THE PROGRESSIVE CORPORATION (NYSE:PGR) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

(e) At a meeting held on February 17, 2017, the Board of Directors (the “Board”) of The Progressive Corporation (the “Company”) adopted The Progressive Corporation 2017 Directors Equity Incentive Plan (the “2017 Directors Plan”), a copy of which is attached hereto as Exhibit 10.1. The 2017 Directors Plan remains subject to approval by the Company’s shareholders. If so approved, this new plan would permit the Compensation Committee of the Board (the “Committee”) to provide equity-based compensation to the Company’s non-employee directors in the form of restricted stock, non-qualified stock options, stock in lieu of cash compensation, restricted stock units, stock appreciation rights, and dividend equivalents. The 2017 Directors Plan would reserve 500,000 of our common shares for issuance under the plan, subject to adjustment as provided in the plan. The 2017 Directors Plan, by its terms, would remain in effect until May 31, 2022. The 2017 Directors Plan will be submitted to shareholders for approval at our Annual Meeting of Shareholders in May 2017. Accordingly, our 2017 Proxy Statement will include a detailed summary of this plan.

In addition, the Board adopted, subject to shareholder approval, The Progressive Corporation 2017 Executive Annual Incentive Plan (the “Executive Plan”), which will replace the 2007 Executive Bonus Plan. The Executive Plan, which is attached hereto as Exhibit 10.2, permits the granting of annual cash incentive awards to executive officers and other employees of the Company, including awards that are intended to qualify for the exemption for “performance-based compensation” from the $1 million cap on the deductibility of compensation under Section 162(m) of the Internal Revenue Code. The Executive Plan will be submitted to shareholders for approval at our Annual Meeting of Shareholders in May 2017. Accordingly, our 2017 Proxy Statement will include a detailed summary of this plan.

The Committee has granted annual incentive awards for 2017 under the Executive Plan, subject to shareholder approval, in the form of the agreement attached hereto as Exhibit 10.3. The 2017 awards will be based on a Gainshare Factor substantially similar to bonus awards granted to our executive officers in 2015 under the 2007 Executive Bonus Plan and described in our proxy statement dated March 25, 2016 (the “2016 Proxy Statement”), except that the results of our Property business, with minor exclusions, will be included along with the results of our Agency Auto, Direct Auto, special lines, and Commercial Lines businesses. The results of each business unit will be weighted by the percentage of the business unit’s contribution to our annual net earned premium.

At a meeting held on February 15, 2017, the Committee approved the ARX Holding Corp. 2017 Gainsharing Plan (the “ARX Plan”), to which John Auer, the President and CEO of ARX Holding Corp. (“ARX”), a majority-owned subsidiary of the Company, and other