Exhibit 10.2


 


 


THE ALLSTATE CORPORATION


 


DEFERRED COMPENSATION PLAN


 


AMENDED AND RESTATED AS OF


 


July 31, 2009


 

















 


ARTICLE I


DESIGNATION OF PLAN AND DEFINITIONS


 


1.1                                TITLE AND
PURPOSE


 


(a)                     Title. 
This Plan shall be known as “The Allstate Corporation Deferred
Compensation Plan.”


 


(b)                    Purpose. 
This Plan was established by The Allstate Corporation for the purpose of
providing deferred compensation for eligible employees.  The Plan is intended to be an unfunded plan
maintained for a select group of management or highly compensated employees
within the meaning of the Employee Retirement Income Security Act of 1974 (“ERISA”).  With respect to amounts deferred on or after January 1,
2005, this Plan is intended to be a nonqualified deferred compensation plan
maintained in conformity with the requirements of Internal Revenue Code Section 409A
and shall be interpreted accordingly.


 


(c)                     Effective Date and Plan History.  The Plan was adopted by Allstate Insurance
Company effective January 1, 1995. 
The Plan was amended and restated by the Company, effective January 1,
1996, November 11, 1997, September 1, 1999, November 1, 2000, November 1,
2001, June 1, 2002, October 7, 2002, May 28, 2004, and December 31,
2008.  The Plan was further amended and
restated by the Company, effective July 31, 2009.  The terms of this Plan are effective for all
benefits under the Plan that are not fully distributed as of January 1,
2005, except that actions taken on or after January 1, 2005 and prior to December 31,
2008, are subject to the terms of the then existing Plan and, as applicable, a
reasonable and good faith interpretation of Code Section 409A and the
transition guidance provided thereunder.


 


1.2                                GENERAL
DEFINITIONS


 


Unless expressly stated otherwise, the following definitions will
apply:


 


(a)                     “Account” shall mean nominal bookkeeping
entries made to state the balance of a Participant’s benefit under the
Plan.  A Participant’s benefit under the
Plan shall be comprised of the total of all sub-accounts, which may include a
Pre-2005 Sub-


 


Page 2

















 


Account and Post-2004 Sub-Account.  “Account” shall also mean any amounts
deferred by a Participant, as adjusted for earnings and debits, under The
Allstate Corporation Deferred Compensation Plan for Employee Agents and The
Allstate Corporation Deferred Compensation Plan for Independent Contractor
Exclusive Agents.


 


(b)                    “Beneficiary” or “Contingent Beneficiary”
shall mean the person or persons last designated in writing by the Participant
to the Committee, in accordance with Section 8.4 of this Plan.


 


(c)                     “Board” shall mean the Board
of Directors of the Company.


 


(d)                    “Code” shall mean the Internal Revenue
Code of 1986, as amended from time to time, including regulations and guidance
of general applicability issued thereunder.


 


(e)                     “Committee” shall mean the Committee
appointed by the Board of Directors pursuant to Article VI of this Plan,
and shall mean those persons to whom the Committee has delegated administrative
duties pursuant to Section 6.1(g).


 


(f)                       “Company” shall
mean The Allstate Corporation.


 


(g)                    “Compensation” shall mean all of the
items included in the term “Annual Compensation” as that term is defined in the
Allstate Retirement Plan without regard to the annual compensation limit imposed
by Code Section 401(a)(17).


 


(h)                    “Compensation Floor” shall be the
compensation limit in effect pursuant to Code Section 401(a)(17) for a
Plan Year.


 


(i)                        “Controlled Group” shall mean any
corporation or other business entity which is included in a controlled group of
corporations, within the meaning of section 1563(a)(i) of the Code, within
which the Company is also included.


 


(j)                        “Current Plan Year” shall mean the Plan
Year in which amounts are deferred pursuant to a valid deferral election, in
accordance with Section 2.2.


 


(k)                     “Eligible Compensation” shall mean the
greater of (i) an Employee’s projected 
Compensation based on his or her Compensation for the month ending on December 31
of the Prior Plan Year, annualized in such manner as the Committee shall
determine; (ii) an Employee’s projected annualized base salary based on
his or 


 


Page 3

















 


her Compensation for the month ending on December 31
of the Prior Plan Year, annualized in such manner as the Committee shall
determine; or (iii) an Employee’s Compensation for the calendar year two
years before a Plan Year.  For purposes
of this definition, “Compensation” shall not include any bonus amounts paid on
a monthly, quarterly or other nonannual basis.


 


(l)                        “Eligible Employee” shall mean any
Employee who the Committee determines shall be eligible to participate in the
Plan and whose (i) Eligible Salary is expected to exceed the Compensation
Floor, or (ii) Eligible Compensation is expected to exceed the Compensation
Floor for the Plan Year and, therefore, is eligible to make a deferral under Article II
of this Plan.


 


(m)                  “Eligible Salary” shall mean
an Employee’s base salary during the Prior Plan Year annualized in such manner
as the Committee shall determine, plus any bonus amounts paid on a monthly,
quarterly or other nonannual basis included as Compensation during the Prior
Plan Year up through the date the Employee’s eligibility is determined, as set
forth by the Committee.


 


(n)                    “Employee” shall mean any
regular, full-time employee of the Employer, but shall in no event include
persons classified as agents.  If a
person is not considered to be an “Employee” for purposes of Plan eligibility,
a later change in the person’s status, even if the change in status is
applicable to prior years, will not have a retroactive effect for Plan
purposes.


 


(o)                    “Employer” shall mean the Company,
Allstate Insurance Company, Allstate New Jersey Insurance Company, Allstate
Bank and any other entity within the Controlled Group that adopts the terms of
the Plan, as agreed to by the entity’s Board of Directors, with the approval of
the Committee.


 


(p)                    “Hardship” shall apply only to a
Participant’s Pre-2005 Sub-Account and shall mean the occurrence of a
distribution that satisfies the requirements of Code section 401(k)(2)(B)(i)(IV) from
a tax-qualified plan maintained by an Employer, with the approval of the
Committee.


 


(q)                    “Incentive” shall mean the amount
actually payable to a Participant under an annual cash incentive program sponsored
by the employer.  An Incentive earned
during a Plan Year becomes payable in the calendar year next following the Plan
Year.  Any 


 


Page 4

















 


bonus amounts earned for periods of less
than 12 months or that are payable to a Participant on a monthly, quarterly or
any other nonannual basis under any cash incentive or award program shall not
be considered an Incentive under this Plan.


 


(r)                       “Investment” shall mean the elections
made by Participants, as allowed for in Section 4.3 of the Plan, to
allocate and reallocate deferrals and Account balances among the Investment
Options described in Section 4.3(b), together with accruals and
adjustments reflecting the hypothetical experience of the Investment Options.


 


(s)                     “Participant” shall mean an Eligible
Employee who has an Account balance in the Plan.


 


(t)                       “Plan” shall mean The Allstate
Corporation Deferred Compensation Plan as set forth herein, and as amended from
time to time in accordance with Article VII hereof.


 


(u)                    “Plan Year” shall mean the fiscal year of
the Company, which is a calendar year.


 


(v)                    “Post-2004 Sub-Account” shall mean a
nominal bookkeeping sub-account of the Participant’s Account established to
state the balance of (i) Compensation deferred by a Participant under the
Plan on or after January 1, 2005, as adjusted pursuant to Article IV
of the Plan, (ii) any cash amounts automatically directed to this Plan on
or after January 1, 2005 by action of the Board of Directors of The
Allstate Corporation or a committee thereof; and (iii) earnings and losses
on amounts contributed pursuant to (i) and (ii) of this subsection,
pursuant to Article IV.  “Post-2004
Sub-Account shall refer to the total of the Participant’s benefit under this
Plan with respect to amounts deferred or otherwise credited on or after January 1,
2005, pursuant to Section 4.2.


 


(w)                  “Pre-2005 Sub-Account” shall mean a
nominal bookkeeping sub-account of the Participant’s Account established to
state the balance of (i) Compensation that was fully earned and vested
prior to January 1, 2005, and deferred by a Participant under the terms of
the Plan then in effect; (ii) any cash amounts automatically directed to
this Plan and fully earned and vested prior to January 1, 2005 by action
of the Board of Directors of The Allstate Corporation or a committee thereof;
and (iii) subsequent earnings and losses on amounts contributed pursuant
to (i) and (ii) of this subsection, pursuant to Article IV.


 


Page 5

















 


(x)                      “Prior Plan Year” shall mean the Plan
Year immediately preceding the Current Plan Year.


 


(y)                    “Separation from Service” shall mean the
termination of employment or cessation or reduction of services by a
Participant that results in a distribution as specifically defined and
determined under Article V of the Plan. 
“Separation from Service” shall have distinct meanings with respect to
the Pre-2005 Sub-Account and the Post-2004 Sub-Account, as set forth in Article V
of the Plan.


 


(z)                      “Unforeseeable Financial Emergency” shall
apply only to a Participant’s Post-2004 Sub-Account and shall mean a severe
financial hardship to the Participant resulting from an illness or accident of
the Participant, the Participant’s spouse, the Participant’s beneficiary, or
the Participant’s dependent (as defined in Section 152 of the Code,
without regard to Sections 152(b)(1), 152(b)(2) and 152(d)(1)(B) of
the Code); loss of the Participant’s property due to casualty; or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant; but shall not include any of the
foregoing to the extent such emergency is or may be relieved through
reimbursement or compensation from insurance or otherwise, by liquidation of
the Participant’s assets (to the extent the liquidation of such
assets would not cause severe financial hardship), or by cessation of deferrals
under the Plan.  In
making its determination, the Committee shall be guided by the prevailing
authorities applicable under the Code so as to result in the Participant not
being in constructive receipt or subject to penalties under Code Section 409A
with respect to any distribution or cancellation of a deferral due to an
Unforeseeable Financial Emergency.


 


ARTICLE II


PARTICIPATION


 


2.1                                PARTICIPATION
AND DEFERRAL ELECTIONS


 


An Eligible Employee shall become a Participant upon the filing of an
election to defer base salary or Incentive and shall continue as a Participant
until his or her Account has been fully paid pursuant to the provisions of Article V.  An election to defer base salary


 


Page 6

















 


or Incentives shall specify the percentage of compensation to be
deferred under the Plan for a Plan Year. 
An election to defer base salary or Incentive shall be filed in the
manner and at the time that the Committee may specify in its discretion from
time to time.


 


2.2                                TIMING OF
DEFERRAL ELECTIONS


 


(a)                     In no event shall a Participant be
permitted to make a deferral election with respect to his or her base salary
after December 31 of the calendar year preceding the Plan Year in which
such deferral election shall take effect. 
All elections to defer base salary for a Plan Year shall be irrevocable
as of December 31 of the preceding Plan Year (or such earlier date as may
be determined by the Committee from time to time) and, therefore, may not be
changed by either the Committee or the Participant after December 31 (or
such earlier date, if applicable).


 


(b)                    An election to defer Incentive shall be
filed no later than December 31 of the calendar year preceding the Plan
Year in which services are first performed with respect to such Incentive,
unless the Committee determines that a Participant’s Incentive constitutes “performance-based
compensation” within the meaning of Code Section 409A.  In such case, the Committee may establish a
later date for the filing of Incentive deferral elections; provided that, as of
such date established by the Committee, Incentive is not readily ascertainable
within the meaning of Code Section 409A, and further provided that such
date shall in no event be later than 6 months prior to the end of the
applicable performance period for such Incentive.  Such deferral election shall be irrevocable
as of the filing date established by the Committee.  Notwithstanding the foregoing, a Participant’s
election made in 2008 to defer Incentive earned in 2008 shall apply to the
Participant’s entire Incentive earned in 2008, including any amounts that may
not constitute performance-based compensation. 
To the extent a Participant’s election made in 2008 results in a
deferral of any portion of the Participant’s Incentive that does not constitute
performance-based compensation, such deferral election shall be deemed to be a
transition relief election pursuant to Code Section 409A.


 


(c)                     “Evergreen” Deferral Elections.  The Committee may in its discretion establish
rules from time to time under which deferral elections provided in this Section 
2.2 


 


Page 7

















 


shall remain in effect for all succeeding Plan
Years in which the Participant is eligible to make a deferral election unless
and until the Participant files a subsequent deferral election.


 


(d)                  Hardship and Unforeseeable Financial
Emergency.  Notwithstanding the other
provisions of this section 2.2, the Committee may in its sole discretion
rescind a deferral election of a Participant if the Participant experiences a
Hardship or upon the Committee’s determination that the Participant has experienced
an Unforeseeable Financial Emergency. 
Any subsequent election to defer shall be subject to the terms of this Section 2.2(a) and
(b).


 


ARTICLE III


DEFERRALS


 


3.1                                AMOUNT OF
DEFERRAL


 


(a)                     Elections
made pursuant to Section 2.2(a) to defer base salary shall be made in
whole number percentages up to eighty (80) percent and shall apply only to base
salary payable on or after the Participant has earned Compensation in the Plan
Year equal to the Compensation Floor for the Plan Year.


 


(b)                    Elections made pursuant to Section 2.2(b) to
defer Incentive shall be made in whole number percentages up to one hundred
(100) percent.  If a Participant’s
Compensation (determined solely for this purpose on an annualized basis as of
the date that such election becomes irrevocable pursuant to Section 2.2(b))
does not exceed the Compensation Floor, the election to defer Incentive shall
be reduced dollar for dollar until the total of such Compensation and the
Incentive that is not deferred and is payable to the Participant equals the
Compensation Floor.


 


3.2                                EFFECTIVE DATE
OF DEFERRAL


 


Compensation deferred shall be credited to a Participant’s Account by
bookkeeping entry as set forth in Section 4.2.


 


Page 8
















 


3.3                                 USE OF AMOUNTS
DEFERRED


 


Amounts credited to Accounts shall be a part of the general funds of
the Company, shall be subject to all the risks of the Company’s business, and
may be deposited, invested or expended in any manner whatsoever by the Company.


 


ARTICLE IV


ACCOUNTS AND VESTING


 


4.1                                 ESTABLISHMENT
OF ACCOUNT


 


The Committee shall establish, by bookkeeping
entry on the books of the Company, an Account for each Participant.  Accounts shall not be funded in any manner.


 


4.2                                 CONTRIBUTIONS
TO ACCOUNT


 


The Committee shall cause deferred Compensation to be credited by
bookkeeping entry to each Participant’s Account as of the last day of the month
in which the Compensation or any cash amounts automatically directed to this
Plan otherwise would have been payable to the Participant, or as soon
thereafter as is administratively practicable.


 


4.3                                 MAINTENANCE OF
ACCOUNT BALANCES - INVESTMENT


 


(a)                      A Participant may make an Investment with
respect to amounts in his or her Account. 
Each Investment shall be made in accordance with procedures established
by the Committee and shall specify that portion of the Participant’s deferrals
on the date of such election to be invested in each Investment Option (as
defined in Section 4.3(b) below). 
In its sole discretion, the Committee may withhold one or more of the
Investment Options from Investment by Participants for a Plan Year or
Years.  Investments of deferrals must be
made in whole percentage increments.


 


Each Account shall be
adjusted, as applicable, to apply contributions, dividend equivalents,
investment gains and losses net of any Plan administration and investment
expenses, and distributions.  All such
adjustments shall be bookkeeping entries reflecting hypothetical experience for
the Investment Options in which 


 


Page 9

















 


Investments are made.


 


(b)                     The
Investment Options in which Investments may be made are:


 


(1)                      Investment
Option #1 – Stable Value Fund. The Stable Value Fund, managed by INVESCO
Institutional (N.A.), Inc., (“INVESCO”) consists of a number of investment
contracts issued by a diversified group of high quality insurance companies,
banks, and other financial institutions (excluding Allstate companies).


 


The
investment contracts are supported by use of investment portfolios holding a
diversified mix of high quality fixed-income securities. The average credit
quality of all of the investments backing the Stable Value Fund contracts is
AA/Aa or better as measured by Standard &Poor’s or Moody’s credit
rating services. Derivative securities may be used for hedging and replication
purposes only. U.S. Treasury securities and U.S. Treasury futures may be used
to manage interest rate risk.


 


The
credited rate of interest of the Stable Value Fund is the average return of all
investments held in the fund.


 


(2)                              Investment
Option #2 – Bond Fund.  The Bond Fund
invests in both the Passive Bond Market Index Securities Lending Series Fund
Class A and the Passive Bond Market Index Non-Lending Series Fund – Class A,
which are collective funds managed by State Street Global Advisors (SSgA).  The underlying portfolio’s investments
include U.S. Treasury, agency, corporate, mortgage-backed, commercial
mortgage-backed securities, and asset-backed securities. The fund’s objective
is to match the total rate of return of the Barclays Capital U.S. Aggregate
Index (the “Barclays Index”), a broad-based domestic bond index composed of
more than 5,000
debt securities with all securities having an average life of at least one
year. The portfolio is managed duration-neutral to the Barclays Index at all
times.  Overall sector and quality
weightings are also matched to the Barclays Index, with individual security
selection based upon security availability and SSgA’s analysis of its impact on
the portfolio’s weightings.


 


Page 10

















 


Effective July 2009, a transition of the
investments of the Bond Fund away from the Passive Bond Market Index Securities
Lending Series Fund - Class A into the Passive Bond Market Index
Non-Lending Series Fund - Class A began.  Based on current restrictions imposed by
SSgA, the majority of the transition from the Passive Bond Market Index
Securities Lending Series Fund - Class A to the Passive Bond Market
Index Non-Lending Series Fund - Class A is expected to be completed
by the end of 2012.


 


(3)                      Investment Option #3 – S&P 500
Fund1.  The S&P 500 Fund invests in both the
S&P 500 Flagship Securities Lending Series Fund Class A and the
S&P 500 Flagship Non-Lending Series Fund Class A, which are
collective funds managed by SSgA. The fund’s objective is to match the total
rate of return of the Standard & Poor’s (S&P) 500 Index, which
consists of 500 stocks chosen for market size, liquidity and industry group
representation. The fund seeks to maintain the returns of the S&P 500 Index
by investing in a portfolio that replicates the S&P 500 Index by owning
securities in the same capitalization weights as they appear in the S&P 500
Index. Effective July 2009, a transition of the investments of the S&P
500 Fund away from the S&P 500 Flagship Securities Lending Series Fund
- Class A into the S&P 500 Flagship Non-Lending Series Fund - Class A
began.  Based on current restrictions
imposed by SSgA, the majority of the transition from the S&P 500 Flagship
Securities Lending Series Fund - Class A to the S&P 500 Flagship
Non-Lending Series Fund - Class A Lending is expected to be completed
by the end of 2012.


 


(4)                            Investment
Option #4 – International Equity Fund - The International Equity
Fund invests in both the Daily EAFE Index Securities Lending Series Fund Class T and the
Daily EAFE Index Non-Lending Series Fund Class A, which
are collective funds managed by SSgA. 
The fund’s objective is to match the
total rate of returns and characteristics of the Morgan Stanley Capital 






1 Standard & Poor’s ®, S&P®, S&P 500 Index and
Standard & Poor’s 500 Index are trademarks of Standard &
Poor’s Corporation (S&P) and have been licensed for use by State Street
Bank and Trust Company.  The product is
not sponsored, endorsed, listed, sold or promoted by S&P, and S&P makes
no representation regarding the advisability of investing in this product.


 


Page 11

















 


International (MSCI) Europe, Australia, Far East (EAFE) Index
(the “EAFE Index”). The
EAFE Index consists of more than 1,200 stocks in over 21 developed market countries outside
of North and South America, and represents approximately 85% of the total
market capitalization in those countries. The fund seeks to maintain the
returns of the EAFE Index by investing in a portfolio that replicates the EAFE
Index.


 


Effective July 2009, a transition of the
investments of the International Equity Fund away from the Daily EAFE Index
Securities Lending Series Fund - Class T into the Daily EAFE Index
Non-Lending Series Fund - Class A began.  Based on current restrictions imposed by
SSgA, the majority of the transition from the Daily EAFE Index Securities
Lending Series Fund - Class T to the Daily EAFE Index Non-Lending Series Fund
- Class A is expected to be completed by the end of 2012.


 


Restrictions apply to
reallocations of money into the International Equity Fund. This means that you
are prohibited from using the reallocation feature to move money into the
International Equity Fund within any 30-calendar day period following the date
you moved money out of the International Equity Fund through reallocation. Any
subsequent reallocation of money out of the International Equity Fund during a
30-calendar day restriction period will start a new 30-day restriction period.
The 30-calendar day restriction does not apply to employee deferrals into the
International Equity Fund or to hardship withdrawals from the International
Equity Fund.


 


Reallocations or
transfers of money out of the International Equity Fund are allowed at any
time. The restriction applies only to reallocations into the International
Equity Fund.


 


Page 12

















 


(5)                            Investment
Option #5 – Russell 2000 Fund - The Russell 2000 Fund invests in
both the Russell 2000 Index Securities Lending Series Fund  –  Class A and the
Russell 2000 Index Non-Lending Series Fund - Class A, which
are collective funds managed by SSgA. The fund’s
objective is to match the total rate of returns and characteristics of the
Russell 2000 Index, which
consists of the smallest 2,000 U.S. securities in the Russell 3000 Index. The
fund seeks to match the return of the Russell 3000 Index by investing in a
portfolio that holds the securities of the Russell 3000 Index.


 


Effective July 2009, a transition of the
investments of the Russell 2000 Fund away from the Russell 2000 Index
Securities Lending Series Fund - Class A into the Russell 2000 Index
Non-Lending Series Fund - Class A began.  Based on current restrictions imposed by
SSgA, the majority of the transition from the Russell 2000 Index Securities
Lending Series Fund - Class A to the Russell 2000 Index Non-Lending Series Fund
- Class A is expected to be completed by the end of 2012.


 


(c)                      A Participant may change his Investment
elections at such time and in such manner, and with respect to such existing
Account balances and future contributions, as the Committee shall determine;
any such changes to be effective only in accordance with such procedures as
established from time to time by the Committee. 
Any reallocations of existing Account balances must be made in whole
percentage increments.  A reallocation
election will become effective as set forth in Plan procedures.  Any reallocations of existing Account
balances made under this Plan will simultaneously apply to any amounts the
Participant may have deferred under either The Allstate Corporation Deferred
Compensation Plan for Employee Agents or The Allstate Corporation Deferred
Compensation Plan for Independent Contractor Exclusive Agents.


 


4.4                                 VESTING


 


A Participant shall be fully vested in
his or her Account at all times, subject to Sections 3.3, 8.2 and 8.3.


 


Page 13

















 


ARTICLE V


PAYMENTS


 


5.1                                 EVENTS CAUSING
ACCOUNTS TO BECOME DISTRIBUTABLE


 


(a)           Pre-2005 Sub-Account.  All
references to “Account” in this Section 5.1(a) shall refer solely to
the portion of a Participant’s Account, if any, that is the Pre-2005
Sub-Account.


 


(1)                          A
Participant’s Account shall become distributable upon notification to the Plan
of the Participant’s Separation from Service or, at the election of the
Participant pursuant to Section 5.3(a), in one of the first through fifth
years after Separation from Service.  In
either event, the Participant may elect to receive payment in a lump sum or in
annual installments as provided in Section 5.3(a).


 


For
purposes of this Section 5.1(a), “Separation from Service” shall mean the
termination of a Participant’s employment with any company in the Controlled
Group for any reason whatsoever, including retirement, resignation, dismissal
or death, but does not include a transfer of status to an employee agent or to
an Exclusive Agent Independent Contractor or Exclusive Financial Specialist Independent
Contractor for Allstate Insurance Company, Allstate New Jersey Insurance
Company, Allstate Life Insurance Company or for any other member of the
Controlled Group.  “Separation from
Service” shall also mean the subsequent termination of any Exclusive Agent
Independent Contractor or Exclusive Financial Specialist Independent Contractor
agreement, unless such termination results from acceptance of employment with
any member of the Controlled Group.


 


(2)                          That portion of a Participant’s Account
determined to be necessary to alleviate a demonstrated Hardship shall become
distributable upon the date of such determination, subject to Section 5.2.


 


Page 14

















 


(3)                          Special Distribution Rule for
Participants Prior to September 1, 1999. 
For those Participants who irrevocably elected to do so on or before September 1,
1999, such Participants may receive a distribution as of the first day of any
Plan Year prior to his or her Separation from Service. The portion of the
Participant’s Account attributable to Compensation deferred, and accruals
thereon, shall be distributed on the date elected.  Any balance in the Participant’s Account
remaining after any payment under this paragraph and any balance in the Account
attributable to participation in the Plan in any year subsequent to the year in
which a payout on such date certain occurs, shall become distributable to the
Participant as provided in paragraphs (1), (2) or (3) of this Section 5.1(a).


 


(4)                          Effective September 1, 1999, a
Participant may at any time irrevocably elect to receive distribution of his or
her entire Account balance, subject to the forfeiture to the Company of 10% of
such Account balance and subject to suspension of deferrals in the Plan by the
Participant for the remainder of the Plan Year and for the next succeeding Plan
Year (“Suspension Period”). Such election will cause any pending election of
Incentive deferrals payable during the Suspension Period to be voided.  The Participant’s Account balance shall
become distributable subject to Section 5.2 following the date of such
election.


 


(5)                          In the event of a Participant’s death
prior to distribution of his or her entire Account balance, the remaining
Account balance shall become distributable following the date on which all
events have occurred which entitle the Beneficiary or Beneficiaries to payment.


 


(b)                                 Post-2004 Sub-Account.  All references to “Account” in this Section 5.1(b) shall
refer solely to the portion of a Participant’s Account, if any, that is the
Post-2004 Sub-Account.


 


(1)                          Distributions of the Account shall be
made (in the case of a lump sum) or commence (in the case of installments) on
the first day of the first calendar month that commences after the six (6) month
anniversary of the Participant’s Separation from Service.  Unless otherwise specified pursuant 


 


Page 15

















 


to Section 5.3, distributions shall be in
the form of a single lump sum payment. 
For purposes of this Section 5.1(b), “Separation from Service”
shall mean a termination of employment upon
which a Participant ceases performing services for all entities within the
Controlled Group.  Notwithstanding, a
Separation from Service shall also include a reduction in a Participant’s rate
of services to any such entity that is reasonably anticipated to be a permanent
reduction to a rate that is 20 percent or less of the average rate of services
performed by the Participant in the 36 months prior to such reduction.  If a Participant ceases or reduces services
under a bona fide leave of absence, a Separation from Service occurs after the
close of the 6-month anniversary of such leave; provided, however, that if the
Participant has a statutory or contractual right to reemployment, the Separation
from Service shall be delayed until the date that the Participant’s right
ceases or, if the Participant resumes services, until the Participant
subsequently Separates from Service.  For
purposes of determining whether a Participant has a Separation from Service,
services taken into account shall include services performed for the Company as
an independent contractor but not services performed as a non-employee member
of the board of directors of any entity within the Controlled Group.  Determination of whether a Separation from
Service occurs shall be made in a manner that is consistent with Treas. Reg.
1.409A-1(h).


 


(2)                          In the event of a Participant’s death
prior to the full distribution of his or her Account, the undistributed Account
shall be distributed to the Participant’s Beneficiary within 90 days of the
Participant’s death.


 


(3)                          The Committee retains sole discretion to
determine whether and to what extent all or any portion of an Account may be
payable on account of an Unforeseeable Financial Emergency.  If the Committee determines that such
distribution shall be made, payment shall be made within 30 days of the
determination of Unforeseeable Financial Emergency and the Committee may, in
its discretion, determine how any partial distribution of the Account shall be
allocated among the hypothetical Investment options applicable to such Account.


 


Page 16
















 


(4)                         Payment Dates.  If a payment is due on a nonbusiness day or a
federal or state holiday, such payment shall be due on the next succeeding
business day.


 


5.2                               NOTICE OF
ACCOUNT PAYMENT AND COMMENCEMENT OF DISTRIBUTION FOR PRE-2005 SUB-ACCOUNTS


 


The Committee or its appointed representative shall notify a
Participant or Beneficiary, as the case may be, as soon as practicable after
the first day of the month next following the date on which the Pre-2005
Sub-Account becomes distributable, that he or she is entitled to receive
payment from the Pre-2005 Sub-Account, the balance of which shall be computed
as of the close of business on the last day of the month in which the Pre-2005
Sub-Account becomes distributable.  Distribution
of Pre-2005 Sub-Account balances shall commence as soon as practicable after
the first day of the month next following the date on which the Pre-2005
Sub-Account becomes distributable.


 


5.3                               FORM OF
PAYMENT


 


(a)                     Except as provided in paragraphs (c) and
(d) of this Section 5.3 and Article VIII hereof, payments of
Account balances to a Participant shall be in the form of one lump sum payment
or annual cash installment payments over a minimum of 2 and a maximum of 10
years, at the election of the Participant. 
The provisions of this Section 5.3 apply separately to the Pre-2005
Sub-Account and the Post-2004 Sub-Account and, accordingly, different forms of
payments may be made from each such sub-account.


 


(b)                     The amount of each annual installment
payable to a Participant who has elected to receive installment payments shall
be as follows:  The first annual
installment payment shall, for a Participant who has elected to receive
installment payments commencing upon his or her Separation from Service, be
computed as of the close of business on the last day of the month in which the
Account becomes distributable, and the amount of such payment shall equal his
or her Account balance as of such date, divided by the number of installments
including the one


 


Page 17

















 


being paid.  The first annual installment payment shall,
for a Participant who has elected to receive installment payments commencing in
one of the first through fifth years after Separation from Service, be computed
as of the close of the first business day of the year preceding the year in
which the Account balance becomes distributable, and the amount of such payment
shall equal his or her Account balance as of such date, divided by the number
of installments including the one being paid.  Each subsequent installment payment shall be
computed as of the close of the last business day of the year thereafter, and
the amount of each subsequent payment shall equal his or her remaining Account
balance, divided by the number of remaining installments including the one
being paid.  Investment gains or losses
and other adjustments shall continue with respect to the entire unpaid Account
balance, as provided in Section 4.3.


 


(c)                      In the event of a Participant’s death
prior to distribution of his or her entire Account balance, the remaining
Account balance shall be paid in a lump sum to the Participant’s Beneficiary or
Beneficiaries, subject to Sections 5.1(a)(5) and 5.1(b)(2).


 


(d)                     Notwithstanding the provisions of
paragraphs (a) and (b) above, if the Account balance is $5,000 or
less on any date a payment is to be made to a Participant, the payment shall be
the remaining unpaid Account balance.


 


5.4                               DISTRIBUTION
ELECTION


 


(a)                     Each Participant shall elect his or her
desired form of payment, in accordance with procedures established by the
Committee, at the time of his or her initial participation election set forth
in Section 2.1.


 


(b)                     This Section 5.4(b) shall apply
solely with respect to Pre-2005 Sub-Accounts. 
Except for distribution elections under Section 5.1(a)(3) and
(4), each Participant may from time to time revise the terms of distribution of
the Participants Accounts, in accordance with the procedures established by the
Committee, provided that (i) the revised notice of the desired form of
payment shall be made by the Participant no less than twelve months prior to
the date on which payment is to commence, but in any event no later than the
day before the date of the Participant’s Separation 


 


Page 18

















 


from Service and (ii) in any event,
distribution of the Participant’s Account shall not commence earlier than
twelve months after the Participant’s revised notice of the desired form of
payment is made.


 


(c)                      This Section 5.4(c) shall apply
solely with respect to Post-2004 Sub-Accounts. 
Installments shall be paid only if a Participant filed an irrevocable
election to receive installment payments in a manner acceptable to the
Committee on or before the later of December 31, 2008, or the date of the
Participant’s initial election to defer base salary or Incentive under the
Plan.  Installment payments shall be
treated as a right to a series of separate payments for purposes of Code Section 409A.


 


ARTICLE
VI


ADMINISTRATION


 


6.1                               GENERAL
ADMINISTRATION; RIGHTS AND DUTIES


 


The Board shall appoint the Committee, which, subject to the express
limitations of the Plan, shall be charged with the general administration of
the Plan on behalf of the Participants. 
The Committee shall also be responsible for carrying out its provisions,
and shall have all powers necessary to accomplish those purposes, including,
but not by way of limitation, the following:


 


(a)                 To construe and interpret
the Plan;


 


(b)                 To compute the amount of
benefits payable to Participants;


 


(c)                  To authorize all
disbursements by the Company of Account balances pursuant to the Plan;


 


(d)                 To maintain all the
necessary records for the administration of the Plan;


 


(e)                  To make and publish rules for
administration and interpretation of the Plan and the transaction of its
business;


 


(f)                   To make available to each
Participant the current value of his or her Account;


 


(g)                  To delegate the
administration of the Plan in accordance with its terms to officers or
employees of the Company, of Allstate Insurance Company or of an 


 


Page 19

















 


independent consultant
retained by the Committee who the Committee believes to be reliable and
competent.  The Committee may authorize
officers or employees of the Company or of Allstate Insurance Company to whom
it has delegated duties under the Plan to appoint other persons to assist the
delegate in administering the Plan; and


 


(h)                 To refuse to accept the
deferral of amounts the Committee or its delegate considers too small to be administratively
feasible.


 


The determination of the Committee as to any disputed question or
controversy shall be conclusive.


 


6.2                               CLAIMS
PROCEDURES


 


Each
Participant or Beneficiary (for purposes of this Section 6.2. referred to
as a “Claimant”) may submit a claim for benefits to the Committee (or other
person designated by the Committee) in writing in such form as is permitted by
the Committee.  A Claimant shall have no
right to seek review of a denial of benefits, or to bring any action in any
court to enforce a claim for benefits, prior to his filing a claim for benefits
and exhausting his rights to review in accordance with this Section 6.2.


 


A
properly filed claim for benefits shall be evaluated and the Claimant shall be
notified in writing of the approval or the denial within ninety (90) days after
the receipt of such claim unless special circumstances require an extension of
time for processing the claim.  If such
an extension of time is required, written notice of the extension shall be
furnished to the Claimant prior to the termination of the initial ninety (90)
day period, and such notice shall specify the special circumstances requiring
an extension and the date by which a final decision will be reached (which date
shall not be later than one hundred and eighty (180) days after the date on
which the claim was filed).  Written
notice to a Claimant shall advise whether the claim is granted or denied, in
whole or in part, and if denied, shall contain (1) the specific reasons
for the denial, (2) references to pertinent Plan provisions on which the
denial is based, (3) a description of any additional material or
information necessary to perfect the claim and an explanation of why such
material or information is necessary, and (4) the Claimant’s rights to seek
a review of the denial.


 


Page 20

















 


If
a claim is denied, in whole or in part, the Claimant shall have the right to
request that the Committee (or person designated by the Committee) review the
denial, provided that he files a written request for review with the Committee
within sixty (60) days after the date on which he received written notice of
the denial.  A Claimant (or his duly
authorized representative) may review pertinent documents and submit issues and
comments in writing to the Committee. 
Within sixty (60) days after a request for review is received, the
review shall be made and the Claimant shall be advised in writing of the
decision on review, unless special circumstances require an extension of time
for processing the review, in which case the Claimant shall, within such
initial sixty (60) day period, be given a written notice specifying the reasons
for the extension and when such review shall be completed (provided that such
review shall be completed within one hundred and twenty (120) days after the
date on which the request for review was filed).  The decision on review shall be forwarded to
the Claimant in writing and shall include specific reasons for the decision and
references to Plan provisions upon which the decision is based.  A decision on review shall be final and
binding on all persons for all purposes.


 


ARTICLE VII


PLAN AMENDMENTS AND
TERMINATION


 


7.1                               AMENDMENTS


 


The Company shall have the right to amend this Plan from time to time
by resolutions of the Board or by the Committee, and to amend or rescind any
such amendments; provided, however, that no action under this Section 7.1
shall in any way reduce the amount of Compensation deferred or reduce the value
of any Account.  All amendments shall be
in writing and shall be effective as provided subject to the limitations in
this Section 7.1.


 


7.2                               TERMINATION OF
PLAN


 


The Company expects that the Plan will continue indefinitely but
continuance of the Plan is not a contractual or other obligation of the
Company.  The Company reserves its right
to discontinue the Plan at any time by resolution of the Board; however, no
such action shall reduce the value of an Account or result in a distribution that
does not conform to 


 


Page 21

















 


the requirements of Code Section 409A.


 


ARTICLE
VIII


MISCELLANEOUS


 


8.1                               NOTIFICATION TO
COMMITTEE


 


Any election made or notification given by a Participant pursuant to
this Plan shall be made in accordance with procedures established by the
Committee or its designated representative, and shall be deemed to have been
made or given on the date received by the Committee or such representative.


 


8.2                               PARTICIPANT’S
EMPLOYMENT


 


Participation in this Plan shall not give any Participant the right to
be retained in the employ of the Company, Allstate Insurance Company or any
member of the Controlled Group, or any other right or interest other than as
herein provided.  No Participant or
Employee shall have any right to any payment or benefit except to the extent
provided in this Plan.


 


8.3                               STATUS OF
PARTICIPANTS


 


This Plan shall create only a contractual obligation on the part of the
Company and shall not be construed as creating a trust or other fiduciary
relationship with Participants. 
Participants will have only the rights of general unsecured creditors of
the Company with respect to Compensation deferred and investment gains and
losses credited to their Accounts.


 


8.4                               BENEFICIARIES
AND CONTINGENT BENEFICIARIES


 


(a)                                 Beneficiary
Designation.  Each Participant shall, in
accordance with procedures established by the Committee, designate one or more
persons or entities (including a trust or trusts or his or her estate) to
receive distribution of his or her Account that are not distributed prior to
the Participant’s death.  The Participant
may also designate a person or persons as a Contingent Beneficiary who shall 


 


Page 22

















 


succeed to the rights of the person or persons originally designated as
Beneficiary, in case the latter should die. 
The Participant may from time to time change any designation of
Beneficiary or Contingent Beneficiary so made, by submitting a new designation
in accordance with procedures established by the Committee.  The last valid designation made by a
Participant under the Plan, in accordance with procedures established by the
Committee, shall be controlling.


 


(b)                                 Spousal Consent
Required.  In the event a Participant
designates a person other than his or her spouse as Beneficiary of any
interests under this Plan, the Participant’s spouse shall sign a notarized
statement specifically approving such designation and authorizing the Committee
to make payment of such interests in the manner provided in such designation.  In the absence of such designation by the
Participant, or in the absence of spousal approval and authorization as herein
above provided, or in the event of the death, prior to or simultaneous with the
death of the Participant, of all Beneficiaries or Contingent Beneficiaries, as
the case may be, to whom payments were to be made pursuant to a designation by
the Participant, such payments or any balance thereof shall be paid to the
Participant’s spouse or, if there is no surviving spouse, to the Participant’s
estate, or, if there is no estate, according to the Illinois laws of descent
and distribution.


 


(c)                                  Death of
Beneficiary.  In the event of the death,
subsequent to the death of the Participant, of a Beneficiary or Contingent
Beneficiary, as the case may be, to whom such payments were to be made or were
being made pursuant to a designation under this section, such payments or any
balance thereof shall be paid to the estate of such Beneficiary or Contingent
Beneficiary.


 


8.5                               TAXES AND OTHER
CHARGES


 


To the extent permitted by law, if the whole or any part of a
Participant’s Account shall become the subject of any federal, state or local
tax which the Company shall legally be required to withhold or pay, the Company
shall reduce an Account with respect to such tax paid.


 


8.6                               BENEFITS NOT
ASSIGNABLE; OBLIGATIONS BINDING UPON SUCCESSORS


 


Page 23

















 


Benefits under this Plan and rights to receive the amounts credited to
the Account of a Participant shall not be assignable or transferable and any
purported transfer, assignment,  pledge or other encumbrance or attachment of
any payments or benefits under this Plan shall not be permitted or
recognized.  Obligations of the Company
under this Plan shall be binding upon successors of the Company.


 


8.7                               ILLINOIS LAW
GOVERNS; SAVING CLAUSE


 


The validity of this Plan or any of its provisions shall be construed
and governed in all respects under and by the laws of the State of
Illinois.  If any provisions of this Plan
shall be held by a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions hereof shall continue to be fully
effective.


 


8.8                               HEADINGS NOT PART OF
PLAN


 


Headings and subheadings in this Plan are
inserted for reference only, and are not to be considered in the construction
of the provisions hereof.


 


Page 24