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[FORM OF FACE OF REGISTERED DEBT SECURITY]
NO. R $____________
CUSIP 743315 AD 5
SEE REVERSE FOR CERTAIN
DEFINITIONS
THE PROGRESSIVE CORPORATION
10-1/8% SUBORDINATED NOTE DUE DECEMBER 15, 2000
THE PROGRESSIVE CORPORATION, an Ohio corporation (the
"Issuer"), for value received, hereby promises to pay to
___________________________________ or registered assigns, at the office or
agency of the Issuer at the office of the Trustee in Providence, Rhode Island,
the principal sum of __________________ Dollars on December 15, 2000, in such
coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts, and to pay
interest semiannually on June 15 and December 15 of each year, commencing June
15, 1989, on said principal sum at said office or agency, in like coin or
currency, at the rate per annum specified in the title of this Note, from the
June 15 or the December 15, as the case may be, next preceding the date of this
Note to which interest has been paid, unless the date hereof is a date to which
interest has been paid, in which case from the date of this Note, or unless no
interest has been paid on these Notes, in which case from December 15, 1988,
until payment of said principal sum has been made or duly provided for;
PROVIDED, that payment of interest may be made at the option of the Issuer by
check mailed to the address of the person entitled thereto as such address
shall appear on the Security Register. Notwithstanding the foregoing, if the
date hereof is after the first day of June or December, as the case may be, and
before the following June 15 or December 15, this Note shall bear interest from
such June 15 or December 15; PROVIDED, that if the Issuer shall default in the
payment of interest due on such June 15 or December 15, then this Note shall
bear interest from the next preceding June 15 or December 15 to which interest
has been paid or, if no interest has been paid on these Notes, from December
15, 1988. The interest so payable on any June 15 or December 15 will, subject
to certain exceptions provided in the Indenture referred to on the reverse
hereof, be paid to the person in whose name this Note is registered at the
close of business on the June 1 or December 1, as the case may be, next
preceding such June 15 or December 15.
Reference is made to the further provisions of this Note set
forth on the reverse hereof. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
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This Note shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by the
Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, The Progressive Corporation has caused this
instrument to be signed by facsimile by its duly authorized officers and has
caused a facsimile of its corporate seal to be affixed hereunto or imprinted
hereon.
Dated:
THE PROGRESSIVE CORPORATION
Attest: By /s/ Peter B. Lewis
--------------------------------
President and Chief Executive
/s/ David M. Schneider Officer
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Secretary
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities, of the series designated herein,
referred to in the within-mentioned Indenture.
Rhode Island Hospital Trust
National Bank, as Trustee
By.................................
Authorized Signatory
[FORM OF REVERSE OF DEBT SECURITY]
THE PROGRESSIVE CORPORATION
10-1/8% SUBORDINATED NOTE DUE DECEMBER 15, 2000
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This Note is one of a duly authorized issue of debentures, notes,
bonds or other evidences of indebtedness of the Issuer (hereinafter called the
"Securities") of the series hereinafter specified, all issued or to be issued
under and pursuant to an indenture dated as of November 15, 1988 (herein called
the "Indenture"), duly executed and delivered by the Issuer to Rhode Island
Hospital Trust National Bank, as Trustee (herein called the "Trustee"), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Issuer and the holders of
the Securities. The Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may
be subject to different redemption provisions (if any), may be subject to
different sinking, purchase or analogous funds (if any) and may otherwise vary
as in the Indenture provided. This Note is one of a series designated as the
10-1/8% Subordinated Note Due December 15, 2000 of the Issuer, limited in
aggregate principal amount to $150,000,000.
In case an Event of Default with respect to the 10-1/8% Subordinated
Notes Due December 15, 2000, as defined in the Indenture, shall have occurred
and be continuing, the principal hereof may be declared, and upon such
declaration shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.
This Note is subordinated to all existing and future Senior
Indebtedness (as defined in the Indenture) of the Issuer. To the extent and in
the manner provided in the Indenture, Senior Indebtedness must be paid before
any payment may be made to any Holders of Securities of any series. Any
Securityholder by accepting this Note agrees to the subordination and
authorizes the Trustee to give it effect.
In addition to all other rights of Senior Indebtedness described in
the Indenture, the Senior Indebtedness shall continue to be Senior Indebtedness
and entitled to the benefits of the subordination provisions irrespective of
any amendment, modification or waiver of any term of any instrument relating to
the Senior Indebtedness or extension or renewal of the Senior Indebtedness.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of not less than 66-2/3% in aggregate
principal amount of the Securities at the time Outstanding (as defined in the
Indenture) of all series to be affected (voting as one class), evidenced as in
the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or modifying in any manner the
rights of the Holders of the Securities of each such series; PROVIDED HOWEVER,
that no such supplemental indenture shall (i) extend the final maturity of any
Security, or reduce the principal amount thereof or any premium thereon, or
reduce the rate or extend the time of payment of any interest thereon, or
impair or affect the rights of any Holder to institute suit for the payment
thereof, or make any change in the subordination provisions that adversely
affects the rights of any Holder, in each case, without the consent of the
Holder of each Security so affected or (ii) reduce the aforesaid percentage of
Securities, the Holders of which are required to consent to any such
supplemental indenture, without the consent of the Holder of each Security
affected. It is also provided in the Indenture
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that, with respect to certain defaults or Events of Default regarding the
Securities of any series, prior to any declaration accelerating the maturity of
such Securities, the Holders of a majority in aggregate principal amount
Outstanding of the Securities of such series (or, in the case of certain
defaults or Events of Default, all or certain series of the Securities) may on
behalf of the Holders of all the Securities of such series (or all or certain
series of the Securities, as the case may be) waive any such past default or
Event of Default and its consequences. The preceding sentence shall not,
however, apply to a default in the payment of the principal of or premium, if
any, or interest on any of the Securities. Any such consent or waiver by the
Holder of this Note (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of this Note and any Note which may be issued in exchange or substitution
herefor, irrespective of whether or not any notation thereof is made upon this
Note or such other Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
in the manner, at the respective times, at the rate and in the coin or currency
herein prescribed.
The Notes are issuable in registered form without coupons in
denominations of $1,000 and any integral multiples of $1,000 at the office or
agency of the Issuer at the office of the Trustee in Providence, Rhode Island,
and in the manner and subject to the limitations provided in the Indenture, but
without the payment of any service charge, Notes may be exchanged for a like
aggregate principal amount of Notes of other authorized denominations.
The Notes are not subject to redemption at the option of the Issuer or
through the operation of a sinking fund.
Upon due presentment for registration of transfer of this Note at the
office or agency of the Issuer or at the office of the Trustee in Providence,
Rhode Island, a new Note or Notes of authorized denominations for an equal
aggregate principal amount will be issued to the transferee in exchange
therefor, subject to the limitations provided in the Indenture, without charge
except for any tax or other governmental charge imposed in connection
therewith.
The Issuer, the Trustee and any authorized agent of the Issuer or the
Trustee may deem and treat the registered Holder hereof as the absolute owner
of this Note (whether or not this Note shall be overdue and notwithstanding any
notation of ownership or other writing hereon), for the purpose of receiving
payment of, or on account of, the principal hereof and, subject to the
provisions on the face hereof, interest hereon, and for
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all other purposes, and neither the Issuer nor the Trustee nor any authorized
agent of the Issuer or the Trustee shall be affected by any notice to the
contrary.
No recourse under or upon any obligation, covenant or agreement of the
Issuer in the Indenture or any indenture supplemental thereto or in any Note,
or because of the creation of any indebtedness represented thereby, shall be
had against any incorporator, shareholder, officer or director, as such, of the
Issuer or of any successor corporation, either directly or through the Issuer
or any successor corporation, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable
proceeding or otherwise, all such liability being expressly waived and released
by the acceptance hereof and as part of the consideration for the issue hereof.
Terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.
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