EXHIBIT 10

 

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Thomas J. Wilson

 

 

President & Chief Executive Officer

 

 

The Allstate Corporation

 

 

 

 

September 9, 2007

 

 

Michele C. Mayes

155 East 31st Street

Apt. 15F

New York, New York 10016

 

Dear Michele:

 

We are excited about the prospect of you joining the Allstate team. The purpose
of this letter is to officially extend to you an offer to join Allstate as
Senior Vice President and Chief Legal Officer. The terms and conditions of this
offer are briefly outlined below and are contingent upon successful completion
of your pre-employment drug test and background check and the approval of
Allstate’s Compensation & Succession Committee and Board of Directors.

 

We are pleased to offer you an excellent compensation and benefits package, the
most important elements of which are outlined below. We’ve designed this
compensation package at a substantially higher level and more upside than your
Pitney Bowes package and to align with our overall senior management team
compensation structure. I think you will conclude that our offer is generous and
comprehensive and addresses all major compensation and benefit issues.

 

Compensation

 

Our offer includes a total compensation package with target annual compensation
of $2.310M and a maximum annual potential of $3.780M. The compensation package
is comprised of an annual salary, annual cash bonus, and a long-term incentive
plan that is comprised of equity and cash.

 

Your annual base compensation will be $525,000 ($43,750 per month) and will be
paid bi-weekly. Subsequent increases in base salary will be dependent on your
performance and approval of the Compensation and Succession committee of the
Board.

 

Annual Cash Incentive Compensation

 

In our Annual Incentive Program, you will be eligible for an annual cash
incentive award targeted at 70% of your base salary, with a range of 0% to 210%
of base. Individual incentive awards are designed to reward results for
corporate and business unit performance. Your first opportunity to receive an
award will be in March of 2008, based upon 2007 corporate and business unit
performance. For 2007, your incentive award will be guaranteed at target in the
amount of $367,500.

 

Allstate Insurance Company
2775 Sanders Road, Northbrook, IL 60062 847-402-8388 twilson@allstate.com

 

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Michele C. Mayes

September 9, 2007

Confidential

 

Long-Term Incentive Compensation Opportunity

 

The long-term incentive compensation opportunity is targeted at 270% of your
base salary. Long-term incentive compensation includes both cash and equity
components.

 

The cash portion is paid annually and targeted at 70% of base salary, with a
range of 0 to 210% of base, depending on company performance. You will be
eligible for the 2007-2009 long-term cash performance cycle. Consequently, your
annual payments would begin in March, 2010, depending on the attainment of
performance goals. If you terminate with the company due to retirement,
long-term incentive payments will be paid through all eligible cycles. For other
terminations, long-term incentive payments will cease.

 

Additionally, subject to the terms and conditions of The Allstate Corporation
Amended and Restated 2001 Equity Incentive Plan, you will be eligible for
long-term incentive awards in the form of stock options and restricted share
units, targeted at 200% of your base salary. Using a valuation formula, options
are generally awarded annually at the fair market value of the common stock on
the date of grant with the approval of the Allstate Board of Directors. The
options generally have a 10-year duration and vest ratably over a four-year
period commencing one year from the date of grant. The restricted stock units,
which are based on market value at the time of grant, convert in one installment
four years from grant and pay a regular quarterly dividend in cash. Upon
approval of the grant, management is provided with the opportunity to apply
discretion to the award formula.

 

New Hire Long-Term Incentive Award - Equity

 

A substantial equity package of cash, stock options and restricted stock units
will be granted to you on the effective date of your hire that has a current
value of approximately $2.575M (based on a $54.00 stock price). You will be
awarded $100,000 in cash, 100,000 stock options and 12,500 restricted share
units. The options have a ten-year life and will vest in four equal installments
on the grant anniversary. The exercise price will be the fair market value on
the date of grant. The restricted stock units, which are based on market value
at the time of grant and pay a regular quarterly dividend in cash, convert in
two installments. The first installment of 6,250 restricted stock units will
convert at two years from grant and the second installment of 6,250 restricted
stock units will convert in four years from grant.

 

Relocation Assistance

 

You will be eligible for a relocation package, which includes certain benefits
related to home sale assistance, finding and purchasing a home in your new
location, and the packing and moving of your household goods. In addition, a
lump sum payment of $75,000 to cover travel, lodging and meals for home finding,
temporary living, return trips, and your final move trip as well as a relocation
allowance to help with some of the expenses not covered under the policy are
part of the relocation package. You will receive a call from Allstate’s
relocation representatives who will provide complete details on the relocation
benefits available to you and who will provide relocation assistance.

 

Vacation and Holidays

 

Allstate provides a Paid Time Off (PTO) bank to employees. You will be eligible
for up to 30 days of PTO on an annual basis. The PTO bank can be used for
vacation, personal matters, family illness and illness not covered by the
short-term disability (STD) plan and is intended to provide you with additional
flexibility in planning your professional and personal life. In addition to PTO

 

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Michele C. Mayes

September 9, 2007

Confidential

 

days, you will receive Company holidays and miscellaneous time off for events
such as a funeral, jury duty, and emergencies. For 2007, your PTO bank will be
pro-rated based on date of hire.

 

Employee Benefits

 

You will have the opportunity to participate, subject to the express terms and
conditions of the respective plans, in a comprehensive package of benefit plans,
designed in a “cafeteria” format, that acknowledge the value Allstate places on
choice, flexibility and the diverse needs of our employees. The following are
offered in the Allstate cafeteria plan: Medical, Dental, Vision, Employee Life
Insurance, Dependent Life Insurance, Accidental Death and Dismemberment (AD&D)
Insurance, Long Term Disability (LTD) Insurance, Health Care Flexible Spending
Account, Dependent Care Flexible Spending Account, Buying PTO Days, and a Group
Legal Plan. Additionally, as a senior management team officer, you will be
entitled to a car allowance, personal tax preparation, financial planning,
executive physicals, and a competitive and comprehensive Change of Control
agreement. A complete benefits package will be sent to you for your review,
additionally, you can visit our career website at www.allstate.jobs.

 

You will also have the opportunity to participate in the Allstate Retirement
Plan and The Allstate Savings and Profit Sharing Fund of Allstate Employees
(Profit Sharing Fund) subject to the Plans’ terms and conditions. The Allstate
Retirement Plan is a pension plan that is funded by Allstate and provides
benefits at your retirement based on compensation and years of service with
Allstate under a cash balance formula.(1) The Profit Sharing Fund allows
eligible employees to make pre- and after-tax deposits to their Profit Sharing
Fund accounts. Participants may be eligible for a Company contribution on
pre-tax deposits of up to 5% of eligible compensation. The minimum amount the
Company will contribute annually is 50 cents for each dollar of eligible pre-tax
deposits and the maximum is $1.00 for those participants eligible to receive a
management bonus. All Company contributions are made in the form of Allstate
stock.

 

Michele, we look forward to you joining us. We know you will make an important
contribution to Allstate and enjoy a challenging and rewarding career in the
process. We want you to be a part of our success and share in the rewards.

 

We are delighted to extend this offer to you, and we look forward to a favorable
reply. To confirm your acceptance of this offer of employment with Allstate
subject to its policies, please sign and date this letter and return it via fax
to Amber Kennelly at (847) 402-9696.

 

 

Sincerely,

 

 

 

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(1) (1) You will also accrue a nonqualified pension benefit equal to the
difference between (i) the sum of the benefit owed to you under the Allstate
Retirement Plan — Cash Balance Benefit (“ARP”) and the Supplemental Retirement
Income Plan (“SRIP”), and (ii) the benefit that would be payable to you under
the ARP and SRIP, assuming Pay Credits had been calculated from your date of
employment at a rate applicable for an employee with 25 years of Vesting
Service.

(2) This Pension Enhancement Benefit is to be paid in a lump sum, 6 months
following the date of separation from service.

(3) Interest during the 6 month period following separation from service will be
paid in accordance with the interest crediting provisions for mandatory delayed
payments under the SRIP and will be paid concurrent with the Pension Enhancement
Benefit.

(4) This Pension Enhancement Benefit is payable upon death without a six-month
delay in payment.

 

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Michele C. Mayes

September 9, 2007

Confidential

 

ACCEPTED AND AGREED:

 

 

 

 

 

Name:

Michele C. Mayes

 

 

 

 

Signature:

/s/ Michele C. Mayes

 

 

 

 

Date:

9/9/07

 

 

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