. EXECUTIVE COMMITTEE. The board of directors may from time to
time, by resolution passed by a majority of the whole board, create an executive
committee of three or more directors, the members of which shall be elected by
the board of directors to serve during the pleasure of the board. If the board
of directors does not designate a chairman of the executive committee, the
executive committee shall elect a chairman from its own number. Except as
otherwise provided herein and in the resolution creating an executive committee,
such committee shall, during the intervals between the meetings of the board of
directors, possess and may exercise all of the powers of the board of directors
in the management of the business and affairs of the corporation, other than
that of filling vacancies among the directors or in any committee of the
directors. The executive committee shall keep full records and accounts of its
proceedings and transactions. All action by the executive committee shall be
reported to the board of directors at its meeting next succeeding such action
and shall be subject to control, revision and alteration by the board of
directors, provided that no rights of third persons shall be prejudicially
affected thereby. Vacancies in the executive committee shall be filled by the
directors, and the directors may appoint one or more directors as alternate
members of the committee who may take the place of any absent member or members
at any meeting.

         Section 2. MEETINGS OF EXECUTIVE COMMITTEE. Subject to the provisions
of these Regulations, the executive committee shall fix its own rules of
procedure and shall meet as provided by such rules or by resolutions of the
board of directors, and it shall also meet at the call of the president, the
chairman of the executive committee or any two members of the committee. Unless
otherwise provided by such rules or by such resolutions, the provisions of
Section 10 of Article II relating to the notice required to be given of meetings
of the board of directors shall also


                                       6




apply to meetings of the executive committee. A majority of the executive
committee shall be necessary to constitute a quorum. The executive committee may
act in a writing, or by telephone with written confirmation, without a meeting,
but no such action of the executive committee shall be effective unless
concurred in by all members of the committee.

         Section 3. OTHER COMMITTEES. The board of directors may by resolution
provide for such other standing or special committees as it deems desirable, and
discontinue the same at pleasure. Each such committee shall have such powers and
perform such duties, not inconsistent with law, as may be delegated to it by the
board of directors. The provisions of Section 1 and Section 2 of this Article
shall govern the appointment and action of such committees so far as consistent,
unless otherwise provided by the board of directors. Vacancies in such
committees shall be filled by the board of directors or as the board of
directors may provide.


                                   ARTICLE IV

                                    OFFICERS

         Section 1. GENERAL PROVISIONS. The board of directors shall elect a
president, such number of vice presidents as the board may from time to time
determine, a secretary and a treasurer and, in its discretion, a chairman of the
board of directors. The board of directors may from time to time create such
offices and appoint such other officers, subordinate officers and assistant
officers as it may determine. The president, any vice president who succeeds to
the office of the president, and the chairman of the board shall be, but the
other officers need not be, chosen from among the members of the board of
directors. Any two of such offices, other than that of president and vice
president, may be held by the same person, but no officer shall execute,
acknowledge or verify any instrument in more than one capacity.

         Section 2. TERM OF OFFICE. The officers of the corporation shall hold
office during the pleasure of the board of directors, and, unless sooner removed
by the board of directors, until the organization meeting of the board of
directors following the date of their election and until their successors are
chosen and qualified. The board of directors may remove any officer at any time,
with or without cause. A vacancy in any office, however created, shall be filled
by the board of directors.


                                    ARTICLE V

                               DUTIES OF OFFICERS

         Section 1. CHAIRMAN OF THE BOARD. The chairman of the board, if one be
elected, shall preside at all meetings of the board of directors and shall have
such other powers and duties as may be prescribed by the board of directors.

         Section 2. PRESIDENT. The president shall be the chief executive
officer of the corporation and shall exercise supervision over the business of
the corporation and over its several officers,


                                       7




subject, however, to the control of the board of directors. He shall preside at
all meetings of shareholders, and, in the absence of the chairman of the board,
or if a chairman of the board shall not have been elected, shall also preside at
meetings of the board of directors. He shall have authority to sign all
certificates for shares and all deeds, mortgages, bonds, agreements, notes, and
other instruments requiring his signature; and shall have all the powers and
duties prescribed by Chapter 1701 of the Revised Code of Ohio and such others as
the board of directors may from time to time assign to him.

         Section 3. VICE PRESIDENTS. The vice presidents shall have such powers
and duties as may from time to time be assigned to them by the board of
directors or the president. At the request of the president, or in the case of
his absence or disability, the vice president designated by the president (or in
the absence of such designation, the vice president designated by the board)
shall perform all the duties of the president and, when so acting, shall have
all the powers of the president. The authority of vice presidents to sign in the
name of the corporation certificates for shares and deeds, mortgages, bonds,
agreements, notes and other instruments shall be coordinate with like authority
of the president.

         Section 4. SECRETARY. The secretary shall keep minutes of all the
proceedings of the shareholders and board of directors and shall make proper
record of the same, which shall be attested by him; shall have authority to sign
all certificates for shares and all deeds, mortgages, bonds, agreements, notes,
and other instruments executed by the corporation requiring his signature; shall
give notice of meetings of shareholders and directors; shall produce on request
at each meeting of shareholders a certified list of shareholders arranged in
alphabetical order; shall keep such books as may be required by the board of
directors; and shall have such other powers and duties as may from time to time
be assigned to him by the board of directors or the president.

         Section 5. TREASURER. The treasurer shall have general supervision of
all finances; he shall receive and have in charge all money, bills, notes,
deeds, leases, mortgages and similar property belonging to the corporation, and
shall do with the same as may from time to time be required by the board of
directors. He shall cause to be kept adequate and correct accounts of the
business transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, stated capital and shares,
together with such other accounts as may be required, and upon the expiration of
his term of office shall turn over to his successor or to the board of directors
all property, books, papers and money of the corporation in his hands; and shall
have such other powers and duties as may from time to time be assigned to him by
the board of directors or the president.

         Section 6. ASSISTANT AND SUBORDINATE OFFICERS. The board of directors
may appoint such assistant and subordinate officers as it may deem desirable.
Each such officer shall hold office during the pleasure of the board of
directors, and perform such duties as the board of directors or the president
may prescribe.

         The board of directors may, from time to time, authorize any officer to
appoint and remove subordinate officers, to prescribe their authority and
duties, and to fix their compensation.


                                       8




         Section 7. DUTIES OF OFFICERS MAY BE DELEGATED. In the absence of any
officer of the corporation, or for any other reason the board of directors may
deem sufficient, the board of directors may delegate, for the time being, the
powers or duties, or any of them, of such officers to any other officer or to
any director.


                                   ARTICLE VI

                          INDEMNIFICATION AND INSURANCE

         Section 1. INDEMNIFICATION. The corporation shall indemnify each
director, officer and employee and each former director, officer and employee of
the corporation, and each person who is serving or has served at its request as
a director, officer or employee of another corporation, against expenses,
judgements, decrees, fines, penalties or amounts paid in settlement in
connection with the defense of any past, pending or threatened action, suit or
proceeding, criminal or civil, to which he was, is or may be made a party by
reason of being or having been such director, officer or employee, provided a
determination is made (i) by the directors of the corporation acting at a
meeting at which a quorum consisting of directors who neither were nor are
parties to or threatened with any such action, suit or proceeding is present, or
(ii) by the shareholders of the corporation at a meeting held for such purpose
by the affirmative vote of the holders of shares entitling them to exercise a
majority of the voting power of the corporation on such proposal or without a
meeting by the written consent of the holders of shares entitling them to
exercise two-thirds of the voting power on such proposal, that (a) such
director, officer or employee was not, and has not been adjudicated to have
been, negligent or guilty of misconduct in the performance of his duty to the
corporation of which he is or was a director, officer or employee, (b) he acted
in good faith in what he reasonably believed to be the best interest of such
corporation, and (c) in any matter the subject of a criminal action, suit or
proceeding, he had no reasonable cause to believe that his conduct was unlawful.

         Expenses of each person indemnified hereunder incurred in defending a
civil, criminal, administrative or investigative action, suit or proceeding
(including all appeals) or threat thereof, may be paid by the corporation in
advance of the final disposition of such action, suit or proceeding as
authorized by the board of directors, whether a disinterested quorum exists or
not, upon receipt of an undertaking by or on behalf of the director, officer or
employee to repay such expenses unless it shall ultimately be determined that he
is entitled to be indemnified by the corporation.

         The foregoing rights of indemnification shall not be deemed exclusive
of, or in any way to limit, any other rights to which any person indemnified may
be, or may become, entitled apart from the provisions of this Article VI.

         Section 2. LIABILITY INSURANCE. The corporation may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or designated agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or designated agent
of another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity, or arising out


                                       9




of his status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this Article or of
Chapter 1701 of the Ohio Revised Code.


                                   ARTICLE VII

                             CERTIFICATES FOR SHARES

         Section 1. FORM AND EXECUTION. Certificates for shares, certifying the
number of full-paid shares owned, shall be issued to each shareholder in such
form as shall be approved by the board of directors. Such certificates shall be
signed by the president or a vice president and by the secretary or an assistant
secretary or the treasurer or an assistant treasurer; provided however, that if
such certificates are countersigned by a transfer agent and/or registrar the
signatures of any of said officers and the seal of the corporation upon such
certificates may be facsimiles, engraved, stamped or printed. If any officer or
officers, who shall have signed, or whose facsimile signature shall have been
used, printed or stamped on any certificate or certificates for shares, shall
cease to be such officer or officers, because of death, resignation or
otherwise, before such certificate or certificates shall have been delivered by
the corporation, such certificate or certificates, if authenticated by the
endorsement thereon of the signature of a transfer agent or registrar, shall
nevertheless be conclusively deemed to have been adopted by the corporation by
the use and delivery thereof and shall be as effective in all respects as though
signed by a duly elected, qualified and authorized officer or officers, and as
though the person or persons who signed such certificate or certificates, or
whose facsimile signature or signatures shall have been used thereon, had not
ceased to be an officer or officers of the corporation.

         Section 2. REGISTRATION OF TRANSFER. Any certificate for shares of the
corporation shall be transferable in person or by attorney upon the surrender
thereof to the corporation or any transfer agent therefor (for the class of
shares represented by the certificate surrendered of a certificate), properly
endorsed for transfer and accompanied by such assurances as the corporation or
such transfer agent may require as to the genuineness and effectiveness of each
necessary endorsement.

         Section 3. LOST, DESTROYED OR STOLEN CERTIFICATES. A new share
certificate or certificates may be issued in place of any certificate
theretofore issued by the corporation which is alleged to have been lost,
destroyed or wrongfully taken upon (i) the execution and delivery to the
corporation by the person claiming the certificate to have been lost, destroyed
or wrongfully taken of an affidavit of that fact, specifying whether or not, at
the time of such alleged loss, destruction or taking, the certificate was
endorsed, and (ii) the furnishing to the corporation of indemnity and other
assurances satisfactory to the corporation and to all transfer agents and
registrars of the class of shares represented by the certificate against any and
all losses, damages, costs, expenses or liabilities to which they or any of them
may be subjected by reason of the issue and delivery of such new certificate or
certificates or in respect of the original certificate.

         Section 4. REGISTERED SHAREHOLDERS. A person in whose name shares are
of record on the books of the corporation shall conclusively be deemed the
unqualified owner and holder thereof for all purposes and to have capacity to
exercise all rights of ownership. Neither the corporation


                                       10




nor any transfer agent of the corporation shall be bound to recognize any
equitable interest in or claim to such shares on the part of any other person,
whether disclosed upon such certificate or otherwise, nor shall they be obliged
to see to the execution of any trust or obligation.


                                  ARTICLE VIII

                                   FISCAL YEAR

         The fiscal year of the corporation shall end on the 31st day of
December in each year, or on such other date as may be fixed from time to time
by the board of directors.


                                   ARTICLE IX

                                      SEAL

         The board of directors may provide a suitable seal containing the name
of the corporation. If deemed advisable by the board of directors, duplicate
seals may be provided and kept for the purposes of the corporation.


                                    ARTICLE X

                                   AMENDMENTS

         These Regulations may be amended or repealed at any meeting of
shareholders called for that purpose by the affirmative vote of the holders of
record of shares entitling them to exercise a majority of the voting power of
the corporation with respect to such proposal, except that the affirmative vote
of the holders of record of shares representing 75% of the voting power of the
corporation with respect to any such proposal shall be required to amend, alter,
change or repeal Sections 1, 3, 4, 5 or 13 of Article II or this Article X.



                                       11

EX-5

                                                                       Exhibit 5


                                 April 21, 2003

The Progressive Corporation
6300 Wilson Mills Road
Mayfield Village, OH  44143

         Re:      Common Shares issuable under The Progressive Corporation 2003
         Incentive Plan

Gentlemen:

     We have acted as counsel to The Progressive Corporation, an Ohio
corporation (the "Company"), in connection with its Registration Statement on
Form S-8 (the "Registration Statement") filed under the Securities Act of 1933,
as amended, relating to the offering of up to 5,000,000 Common Shares, $1.00 par
value (the "Common Shares"), of the Company pursuant to the Company's 2003
Incentive Plan (the "Plan").

     In connection with the foregoing, we have examined (a) the Amended Articles
of Incorporation, as amended, and the Code of Regulations of the Company, (b)
the Plan, and (c) such records of the corporate proceedings of the Company and
such other documents as we deem necessary to render this opinion.

     Based on such examination, we are of the opinion that:

     1. The Company is a corporation duly organized and validly existing under
     the laws of the State of Ohio.

     2. The Common Shares available for issuance under the Plan, when issued and
     sold pursuant to the Plan, will be legally issued, fully paid and
     nonassessable.

     We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.

                                            Very truly yours,


                                            Baker & Hostetler LLP

EX-23.A

                                                                   Exhibit 23(a)







                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 22, 2003 relating to the
consolidated financial statements, which appear in the 2002 Annual Report to
Shareholders of The Progressive Corporation (the "Company"), which is included
as an Appendix to the Company's 2003 Proxy Statement, which report and
consolidated financial statements are incorporated by reference in the Annual
Report on Form 10-K. We also consent to the incorporation by reference of our
report dated January 22, 2003 relating to the financial statement schedules,
which appear in such Annual Report on Form 10-K.


/s/ PRICEWATERHOUSECOOPERS, L.L.P.


Cleveland, Ohio
April 21, 2003

EX-24.A

                                                                   Exhibit 24(a)

                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M.
Coffey, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, to affix for him and in his name,
place and stead, in any and all capacities, as attorney-in-fact and agent, his
signature to a Registration Statement on Form S-8 or other form in order to
register under the Securities Act of 1933, as amended, up to 5,000,000 of the
Company's Common Shares, $1.00 par value, issuable under The Progressive
Corporation 2003 Incentive Plan, and to any and all amendments, post-effective
amendments and exhibits to such Registration Statement, and to any and all
applications, instruments and other documents pertaining thereto, giving and
granting unto each such attorney-in-fact and agent full power and authority to
do and perform any and all acts and things whatsoever necessary or appropriate
to be done in and about the premises, as fully for all intents and purposes as
he might or could do if personally present, and hereby ratifying and confirming
all that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.




Date:    April 7, 2003                  /s/ Jeffrey W. Basch
                                        -----------------------
                                        Jeffrey W. Basch
                                        Vice President and Chief Accounting
                                        Officer








                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M.
Coffey, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, to affix for him and in his name,
place and stead, in any and all capacities, as attorney-in-fact and agent, his
signature to a Registration Statement on Form S-8 or other form in order to
register under the Securities Act of 1933, as amended, up to 5,000,000 of the
Company's Common Shares, $1.00 par value, issuable under The Progressive
Corporation 2003 Incentive Plan, and to any and all amendments, post-effective
amendments and exhibits to such Registration Statement, and to any and all
applications, instruments and other documents pertaining thereto, giving and
granting unto each such attorney-in-fact and agent full power and authority to
do and perform any and all acts and things whatsoever necessary or appropriate
to be done in and about the premises, as fully for all intents and purposes as
he might or could do if personally present, and hereby ratifying and confirming
all that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.




Date:    April 7, 2003               /s/ W. Thomas Forrester
                                     -------------------------------------
                                     W. Thomas Forrester
                                     Vice President and Chief Financial Officer








                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer and
director of The Progressive Corporation, an Ohio corporation (the "Company"),
has made, constituted and appointed, and by this instrument does make,
constitute and appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and
David M. Coffey, and each of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, to affix for him and
in his name, place and stead, in any and all capacities, as attorney-in-fact and
agent, his signature to a Registration Statement on Form S-8 or other form in
order to register under the Securities Act of 1933, as amended, up to 5,000,000
of the Company's Common Shares, $1.00 par value, issuable under The Progressive
Corporation 2003 Incentive Plan, and to any and all amendments, post-effective
amendments and exhibits to such Registration Statement, and to any and all
applications, instruments and other documents pertaining thereto, giving and
granting unto each such attorney-in-fact and agent full power and authority to
do and perform any and all acts and things whatsoever necessary or appropriate
to be done in and about the premises, as fully for all intents and purposes as
he might or could do if personally present, and hereby ratifying and confirming
all that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.




Date:    April 7, 2003               /s/ Glenn M. Renwick
                                     -----------------------------
                                     Glenn M. Renwick
                                     Director, Chief Executive Officer and
                                     President






                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M.
Coffey, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, to affix for him and in his name,
place and stead, in any and all capacities, as attorney-in-fact and agent, his
signature to a Registration Statement on Form S-8 or other form in order to
register under the Securities Act of 1933, as amended, up to 5,000,000 of the
Company's Common Shares, $1.00 par value, issuable under The Progressive
Corporation 2003 Incentive Plan, and to any and all amendments, post-effective
amendments and exhibits to such Registration Statement, and to any and all
applications, instruments and other documents pertaining thereto, giving and
granting unto each such attorney-in-fact and agent full power and authority to
do and perform any and all acts and things whatsoever necessary or appropriate
to be done in and about the premises, as fully for all intents and purposes as
he might or could do if personally present, and hereby ratifying and confirming
all that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.




Date:    April 4, 2003               /s/ Milton N. Allen
                                     ----------------------------
                                     Milton N. Allen
                                     Director






                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M.
Coffey, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, to affix for him and in his name,
place and stead, in any and all capacities, as attorney-in-fact and agent, his
signature to a Registration Statement on Form S-8 or other form in order to
register under the Securities Act of 1933, as amended, up to 5,000,000 of the
Company's Common Shares, $1.00 par value, issuable under The Progressive
Corporation 2003 Incentive Plan, and to any and all amendments, post-effective
amendments and exhibits to such Registration Statement, and to any and all
applications, instruments and other documents pertaining thereto, giving and
granting unto each such attorney-in-fact and agent full power and authority to
do and perform any and all acts and things whatsoever necessary or appropriate
to be done in and about the premises, as fully for all intents and purposes as
he might or could do if personally present, and hereby ratifying and confirming
all that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.




Date:    April 7, 2003               /s/ B. Charles Ames
                                     --------------------
                                     B. Charles Ames
                                     Director





                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M.
Coffey, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, to affix for him and in his name,
place and stead, in any and all capacities, as attorney-in-fact and agent, his
signature to a Registration Statement on Form S-8 or other form in order to
register under the Securities Act of 1933, as amended, up to 5,000,000 of the
Company's Common Shares, $1.00 par value, issuable under The Progressive
Corporation 2003 Incentive Plan, and to any and all amendments, post-effective
amendments and exhibits to such Registration Statement, and to any and all
applications, instruments and other documents pertaining thereto, giving and
granting unto each such attorney-in-fact and agent full power and authority to
do and perform any and all acts and things whatsoever necessary or appropriate
to be done in and about the premises, as fully for all intents and purposes as
he might or could do if personally present, and hereby ratifying and confirming
all that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.




Date:    April 7, 2003               /s/ Charles A. Davis
                                     ---------------------
                                     Charles A. Davis
                                     Director







                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M.
Coffey, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, to affix for him and in his name,
place and stead, in any and all capacities, as attorney-in-fact and agent, his
signature to a Registration Statement on Form S-8 or other form in order to
register under the Securities Act of 1933, as amended, up to 5,000,000 of the
Company's Common Shares, $1.00 par value, issuable under The Progressive
Corporation 2003 Incentive Plan, and to any and all amendments, post-effective
amendments and exhibits to such Registration Statement, and to any and all
applications, instruments and other documents pertaining thereto, giving and
granting unto each such attorney-in-fact and agent full power and authority to
do and perform any and all acts and things whatsoever necessary or appropriate
to be done in and about the premises, as fully for all intents and purposes as
he might or could do if personally present, and hereby ratifying and confirming
all that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.




Date:    April 4, 2003               /s/ Stephen R. Hardis
                                     ---------------------
                                     Stephen R. Hardis
                                     Director






                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M.
Coffey, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, to affix for him and in his name,
place and stead, in any and all capacities, as attorney-in-fact and agent, his
signature to a Registration Statement on Form S-8 or other form in order to
register under the Securities Act of 1933, as amended, up to 5,000,000 of the
Company's Common Shares, $1.00 par value, issuable under The Progressive
Corporation 2003 Incentive Plan, and to any and all amendments, post-effective
amendments and exhibits to such Registration Statement, and to any and all
applications, instruments and other documents pertaining thereto, giving and
granting unto each such attorney-in-fact and agent full power and authority to
do and perform any and all acts and things whatsoever necessary or appropriate
to be done in and about the premises, as fully for all intents and purposes as
he might or could do if personally present, and hereby ratifying and confirming
all that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.




Date:    April 6, 2003                /s/ Bernadine P. Healy
                                      ----------------------
                                      Bernadine P. Healy
                                      Director






                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M.
Coffey, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, to affix for him and in his name,
place and stead, in any and all capacities, as attorney-in-fact and agent, his
signature to a Registration Statement on Form S-8 or other form in order to
register under the Securities Act of 1933, as amended, up to 5,000,000 of the
Company's Common Shares, $1.00 par value, issuable under The Progressive
Corporation 2003 Incentive Plan, and to any and all amendments, post-effective
amendments and exhibits to such Registration Statement, and to any and all
applications, instruments and other documents pertaining thereto, giving and
granting unto each such attorney-in-fact and agent full power and authority to
do and perform any and all acts and things whatsoever necessary or appropriate
to be done in and about the premises, as fully for all intents and purposes as
he might or could do if personally present, and hereby ratifying and confirming
all that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.




Date:    April 7, 2003                /s/ Jeffrey D. Kelly
                                      --------------------
                                      Jeffrey D. Kelly
                                      Director






                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M.
Coffey, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, to affix for him and in his name,
place and stead, in any and all capacities, as attorney-in-fact and agent, his
signature to a Registration Statement on Form S-8 or other form in order to
register under the Securities Act of 1933, as amended, up to 5,000,000 of the
Company's Common Shares, $1.00 par value, issuable under The Progressive
Corporation 2003 Incentive Plan, and to any and all amendments, post-effective
amendments and exhibits to such Registration Statement, and to any and all
applications, instruments and other documents pertaining thereto, giving and
granting unto each such attorney-in-fact and agent full power and authority to
do and perform any and all acts and things whatsoever necessary or appropriate
to be done in and about the premises, as fully for all intents and purposes as
he might or could do if personally present, and hereby ratifying and confirming
all that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.




Date:    April 4, 2003                /s/ Philip A. Laskawy
                                      ------------------------------------
                                      Philip A. Laskawy
                                      Director






                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer and
director of The Progressive Corporation, an Ohio corporation (the "Company"),
has made, constituted and appointed, and by this instrument does make,
constitute and appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and
David M. Coffey, and each of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, to affix for him and
in his name, place and stead, in any and all capacities, as attorney-in-fact and
agent, his signature to a Registration Statement on Form S-8 or other form in
order to register under the Securities Act of 1933, as amended, up to 5,000,000
of the Company's Common Shares, $1.00 par value, issuable under The Progressive
Corporation 2003 Incentive Plan, and to any and all amendments, post-effective
amendments and exhibits to such Registration Statement, and to any and all
applications, instruments and other documents pertaining thereto, giving and
granting unto each such attorney-in-fact and agent full power and authority to
do and perform any and all acts and things whatsoever necessary or appropriate
to be done in and about the premises, as fully for all intents and purposes as
he might or could do if personally present, and hereby ratifying and confirming
all that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.




Date:    April 7, 2003                /s/ Peter B. Lewis
                                      ------------------
                                      Peter B. Lewis
                                      Chairman of the Board and Director






                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M.
Coffey, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, to affix for him and in his name,
place and stead, in any and all capacities, as attorney-in-fact and agent, his
signature to a Registration Statement on Form S-8 or other form in order to
register under the Securities Act of 1933, as amended, up to 5,000,000 of the
Company's Common Shares, $1.00 par value, issuable under The Progressive
Corporation 2003 Incentive Plan, and to any and all amendments, post-effective
amendments and exhibits to such Registration Statement, and to any and all
applications, instruments and other documents pertaining thereto, giving and
granting unto each such attorney-in-fact and agent full power and authority to
do and perform any and all acts and things whatsoever necessary or appropriate
to be done in and about the premises, as fully for all intents and purposes as
he might or could do if personally present, and hereby ratifying and confirming
all that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.




Date:    April 7, 2003                /s/ Norman S. Matthews
                                      ------------------------
                                      Norman S. Matthews
                                      Director





                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Charles E. Jarrett, Dane A. Shrallow, Michael R. Uth and David M.
Coffey, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, to affix for him and in his name,
place and stead, in any and all capacities, as attorney-in-fact and agent, his
signature to a Registration Statement on Form S-8 or other form in order to
register under the Securities Act of 1933, as amended, up to 5,000,000 of the
Company's Common Shares, $1.00 par value, issuable under The Progressive
Corporation 2003 Incentive Plan, and to any and all amendments, post-effective
amendments and exhibits to such Registration Statement, and to any and all
applications, instruments and other documents pertaining thereto, giving and
granting unto each such attorney-in-fact and agent full power and authority to
do and perform any and all acts and things whatsoever necessary or appropriate
to be done in and about the premises, as fully for all intents and purposes as
he might or could do if personally present, and hereby ratifying and confirming
all that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.




Date:    April 6, 2003                /s/ Donald B. Shackelford
                                      -------------------------
                                      Donald B. Shackelford
                                      Director

EX-24.B

                                                                   Exhibit 24(b)


                           THE PROGRESSIVE CORPORATION
                               2003 INCENTIVE PLAN
                          CERTIFIED COPY OF RESOLUTIONS


     RESOLVED, that The Progressive Corporation (the "Company") hereby approves
and adopts The Progressive Corporation 2003 Incentive Plan, in form attached
hereto as Exhibit A (the "Plan"), subject to approval by the holders of the
Company's Common Shares, $1 par value ("Shareholders"); and

     FURTHER RESOLVED, that the Plan be submitted to the Shareholders for
approval at the 2003 Annual Meeting of Shareholders; and

     FURTHER RESOLVED, that the Company reserve 5,000,000 Common Shares for
issuance pursuant to Restricted Stock or Stock Option awards which may hereafter
be granted under the Plan, which amount may be further increased by the Board of
Directors, from time to time, in its sole discretion, subject to any necessary
approval by Shareholders; and

     FURTHER RESOLVED, that the President, any Vice President, the Treasurer and
the Secretary of the Company be, and each of them with full power to act without
the others is, hereby authorized and directed to prepare, or cause to be
prepared, and to execute and file or cause to be executed and filed with the
Securities and Exchange Commission (the "Commission"), under the Securities Act
of 1933, as amended (the "Act"), for and on behalf of the Company, a
Registration Statement on Form S-8 (which, together with the related Prospectus
and all exhibits and other documents relating thereto, is herein referred to as
the "Registration Statement") with respect to the registration of the additional
Common Shares of the Company hereinabove authorized for issuance under the Plan
and any related derivative or other securities (including, without limitation,
Restricted Stock and Stock Options) (the "Plan Securities"), with such changes
(including, but not limited to, changes of a substantive nature) as any such
officer or officers shall approve, which approval shall be shown conclusively by
the execution of the Registration Statement by or on behalf of any such officer
or officers; and

     FURTHER RESOLVED, that the President, any Vice President, the Treasurer and
the Secretary of the Company be, and each of them with full power to act without
the others is, hereby authorized and empowered, for and on behalf of the
Company, to prepare or cause to be prepared and to execute such amendments and
supplements to the Registration Statement as they, or any of them, may deem
necessary or desirable, or as may be required by the Commission; to cause such
amendments and supplements, when duly executed (if required), to be filed with
the Commission; and to do all such other acts and things and to execute all such
other documents as they, or any of them, deem necessary or desirable in order to
cause the Registration Statement to comply with the Act and the rules and
regulations promulgated by the


                                       1




Commission pursuant thereto (the "Rules and Regulations"), and to become
effective under the Act and the Rules and Regulations; and

     FURTHER RESOLVED, that when the Registration Statement has become
effective, the President, any Vice President, the Treasurer and the Secretary of
the Company be, and each of them with full power to act without the others is,
hereby authorized and empowered, for and on behalf of the Company, to execute
and deliver any and all instruments, certificates and/or other documents, and to
do any and all acts and things, as may be necessary or appropriate in connection
with the issuance of Plan Securities under the Plan; and

     FURTHER RESOLVED, that Charles E. Jarrett, or such other individual as the
Compensation Committee of the Board of Directors may designate in his stead, is
hereby named as the person authorized to receive service of all notices, orders,
communications and other documents which may be issued or sent by the Commission
in connection with the Registration Statement and any and all amendments and
supplements thereto, with all the powers consequent upon such designation under
the Rules and Regulations; and

     FURTHER RESOLVED, that any director or officer of the Company required by
law to affix his or her signature to the Registration Statement and any and all
amendments and supplements thereto may affix his or her signature personally, or
by any attorney-in-fact, duly constituted in writing by said director or officer
to sign his or her name thereto; and

     FURTHER RESOLVED, that Jeffrey W. Basch, David M. Coffey, W. Thomas
Forrester, Charles E. Jarrett, Dane A. Shrallow and Glenn M. Renwick be, and
each of them hereby is, appointed as the attorney-in-fact and agent of the
Company, with full power of substitution and resubstitution, for and in the
name, place and stead of the Company, to sign, attest and file the Registration
Statement, and any and all amendments or supplements to the Registration
Statement and any and all applications or other documents to be filed with the
Commission and any and all applications or other documents to be filed with any
governmental or private agency or official relative to the issuance of the Plan
Securities, with full power and authority to do and perform any and all acts and
things whatsoever requisite and necessary to be done in the premises, hereby
ratifying and approving the acts of such attorneys-in-fact or any such
substitute or substitutes and, without implied limitation, including in the
above the authority to do the foregoing things on behalf of the Company in the
name of the person so acting or on behalf and in the name of any duly authorized
officer of the Company; and the President, any Vice President, the Treasurer and
the Secretary be, and each hereby is, authorized and empowered for and on behalf
of the Company to execute a Power of Attorney evidencing the foregoing
appointment; and

     FURTHER RESOLVED, that Jeffrey W. Basch, David M. Coffey, W. Thomas
Forrester, Charles E. Jarrett, Glenn M. Renwick and Dane A. Shrallow be, and
each of them with full power to act without the others is, hereby authorized and
empowered to sign the Registration Statement and any and all amendments and
supplements to the Registration Statement, on behalf of and as attorneys-in-fact
for the principal executive officer, principal accounting officer,


                                       2




principal financial officer or any other officer of the Company, including,
without limitation, the President, any Vice President, the Treasurer and the
Secretary, and on behalf of and as attorneys for each director of the Company;
and

     FURTHER RESOLVED, that each of the officers of the Company and its
attorneys, Messrs. David M. Coffey, Suzanne M. Hanselman, R. Steven Kestner,
Charles E. Jarrett and Dane A. Shrallow, be, and each of them with full power to
act without the others is, hereby authorized and empowered to appear on behalf
of the Company before the Commission in connection with any and all matters
relating to the Registration Statement and all amendments and supplements
thereto; and

     FURTHER RESOLVED, that the President, any Vice President, the Treasurer and
the Secretary of the Company be, and each of them with full power to act without
the others is, hereby authorized and empowered, in the name and on behalf of the
Company, to take any and all action which they, or any of them, deem necessary
or advisable in order to obtain a permit to issue Plan Securities, or to
register or qualify the Plan Securities for issuance, or to request an exemption
from registration of the Plan Securities, or to register or obtain a license for
the Company as a dealer or broker, under the securities laws of such states of
the United States of America and of such foreign jurisdictions as any such
officer or officers may deem advisable, and in connection with such
registrations, permits, licenses, qualifications and exemptions to execute,
acknowledge, verify, deliver, file and publish or cause to be published all such
applications, reports, resolutions, surety bonds, consents to service of
process, appointments of attorneys to receive service of process, powers of
attorney and other papers and instruments, and to take any and all further
action, which they, or any of them, may deem necessary or advisable in order to
maintain such registration or qualification in effect for as long as they may
deem to be in the best interests of this Company or as required by law; and that
the execution by such officer or officers of any such document or the taking of
any such action in connection with the foregoing matters shall be deemed to be
conclusive evidence that such officer or officers deem(s) the taking of any such
action to be necessary or proper and in the best interests of the Company and
approves such action; and

     FURTHER RESOLVED, that the Common Shares of the Company to be issued
pursuant to and in accordance with the terms and provisions of the Plan and the
Registration Statement, shall be duly authorized and issued, fully paid and
non-assessable Common Shares of the Company, free of any shareholder preemptive
rights; and

     RESOLVED, that the preparation, execution and filing with the New York
Stock Exchange of a Listing Application or a Supplemental Listing Application
(including all exhibits and supporting material) to list the 5,000,000 Common
Shares to be issued under the Plan be, and it hereby is, in all respects
authorized and approved; and that the officers of the Company and its attorneys,
Messrs. David M. Coffey, Suzanne M. Hanselman, Charles E. Jarrett, R. Steven
Kestner and Dane A. Shrallow, be, and each of them is, hereby authorized and
empowered, at such time as to them shall seem advisable, to make application for
such listing and, in connection therewith, to execute, in the name and on behalf
of the Company, and under


                                       3




its corporate seal or otherwise, and to file or deliver, all such applications,
statements, certificates, agreements and other instruments and documents as
shall be necessary or desirable to accomplish such listing; and that such
officers and attorneys be, and each of them hereby is, authorized to appear on
behalf of the Company before the appropriate committee or body of the New York
Stock Exchange, Inc., as such appearance may be required, with authority to make
such changes in any such Listing Application as shall be presented thereto and
in any agreements that may be made in connection therewith as, in their or his
discretion, may be necessary to comply with the requirements for such listing;
and

     FURTHER RESOLVED, that the authority of National City Bank ("NCB"), as
transfer agent and registrar for the Company's outstanding Common Shares, be,
and it hereby is, extended to include the original issue and the transfer and
registration from time to time of the additional Common Shares to be issued
under the Plan, as herein authorized; and

     FURTHER RESOLVED, that for the purpose of the original issue of Common
Shares by the Company under the Plan as aforesaid, NCB, as transfer agent and
registrar for the Common Shares, be, and is hereby, authorized and directed to
(i) countersign as such transfer agent by manual or facsimile signature stock
certificates for the Common Shares to be so issued by the Company when such
certificates shall be delivered to such transfer agent duly executed on behalf
of the Company, (ii) procure as registrar of the Common Shares the registration
of such certificates, and (iii) deliver such certificates, when so countersigned
and registered, to or upon the order of the persons entitled thereto as set
forth in the order or orders of the Company for the issuance of the Common
Shares; and

     FURTHER RESOLVED, that the Board of Directors of the Company hereby adopts
and incorporates by reference any form of specific resolution to carry into
effect the purpose and intent of the foregoing resolutions, or covering
authority included in matters authorized in the foregoing resolutions, including
forms of resolutions in connection therewith that may be required by the
Commission, the National Association of Securities Dealers, Inc., the New York
Stock Exchange and any state, institution, person or agency, and the Secretary
of the Company is hereby directed to insert a copy thereof in the minute book of
the Company following the minutes of this meeting and certify the same as having
been duly adopted thereby; and

     FURTHER RESOLVED, that the Compensation Committee of the Board be, and it
hereby is, authorized and directed, for and on behalf of the Company to
administer the Plan in accordance with its terms, to interpret the Plan and make
all determinations thereunder, to adopt, alter and repeal such rules, guidelines
and practices governing the Plan as it shall deem advisable from time to time
and to otherwise exercise all of the powers and authority granted to such
Committee under the Plan; and

     FURTHER RESOLVED, that the President, any Vice President, the Treasurer and
the Secretary of the Company be, and each of them with full power to act without
the others is, hereby authorized and empowered to do or cause to be done all
such acts or things, to cause to be paid all necessary fees and expenses, and to
make, execute and deliver, or cause to be made,


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executed and delivered, all such agreements, documents, instruments and
certificates, in the name of and on behalf of the Company or otherwise, as they
or any of them may deem necessary, advisable or appropriate to effectuate or
carry out the purposes and intent of the foregoing resolutions; and

     FURTHER RESOLVED, that any and all actions heretofore or hereafter taken by
any officer or officers of the Company within the terms of the foregoing
resolutions be and are hereby ratified and confirmed as the authorized acts and
deeds of the Company.

I, Charles E. Jarrett, do hereby certify that I am the duly elected, qualified
and acting Secretary of The Progressive Corporation, an Ohio corporation (the
"Company"); that I have custody of the official records of the Company; and that
the foregoing is a true, correct, and complete copy of the resolutions duly
adopted at a meeting of the Board of Directors on the 31st day of January, 2003;
and that said resolutions are valid and binding, and have not been amended,
modified or rescinded, and are in full force and effect on the date hereof.


IN WITNESS WHEREOF, I have hereunto set my hand as such Secretary and affixed
the seal of the Company on the 21st day of April, 2003.


                                            /s/ Charles E. Jarrett
                                            -----------------------------------
         SEAL                               Charles E. Jarrett



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