Organization

The Nominating and Governance Committee
(the "Committee"), appointed by the Board of Directors
(the "Board") of The Progressive Corporation
(the "Company"), shall consist of at least three Directors including the Chairperson. Each member of the Committee shall be independent of the management of the Company (as defined by the listing Standards of the New York Stock Exchange) and free of any relationship that, in the opinion of the Board, would interfere with his or her exercise of independent judgment as a Committee member. Committee members will be appointed annually, and may be removed at any time, by the Board.

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Statement of Purpose

The purposes of the Committee are: to act as the executive search component of the Board for identifying, evaluating and recruiting qualified potential new Board members; in conjunction with the Chairman, to lead the Board in its annual review of the Board’s performance and to ensure the effective evaluation of existing Board member performance; to oversee the Board’s evaluation of the Chief Executive Officer ("CEO") and other executive managers of the Company; to report to the Board on CEO succession planning; to recommend to the Board for selection the director nominees for the next annual meeting of shareholders; to recommend appropriate committee and chairperson assignments for Directors; and to assess the Company’s corporate governance effectiveness and develop and recommend changes as may be appropriate to the Company’s Corporate Governance Guidelines. In furtherance of its purposes, the Committee shall be authorized, as it deems necessary or appropriate, to engage or consult with legal counsel, consultants and other outside advisors, which engagements and consultations shall be paid for by the Company.

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Responsibilities of the Committee

The Committee shall:

1.

Periodically assess the appropriate size of the Board in view of the Board’s then-current needs;

 

 

2.

Determine the need for new Directors and define relevant qualifications;

 

 

3.

Lead the search for, interview and screen potential Board candidates and recommend for selection new director candidates to the full Board;

 

 

4.

Receive nominations for Board membership from shareholders, review and evaluate the qualifications of such nominees and report and make recommendations to the Board with respect to such nominees;

 

 

5.

Have the sole authority to retain and terminate any search firm to be used to identify director candidates, including the authority to approve the search firm’s fees and other retention terms;

 

 

6.

Recommend director nominees for selection for the next annual meeting of shareholders and committee chairperson assignments annually (and at other times, when necessary) to the Board;

 

 

7.

Make initial determinations of the independence of individual Directors and Board candidates, and make recommendations, based on such determinations, to the Board;

 

 

8.

In conjunction with the Chairman, lead the Board’s self-evaluation process assessing the performance of the Board and its committees, and the performance of each Director on the following criteria:

a.

participation value, meaning active participation and demonstrated contribution at the Board and committee levels;

 

 

b.

guards shareholder interests;

 

 

c.

preparation level;

 

 

d.

attendance, including punctuality;

 

 

e.

chemistry with management;

 

 

f.

chemistry with other Directors;

 

 

g.

relevant knowledge and experience;

 

 

h.

extent of contacts/network relevant to the Company;

 

 

i.

financial literacy and accounting or financial management expertise;

 

 

j.

character and integrity;

 

 

k.

support to the CEO; and

 

 

l.

judgment and effectiveness in decision-making.

 

 

 

 

9.

Ensure that, when the Company has a non-executive Chairman, the full Board evaluates the non-executive Chairman on the following criteria:

a.

leading the Board in setting expectations and standards for its own performance;

 

 

b.

providing direction and leadership for the Board;

 

 

c.

focus on relevant issues;

 

 

d.

meeting efficiency;

 

 

e.

quality and timeliness of agendas and materials to read in advance of the meeting;

 

 

f.

fostering Board member participation, chemistry and performance and creating a participatory atmosphere;

 

 

g.

adequate support to the CEO as a sounding Board on operational, strategic and organizational issues; and

 

 

h.

willingness to accept suggestions for improvement.

 

 

 

 

10. 

Establish standards to determine Director independence and recommend such standards to the Board for approval;

 

 

11. 

Periodically review and assess the adequacy of the Company’s Corporate Governance Guidelines and Director Independence Standards and develop and recommend changes to the Board as necessary;

 

 

12. 

Review and assess annually its own performance and the adequacy of this Charter and recommend any proposed changes to the Board for approval;

 

 

13. 

Oversee the Board’s annual evaluation of the CEO and its periodic reviews of the performance of other executive managers of the Company, to ensure that such evaluations and reviews are performed in a timely and thorough manner and in accordance with the Company’s Corporate Governance Guidelines;

 

 

14. 

Ensure that the Board discusses CEO succession planning on at least an annual basis;

 

 

15. 

Make regular reports to the Board on the Committee’s activities; and

 

 

16. 

Have the authority, in furtherance of the foregoing, to delegate any one or more responsibilities of the Committee to one or more subcommittees.

 

 

The following are the Company’s definitions of the fundamental criteria for selecting and evaluating Directors:

1) INTEGRITY for a Director requires total honesty and total openness at meetings about his or her own viewpoint based on his or her own knowledge and experience (vs. a lawyer's, a board consensus or the easy way), and having no undisclosed self-interested dealings with the Company.

2) JUDGMENT for a Director requires having an open mind, being able to separate personalities from issues, keeping confidential that which should be confidential, supporting premises with actual experiences and doing nothing to harm the Company.

3) COMMITMENT for a Director must be financial and emotional. A Director’s personal financial investment (excluding unexpired options) in the Company should be a meaningful amount to that Director. Emotional commitment involves managing emotions so as not to disrupt discussions, maintaining a sense of humor, but remaining willing and able to "cross swords" with any other Director to express a strongly held point of view.

4) PREPARATION for a Director requires reading, questioning and understanding the information provided about the Company and industry, getting to know each other and senior managers and being accessible by e-mail.

5) PARTICIPATION for a Director requires active involvement in Board, committee and appropriate other meetings, getting to know key managers personally, being open and candid in both the evaluation process and the annual review of the Company's Vision, Value Statement and Strategies.

6) CONTRIBUTION for a Director requires making comments that sharpen issues; being available to, supportive of and responsive to the CEO or other members of senior management when called upon for advice and counsel; taking the initiative to have one-on-one sessions with key managers; and adding insight, ideas and experience in Board and committee deliberations and in interactions with management.