Document:

EXHIBIT 10.23

 

AMENDED AND RESTATED

 

CHANGE OF CONTROL EMPLOYMENT AGREEMENT

 

AMONG

 

THE ALLSTATE CORPORATION,

 

ALLSTATE INSURANCE COMPANY

 

AND

 

[NAME OF EXECUTIVE]

(Tier Two)

 

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I.

  	
   

  	
  CERTAIN DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II.

  	
   

  	
  POST-CHANGE PERIOD

  	
   

  	
  9

  
	
  2.1

  	
   

  	
  Position and Duties

  	
   

  	
  9

  
	
  2.2

  	
   

  	
  Compensation

  	
   

  	
  9

  
	
  2.3

  	
   

  	
  Stock Incentive Awards

  	
   

  	
  12

  
	
  2.4

  	
   

  	
  Unfunded Deferred Compensation

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III.

  	
   

  	
  TERMINATION OF EMPLOYMENT

  	
   

  	
  12

  
	
  3.1

  	
   

  	
  Disability

  	
   

  	
  12

  
	
  3.2

  	
   

  	
  Death

  	
   

  	
  13

  
	
  3.3

  	
   

  	
  Cause

  	
   

  	
  13

  
	
  3.4

  	
   

  	
  Good Reason

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV.

  	
   

  	
  COMPANY’S OBLIGATIONS UPON A TERMINATION OF EMPLOYMENT

  	
   

  	
  16

  
	
  4.1

  	
   

  	
  If by Executive for Good Reason or by the Company Other Than for
  Cause or Disability

  	
   

  	
  16

  
	
  4.2

  	
   

  	
  If by the Company for Cause

  	
   

  	
  19

  
	
  4.3

  	
   

  	
  If by Executive Other Than for Good Reason

  	
   

  	
  19

  
	
  4.4

  	
   

  	
  If by the Company for Disability

  	
   

  	
  19

  
	
  4.5

  	
   

  	
  If Upon Death

  	
   

  	
  20

  
	
  4.6

  	
   

  	
  Amount Contested

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V.

  	
   

  	
  CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY

  	
   

  	
  21

  
	
  5.1

  	
   

  	
  Gross-up for Certain Taxes

  	
   

  	
  21

  
	
  5.2

  	
   

  	
  Determination by Executive

  	
   

  	
  22

  
	
  5.3

  	
   

  	
  Additional Gross-up Amounts

  	
   

  	
  23

  
	
  5.4

  	
   

  	
  Gross-up Multiple

  	
   

  	
  23

  
	
  5.5

  	
   

  	
  Opinion of Counsel

  	
   

  	
  23

  
	
  5.6

  	
   

  	
  Amount Increased or Contested

  	
   

  	
  24

  
	
  5.7

  	
   

  	
  Limitations on Gross-Up Payments

  	
   

  	
  26

  
	
  5.8

  	
   

  	
  Refunds

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI.

  	
   

  	
  EXPENSES AND INTEREST

  	
   

  	
  27

  
	
  6.1

  	
   

  	
  Legal and Other Expenses

  	
   

  	
  27

  
	
  6.2

  	
   

  	
  Interest

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII.

  	
   

  	
  NO SET-OFF OR MITIGATION

  	
   

  	
  27

  
	
  7.1

  	
   

  	
  No Set-off by Company

  	
   

  	
  27

  
	
  7.2

  	
   

  	
  No Mitigation

  	
   

  	
  28

  

 

i

 

	
  ARTICLE VIII.

  	
   

  	
  RESTRICTIVE COVENANTS

  	
   

  	
  28

  
	
  8.1

  	
   

  	
  Non-Competition

  	
   

  	
  28

  
	
  8.2

  	
   

  	
  Non-Solicitation

  	
   

  	
  29

  
	
  8.3

  	
   

  	
  Reasonableness of Restrictive Covenants

  	
   

  	
  29

  
	
  8.4

  	
   

  	
  Right to Injunction; Survival of Undertakings

  	
   

  	
  30

  
	
  8.5

  	
   

  	
  Non-Disparagement

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX.

  	
   

  	
  NON-EXCLUSIVITY OF RIGHTS

  	
   

  	
  31

  
	
  9.1

  	
   

  	
  Waiver of Certain Other Rights

  	
   

  	
  31

  
	
  9.2

  	
   

  	
  Other Rights

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  31

  
	
  10.1

  	
   

  	
  No Assignability

  	
   

  	
  31

  
	
  10.2

  	
   

  	
  Successors

  	
   

  	
  31

  
	
  10.3

  	
   

  	
  Payments to Beneficiary

  	
   

  	
  32

  
	
  10.4

  	
   

  	
  Non-Alienation of Benefits

  	
   

  	
  32

  
	
  10.5

  	
   

  	
  No Deference

  	
   

  	
  32

  
	
  10.6

  	
   

  	
  Severability

  	
   

  	
  32

  
	
  10.7

  	
   

  	
  Amendments

  	
   

  	
  32

  
	
  10.8

  	
   

  	
  Notices

  	
   

  	
  32

  
	
  10.9

  	
   

  	
  Counterparts

  	
   

  	
  33

  
	
  10.10

  	
   

  	
  Governing Law

  	
   

  	
  33

  
	
  10.11

  	
   

  	
  Captions

  	
   

  	
  33

  
	
  10.12

  	
   

  	
  Number and Gender

  	
   

  	
  33

  
	
  10.13

  	
   

  	
  Tax Withholding

  	
   

  	
  33

  
	
  10.14

  	
   

  	
  No Waiver

  	
   

  	
  33

  
	
  10.15

  	
   

  	
  Joint and Several Liability

  	
   

  	
  33

  
	
  10.16

  	
   

  	
  No Rights Prior to Effective Date

  	
   

  	
  33

  
	
  10.17

  	
   

  	
  Six-month Delay

  	
   

  	
  33

  
	
  10.18

  	
   

  	
  Interpretation to Avoid 409A Penalties

  	
   

  	
  34

  
	
  10.19

  	
   

  	
  Entire Agreement

  	
   

  	
  34

  
						

 

ii

 

THE ALLSTATE CORPORATION

 

AMENDED AND RESTATED

 

CHANGE OF CONTROL EMPLOYMENT
AGREEMENT

 

The
Allstate Corporation, a Delaware corporation (“Allstate”), Allstate
Insurance Company, an Illinois insurance company (“AIC”), and                                                          (“Executive”)
are parties to a Change of Control Employment Agreement (the “Original Agreement”)
originally entered into on                     (the “Agreement Date”).  The Board of Directors approved the amendment
and restatement of the Original Agreement on November 13, 2007 and the
further amendment and restatement in the form of this Amended and Restated
Agreement on November 11, 2008, such Amended and Restated Agreement to be
effective on December 31, 2008, subject to Executive’s execution of this
Amended and Restated Agreement.

 

To comply with the provisions of Section 409A
of the Internal Revenue Code so as to avoid the imposition of excise taxes and
penalties on the Executive under Section 409A and to amend certain
provisions of the original Agreement, this Amended and Restated Agreement is
entered into, to be effective as of December 31, 2008.

 

PURPOSES

 

On February 12, 1999
Allstate originally adopted Change of Control Employment Agreements, and on November 13,
2007 and November 11, 2008 approved certain changes to the terms of such
Agreements. Allstate has determined that it is in the best interests of
Allstate and its stockholders to assure that the Company will have the continued
service of Executive. Allstate also believes it is imperative to reduce the
distraction of Executive that would result from the personal uncertainties
caused by a pending or threatened change of control of Allstate, to encourage
Executive’s full attention and dedication to the Company, and to provide
Executive with compensation and benefits arrangements upon a change of control
that will satisfy the expectations of Executive and be competitive with those
of similarly situated corporations. This Agreement is intended to accomplish
these objectives.

 

ARTICLE I.

CERTAIN DEFINITIONS

 

As used in this Agreement, the terms specified below
shall have the following meanings:

 

1.1                               “Accrued Annual Bonus” means the
amount of any Annual Bonus earned and due to be paid but not yet paid to
Executive as of the Executive’s Termination Date, other than amounts that
Executive has elected to defer.

 

1.2                               “Accrued Base Salary” means the amount
of Executive’s Base Salary that is accrued but unpaid as of the Executive’s
Termination Date, other than amounts that Executive has elected to defer.

 

 

1.3                               “Accrued LTIP Bonus” means the amount
of any LTIP Bonus earned and due to be paid but not yet paid to Executive as of
the Executive’s Termination Date, other than amounts that Executive has elected
to defer.

 

1.4                               “Accrued Obligations” means, as of any
date, the sum of Executive’s Accrued Base Salary, Accrued Annual Bonus, Accrued
LTIP Bonus, any accrued but unpaid vacation pay, and any other amounts and
benefits that are then due to be paid or provided to Executive by the Company
(other than pursuant to Sections 2.4 or 4.1(b) or any defined benefit
or defined contribution plan of the Company, whether or not qualified under Section 401(a) of
the Code), but have not yet been paid or provided (as applicable).

 

1.5                               “Agreement Date” — see the
introductory paragraph of this Agreement.

 

1.6                               “Agreement Term” means the period
commencing on the Agreement Date and ending on the third anniversary of the
Agreement Date or, if later, such later date to which the Agreement Term is
extended pursuant to the following sentence. Commencing on the second
anniversary of the Agreement Date, the Agreement Term shall automatically be
extended each day by one day to create a new one-year term until, at any time
after the second anniversary of the Agreement Date, the Company delivers
written notice (an “Expiration Notice”) to Executive that the Agreement
shall expire on a date specified in the Expiration Notice (the “Expiration
Date”) that is not less than 12 months after the date the Expiration Notice
is delivered to Executive; provided, however, that if an Effective Date or an
Imminent Control Change Date occurs before the Expiration Date specified in the
Expiration Notice, then such Expiration Notice shall be void and of no further
effect. “Imminent Control Change Date” means (i) any date on which
a proposal or offer for a Change of Control is presented to Allstate’s
stockholders generally or to any of Allstate’s directors or executive officers
or is publicly announced (whether by advertisement, press release, press
interview, public statement, SEC filing or otherwise) or (ii) any subsequent
date as of which such proposal or offer for a Change of Control remains
effective and has not expired or been revoked.

 

1.7                               “AIC” — see the introductory paragraph
of this Agreement.

 

1.8                               “Allstate” — see the introductory
paragraph of this Agreement.

 

1.9                               “Annual Bonus” — see Section 2.2(b).

 

1.10                         “Annual Performance Period” — see Section 2.2(b).

 

1.11                         “Article” means an article of this
Agreement.

 

1.12                         “Base Salary” — see Section 2.2(a).

 

1.13                         “Beneficiary” — see Section 10.3.

 

2

 

1.14                         “Board” means the Board of Directors
of Allstate or, from and after the Effective Date of a Change of Control that
gives rise to a Surviving Corporation, the Board of Directors of such Surviving
Corporation.

 

1.15                         “Bonus Plan” — see Section 2.2(b).

 

1.16                         “Cause” — see Section 3.3(b).

 

1.17                         “CEO” means Chief Executive Officer.

 

1.18                         “Change of Control” means, except as
otherwise provided at the end of this Section, the occurrence of any one or
more of the following:

 

(a)                                  (Voting Power)  any Person or group (as such term
is defined in Treasury Regulation Section 1.409A-3(i)(5)(v)(B)), other
than a Subsidiary or any employee benefit plan (or any related trust) of
Allstate or any of its Subsidiaries, acquires or has acquired during the
12-month period ending on the date of the most recent acquisition by such
Person of Persons, ownership of stock of Allstate possessing 30% or more of the
combined voting power of all Voting Securities of Allstate (such a Person or
group that is not a Similarly Owned Company (as defined below), a “More than
30% Owner”), except that no Change of Control shall be deemed to have
occurred solely by reason of such ownership by a corporation with respect to
which both more than 70% of the common stock of such corporation and Voting
Securities representing more than 70% of the combined voting power of the
Voting Securities of such corporation are then owned, directly or indirectly,
by the Persons who were the direct or indirect owners of the common stock and
Voting Securities of Allstate immediately before such acquisition in
substantially the same proportions as their ownership, immediately before such
acquisition, of the common stock and Voting Securities of Allstate, as the case
may be (a “Similarly Owned Company”); or

 

(b)                                 (Majority Ownership)  any
Person or group (as such term is defined in Treasury Regulation Section 1.409A-3(i)(5)(v)(B)),
other than a Subsidiary or any employee benefit plan (or any related trust) of
Allstate or any of its Subsidiaries, acquires ownership of more than 50% of the
voting power of all Voting Securities of Allstate or of the total fair market
value of the stock of Allstate (such a Person or group that is not a Similarly
Owned Company, a “Majority Owner”), except that no Change of Control
shall be deemed to have occurred solely by reason of such ownership by a Similarly
Owned Company; or

 

(c)                                  (Board Composition)  a majority of the members of the Board is replaced during any 12-month
period by directors whose appointment or election is not endorsed by a majority
of the members of the Board before the date of the appointment or election (“Board
Turnover”); or

 

3

 

(d)                                 (Reorganization)  the consummation of a merger, reorganization, consolidation, or similar
transaction, or of a plan or agreement for the sale or other disposition of all
or substantially all of the consolidated assets of Allstate, or a plan of
liquidation of Allstate (any of the foregoing, a “Reorganization Transaction”)
that, does not qualify as an Exempt Reorganization Transaction.

 

Notwithstanding anything contained herein to the
contrary: (i) no transaction or event shall constitute a Change of Control
for purposes of this Agreement unless the transaction or event constituting the
Change of Control also constitutes a change in the ownership of a corporation
(as defined in Treasury Regulation Section 1.409A-3(i)(5)(v)), a change in
effective control of a corporation (as defined in Treasury Regulation Section 1.409A-3(i)(5)(vi))
or a change in the ownership of a substantial portion of the assets of a
corporation (as defined in Treasury Regulation Section 1.409A-3(i)(5)(vii));
and (ii) no sale or disposition of one or more Subsidiaries (“Sale
Subsidiary”) or the assets thereof shall constitute a Change of Control for
purposes of this Agreement if the investments in and advances by Allstate and
its Subsidiaries (other than the Sale Subsidiaries) to such Sale Subsidiary as
of immediately prior to the sale or disposition determined in accordance with
Generally Accepted Accounting Principles (“GAAP”) (but after intercompany
eliminations and net of the effect of intercompany reinsurance) are less than
51% of the Consolidated Total Shareholders’ Equity of Allstate as of immediately
prior to the sale or disposition. Consolidated Total Shareholders’ Equity
means, at any date, the total shareholders’ equity of Allstate and its
Subsidiaries at such date, as reported in the consolidated financial statements
prepared in accordance with GAAP.

 

1.19                         “Code” means the Internal Revenue Code
of 1986, as amended. Any reference to any section of the Code shall also refer
to any successor provision.

 

1.20                         “Company” means Allstate, AIC and each
of Allstate’s other Subsidiaries.

 

1.21                         “Company Certificate” — see Section 5.1(b).

 

1.22                         “Company Counsel Opinion” — see Section 5.5.

 

1.23                         “Competitive Business” means as of any
date (including during the one-year period commencing on the Termination Date)
any corporation or other Person (and any branch, office or operation thereof)
that engages in, or proposes to engage in:

 

(a)                                  the underwriting, reinsurance, marketing or
sale of (i) any form of insurance of any kind that the Company as of such
date does, or proposes to, underwrite, reinsure, market or sell (any such form
of insurance, an “Allstate Insurance Product”) or (ii) any other
form of insurance that is marketed or sold in competition with any Allstate
Insurance Product, or

 

(b)                                 any other business that as of such date is a
direct and material competitor of the Company;

 

4

 

and that is located (i) anywhere in the United
States, or (ii) anywhere outside of the United States where the Company is
then engaged in, or proposes to engage in, any of such activities.

 

1.24                         “Consummation Date” means the date on
which a Reorganization Transaction is consummated.

 

1.25                         “Disability” — see Section 3.1(b).

 

1.26                         “Disability Effective Date” — see Section 3.1.

 

1.27                         “Effective Date” means the date on
which a Change of Control first occurs during the Agreement Term.

 

1.28                         “Exchange Act” means the Securities
Exchange Act of 1934.

 

1.29                         “Excise Taxes” — see Section 5.1.

 

1.30                         “Executive Counsel Opinion” — see Section 5.5.

 

1.31                         “Executive’s Gross-Up Determination” —
see Section 5.2(a).

 

1.32                         “Exempt Reorganization Transaction”
means a Reorganization Transaction that fails to result in (a) any Person
or group (as such term is
defined in Treasury Regulation Section 1.409A-3(i)(5)(v)(B)) becoming a More than 30% Owner or a Majority
Owner, (b) Board Turnover, or (c) a sale or disposition to any Person
or group (as such term is
defined in Treasury Regulation Section 1.409A-3(i)(5)(v)(B))of the assets of Allstate that have a total
Gross Fair Market Value (as defined below) equal to at least forty percent
(40%) of the total Gross Fair Market Value of all of the assets of Allstate
immediately before such transaction. “Gross Fair Market Value” means the
value of the assets of Allstate, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets.

 

1.33                         “Good Reason” — see Section 3.4(b).

 

1.34                         “Gross-up Multiple” — see Section 5.4.

 

1.35                         “Gross-up Payment” — see Section 5.1.

 

1.36                         “including” means including without
limitation.

 

1.37                         “IRS” means the Internal Revenue
Service.

 

1.38                         “IRS Claim” — see Section 5.6.

 

5

 

1.39                         “Legal and Other Expenses” — see Section 6.1(a).

 

1.40                         “LTIP” means the Allstate Long-Term
Executive Incentive Compensation Plan (or any successor plan).

 

1.41                         “LTIP Award” means an incentive
compensation opportunity granted under the LTIP.

 

1.42                         “LTIP Bonus” means the amount paid or
earned in respect of an LTIP Award.

 

1.43                         “LTIP Performance Period” means any
performance period designated in accordance with any LTIP approved by the Board
or any committee of the Board.

 

1.44                         “LTIP Target Award” means, in respect
of any LTIP Award, the amount that Executive would have been entitled to
receive for the LTIP Performance Period corresponding to such LTIP Award if the
performance goals established pursuant to such LTIP Award were achieved at the
100% level as of the end of the LTIP Performance Period.

 

1.45                         “Lump Sum Value” of an annuity payable
pursuant to a defined benefit plan means, as of a specified date, the present
value of such annuity, as determined, as of such date, under generally accepted
actuarial principles using (i) the applicable interest rate, mortality
tables and other methods and assumptions under Code Section 417(e) as
published by the IRS and used for determining the value of an immediate annuity
on the Termination Date or (ii) if such interest rate and mortality
assumptions are no longer published by the IRS, the interest rate and mortality
assumptions determined in a manner as similar as practicable to the manner by
which the Code Section 417(e) interest rate and mortality assumptions
were determined immediately prior to the IRS’s cessation of publication of such
assumptions; provided, however, that if such defined benefit plan provides for
a lump sum distribution and such lump-sum distribution either (x) is the
only payment method available under such plan or (y) provides for a
greater amount than the Lump Sum Value of the Maximum Annuity available under such
plan, then “Lump Sum Value” shall mean such lump sum amount.

 

1.46                         “Maximum Annuity” means, in respect of
a defined benefit plan (whether or not qualified under Section 401(a) of
the Code), an annuity computed in whatever manner permitted under such plan
(including frequency of annuity payments, attained age (whether determined as
of a current date or as of a future date upon the commencement of annuity
payments), and nature of surviving spouse benefits, if any) that yields the
greatest Lump Sum Value.

 

1.47                         “More than 30% Owner” — see paragraph (a) of
the definition of “Change of Control.”

 

1.48                         “Notice of Consideration” — see Section 3.3(c).

 

1.49                         “Non-Qualified Plan” — see Section 2.4.

 

6

 

1.50                           “Notice of Termination” means a
written notice given in accordance with Section 10.8 that sets forth (i) the
specific termination provision in this Agreement relied on by the party giving
such notice, (ii) in reasonable detail the specific facts and circumstances
claimed to provide a basis for such Termination of Employment, and (iii) if
the Termination Date is other than the date of receipt of such Notice of
Termination, the Termination Date.

 

1.51                           “Person” means any individual, sole
proprietorship, partnership, joint venture, limited liability company, trust,
unincorporated organization, association, corporation, institution, public
benefit corporation, entity or government instrumentality, division, agency,
body or department.

 

1.52                           “Plans” means plans, programs, or
Policies of the Company.

 

1.53                           “Policies” means policies, practices
or procedures of the Company.

 

1.54                           “Post-Change Period” means the period
commencing on the Effective Date and ending on the second anniversary of the
Effective Date.

 

1.55                           “Potential Parachute Payments” — see Section 5.1.

 

1.56                           “Pro-rata Annual Bonus” means, in
respect of the Company’s fiscal year during which the Termination Date occurs,
an amount equal to the product of Executive’s Target Annual Bonus (determined
as of the Termination Date) multiplied by a fraction, the numerator of which
equals the number of days from and including the first day of such fiscal year
through and including the Termination Date, and the denominator of which equals
365.

 

1.57                           “Pro-rata LTIP Bonus” means an amount
equal to the sum of each of the following amounts:  for each LTIP Performance Period that is in
effect as of a Termination Date, Executive’s LTIP Target Award for such LTIP
Performance Period multiplied by a fraction, the numerator of which equals the
number of days from and including the beginning of such LTIP Performance Period
through and including the Termination Date, and the denominator of which equals
the aggregate number of days in such LTIP Performance Period.

 

1.58                           “Refund Claim” — see Section 5.6.

 

1.59                           “Reorganization Transaction” — see
clause (d) of the definition of “Change of Control.”

 

1.60                           “Restricted Shares” means shares of
restricted stock, restricted stock units or similar awards.

 

1.61                           “SEC” means the Securities and
Exchange Commission.

 

7

 

1.62                           “Section” means, unless the context
otherwise requires, a section of this Agreement.

 

1.63                           “SERP” means a supplemental executive
retirement Plan that is a Non-Qualified Plan.

 

1.64                           “Stock Options” means stock options,
stock appreciation rights (including limited stock appreciation rights), or
similar awards.

 

1.65                           “Subsidiary” means any corporation,
business trust, limited liability company or partnership with respect to which
Allstate owns, directly or indirectly, Voting Securities representing more than
50% of the aggregate voting power of the then-outstanding Voting Securities.

 

1.66                           “Surviving Corporation” means the
corporation resulting from a Reorganization Transaction or, if securities
representing at least 50% of the aggregate Voting Power of such resulting
corporation are directly or indirectly owned by another corporation, such other
corporation.

 

1.67                           “Target Annual Bonus” as of any date
means the amount equal to the product of Base Salary determined as of such date
multiplied by the percentage of such Base Salary to which Executive would have
been entitled immediately prior to such date under any Bonus Plan for the
Annual Performance Period for which the Annual Bonus is awarded if the
performance goals established pursuant to such Bonus Plan were achieved at the
100% level as of the end of the Annual Performance Period.

 

1.68                           “Taxes” means federal, state, local
and other income, employment and other taxes.

 

1.69                           “Termination Date” means the date of
the receipt of the Notice of Termination by Executive (if such Notice is given
by the Company) or by the Company (if such Notice is given by Executive), or
any later date, not more than 15 days after the giving of such Notice,
specified in such Notice; provided, however, that:

 

(a)                                  if Executive’s employment is terminated by
reason of death or Disability, the Termination Date shall be the date of
Executive’s death or the Disability Effective Date (as defined in Section 3.1(a)),
as applicable; and

 

(b)                                 if no Notice of Termination is given, the
Termination Date shall be the last date on which Executive is employed by the
Company.

 

1.70                           “Termination of Employment” means any termination of Executive’s
employment with the Company, whether such occurs by reason of (a) the
initiative of any Company or Executive or (b) the death of Executive;
provided that such termination is also a “separation from service” within the
meaning of Treasury Regulation 1.409A-1(h).

 

8

 

1.71                           “Voting Securities” of a corporation
means securities of such corporation that are entitled to vote generally in the
election of directors of such corporation.

 

ARTICLE II.

POST-CHANGE PERIOD

 

2.1                                 Position and Duties.

 

(a)                                  During the Post-Change Period, (x) Executive’s
authority, responsibilities (not including reporting responsibilities), and
duties shall be at least commensurate in all material respects with the most
significant of those held, exercised and assigned at any time during the 90-day
period immediately before the Effective Date and (y) Executive’s services
shall be performed at the location where Executive was employed immediately
before the Effective Date or any other location which does not constitute a
material geographic change from the former location.

 

(b)                                 During the Post-Change Period (except during
any periods of vacation to which Executive is entitled and any authorized sick,
disability or other leave of absence), Executive shall devote Executive’s full attention
and time to the business and affairs of the Company and, to the extent
necessary to discharge the duties assigned to Executive in accordance with this
Agreement, to use Executive’s best efforts to perform such duties.  During the Post-Change Period, Executive may (i) serve
on corporate, civic or charitable boards or committees, (ii) deliver
lectures, fulfill speaking engagements or teach at educational institutions and
(iii) manage personal investments, so long as such activities are
consistent with the Policies of the Company at the Effective Date and do not
significantly interfere with the performance of Executive’s duties under this
Agreement.  To the extent that any such
activities have been conducted by Executive immediately prior to the Effective
Date and were consistent with the Policies of the Company at the Effective
Date, the continued conduct of such activities (or activities similar in nature
and scope) after the Effective Date shall not be deemed to interfere with the
performance of Executive’s duties under this Agreement.

 

2.2                                 Compensation.

 

(a)                                  Base Salary.  During the Post-Change Period,
the Company shall pay or cause to be paid to Executive an annual base salary in
cash, which shall be paid in a manner consistent with the Company’s payroll
practices in effect immediately before the Effective Date, at an annual rate
not less than 12 times the highest monthly base salary paid or payable to
Executive by the Company in respect of the 12-month period immediately before
the Effective Date (such annual rate salary, the “Base Salary”).  During the Post-Change Period, the Base
Salary shall be reviewed at least annually and shall be increased at any time
and from time to time as shall be substantially consistent with increases in
base salary awarded to other peer executives of the Company. Any increase in
Base Salary shall not limit or 

 

9

 

reduce any other obligation of the Company to Executive under this
Agreement.  After any such increase, the
Base Salary shall not be reduced and “Base Salary” shall thereafter refer to
the increased amount.

 

(b)                                 Annual Bonus.  The
Company shall also pay or cause to be paid to Executive a bonus (the “Annual
Bonus”), which shall not be less than the Target Annual Bonus determined as
of the Effective Date, for each Annual Performance Period that ends during the
Post-Change Period.  “Annual
Performance Period” means each period designated in accordance with any
annual bonus arrangement or Plan (a “Bonus Plan”) that is based on
performance and approved by the Board or any committee of the Board, or in the
absence of any Bonus Plan or any such designated period of time, each calendar
year.

 

(c)                                  LTIP Bonus.  The Company shall also:

 

(i)                                     pay or cause to be paid to Executive an LTIP
Bonus equal to the LTIP Target Award for each LTIP Award for which an LTIP
Performance Period is in effect as of the Effective Date; and

 

(ii)                                  throughout the Post-Change Period, grant LTIP
Awards to Executive as follows:

 

(1)                                  LTIP Awards shall be granted no less
frequently than is contemplated by the terms of the LTIP and the Company’s
practices thereunder, as such terms and practices are in effect immediately
prior to the Effective Date;

 

(2)                                  each such LTIP Award shall provide for the
payment of a percentage of Executive’s Base Salary in effect at the beginning
of the Performance Period applicable to such LTIP Award that is no less than
the average of the Target LTIP Percentages (as defined below) for all of
Executive’s LTIP Awards outstanding immediately prior to the Effective Date;
and

 

(3)                                  the target performance goals established for
each such LTIP Award shall be substantially comparable to the target
performance goals under Executive’s LTIP Awards outstanding on the Effective
Date;

 

“Target LTIP Percentage” means, in respect of any LTIP Award,
the percentage of Executive’s Base Salary (determined as of the beginning of
the applicable LTIP Performance Period) that Executive would be entitled to
receive after the completion of the applicable LTIP Performance Period if the
performance goals applicable to such LTIP Award as of the date immediately
prior to the Effective Date were achieved at the 100% level.

 

10

 

(d)                                 Incentive, Savings and Retirement Plans. 
Executive shall also be entitled to participate during the Post-Change
Period in all cash and equity incentive (including long-term incentives),
savings and retirement Plans applicable to other peer executives of the
Company, but in no event shall such Plans provide Executive with incentive
(including long-term incentives), savings and retirement benefits during the
Post-Change Period that are materially less valuable or have terms materially
less favorable, in the aggregate, than the most valuable and favorable of those
provided by the Company for Executive under such Plans as in effect at any time
during the 90-day period immediately before the Effective Date.

 

(e)                                  Welfare Benefit Plans. 
During the Post-Change Period, Executive and Executive’s family shall be
eligible to participate in, and receive all benefits under, welfare benefit
Plans provided by the Company (including medical, prescription, dental,
disability, salary continuance, individual life, group life, dependent life,
accidental death and travel accident insurance Plans) and applicable to other
peer executives of the Company and their families, but in no event shall such
Plans provide benefits during the Post-Change Period that are materially less
favorable, in the aggregate, than the most favorable of those provided to
Executive under such Plans as in effect at any time during the 90-day period
immediately before the Effective Date.

 

(f)                                    Fringe Benefits. 
During the Post-Change Period, Executive shall be entitled to fringe
benefits in accordance with the most favorable Plans applicable to peer
executives of the Company, but in no event shall such Plans provide fringe
benefits that are materially less favorable, in the aggregate, than the most
favorable of those provided by the Company to Executive under such Plans in
effect at any time during the 90-day period immediately before the Effective
Date.

 

(g)                                 Expenses.  During the Post-Change Period,
Executive shall be entitled to prompt reimbursement of all reasonable
employment-related expenses incurred by Executive upon the Company’s receipt of
accountings in accordance with the most favorable Policies applicable to peer
executives of the Company, but in no event shall such Policies be materially
less favorable, in the aggregate, than the most favorable of those provided by
the Company for Executive under such Policies in effect at any time during the
90-day period immediately before the Effective Date.

 

(h)                                 Office and Support Staff. 
During the Post-Change Period, Executive shall be entitled to an office
or offices of a size and with furnishings and other appointments, and to
secretarial and other assistance in accordance with the most favorable Policies
applicable to peer executives of the Company, but in no event shall such
Policies be materially less favorable, in the aggregate, than the most
favorable of those provided by the Company for Executive under such Policies in
effect at any time during the 90-day period immediately before the Effective
Date.

 

11

 

(i)                                     Vacation.  During the Post-Change Period,
Executive shall be entitled to paid vacation in accordance with the most
favorable Policies applicable to peer executives of the Company, but in no
event shall such Policies be materially less favorable, in the aggregate, than
the most favorable of those provided by the Company for Executive under such
Policies in effect at any time during the 90-day period immediately before the
Effective Date.

 

2.3                                 Stock Incentive Awards.  On
the Effective Date of a Change of Control (i) all of Executive’s unvested
Stock Options then outstanding (whether granted before or after the Agreement
Date) shall immediately become fully vested and exercisable, and (ii) all
of Executive’s Restricted Shares then outstanding shall immediately become
fully vested and nonforfeitable.  This Section amends
all award agreements dated as of any date before the Agreement Date.  Accordingly, all provisions of such award
agreements relating to a change of control of the Company, including all grants
of limited stock appreciation rights, are hereby cancelled effective as of the
Agreement Date.

 

2.4                                 Unfunded Deferred Compensation.  On
the Effective Date of a Change of Control, Executive shall become fully vested
in all benefits previously accrued under any deferred compensation Plan
(including a SERP) that is not qualified under Section 401(a) of the
Code (a “Non-Qualified Plan”). 
Within five business days after the Effective Date of a Change of
Control, the Company shall pay to Executive a lump-sum cash amount equal to:

 

(a)                                  the sum of the Lump-Sum Values of all Maximum
Annuities that are payable pursuant to all defined benefit Non-Qualified Plans,
plus

 

(b)                                 the sum of Executive’s account balances under
all defined contribution Non-Qualified Plans.

 

To the extent that, if, for any reason, any portion of such
Non-Qualified Plan benefit is not so paid, the Company shall pay Executive in
lieu thereof a lump-sum cash payment equal to such unpaid portion within the
five-business day period specified in the preceding sentence.

 

ARTICLE III.

TERMINATION OF EMPLOYMENT

 

                                                3.1                                 Disability.

 

(a)                                  During the Post-Change Period, the Company
may terminate Executive’s employment because of Executive’s Disability by
giving Executive or his legal representative, as applicable, (i) written
notice in accordance with Section 10.8 of the Company’s intention to
terminate Executive’s employment pursuant to this Section and (ii) a
certification of Executive’s Disability by a physician selected by the Company
or its insurers, subject to the consent of Executive or Executive’s legal
representative, which consent shall not be

 

12

 

unreasonably withheld or delayed. 
Executive’s employment shall terminate effective on the 30th day (the “Disability
Effective Date”) after Executive’s receipt of such notice unless, before
the Disability Effective Date, Executive shall have resumed the full-time
performance of Executive’s duties.

 

(b)                                 “Disability” means any medically
determinable physical or mental impairment of an Executive that:

 

(i)                                     has lasted for a continuous period of not
less than (x) six months or (y) such longer period, if any, that is
available to Executive under the Company’s Policies relating to the
continuation of employee status after the onset of disability, as such Policies
are in effect when Disability is determined, but in no event shall such
Policies be materially less favorable to the Executive than the most favorable
of such Policies in effect for peer executives at any time during the 90-day
period immediately before the Effective Date,

 

(ii)                                  can be expected to be permanent or of
indefinite duration, and

 

(iii)                               renders Executive unable to perform the
duties required under this Agreement.

 

3.2                                 Death.  Executive’s employment shall
terminate automatically upon Executive’s death during the Post-Change Period.

 

3.3                                 Cause.

 

(a)                                  During the Post-Change Period, the Company
may terminate Executive’s employment for Cause solely in accordance with all of
the substantive and procedural provisions of this Section.

 

(b)                                 “Cause” means any one or more of the
following:

 

(i)                                    Executive’s conviction of a felony or other
crime involving fraud, dishonesty or moral turpitude;

 

(ii)                                Executive’s willful or reckless material
misconduct in the performance of Executive’s duties;

 

(iii)                             Executive’s habitual neglect of duties; or

 

(iv)                              Executive’s willful or intentional breach of
this Agreement;

 

provided, however, that for purposes of clauses (ii), (iii), and (iv),
Cause shall not include any one or more of the following:

 

13

 

(1)                                  bad judgment or negligence;

 

(2)                                  any act or omission believed by Executive in
good faith to have been in or not opposed to the interest of the Company
(without intent of Executive to gain, directly or indirectly, a profit to which
Executive was not legally entitled);

 

(3)                                  any act or omission with respect to which a
determination could properly have been made by the Board that Executive had
satisfied the applicable standard of conduct for indemnification or
reimbursement under Allstate’s by-laws, any applicable indemnification
agreement, or applicable law, in each case as in effect at the time of such act
or omission; or

 

(4)                                  any act or omission with respect to which
Executive receives a Notice of Consideration (as defined below) more than six
months after the earliest date on which any member of the Board, not a party to
the act or omission, knew or should have known of such act or omission; and

 

further provided, that if a breach of this Agreement involved an act or
omission based on Executive’s good faith and reasonable belief that Executive’s
act or omission was in the best interests of the Company or was required by
applicable law or administrative regulation, such breach shall not constitute
Cause unless the Company gives Executive written notice of such breach that
specifically refers to this Section and, within 30 days after such notice
is given, Executive fails to cure such breach to the fullest extent that it is
curable.

 

(c)                                  The Company shall strictly observe each of
the following procedures in connection with any Termination of Employment for
Cause:

 

(i)                                     A meeting of the Board shall be called for
the stated purpose of determining whether Executive’s acts or omissions satisfy
the requirements of Section 3.3(b) and, if so, whether to terminate
Executive’s employment for Cause.

 

(ii)                                  Not less than 30 days prior to the date of
such Board meeting, the Company shall provide Executive and each member of the
Board written notice (a “Notice of Consideration”) that includes (x) a
detailed description of the acts or omissions alleged to constitute Cause, (y) the
date, time and location of such meeting of the Board and (z) Executive’s
rights under clause (iii) below.

 

(iii)                               Executive shall have the opportunity to
present to the Board a written response to the Notice of Consideration.  Executive shall not have any right to appear
before the Board.

 

14

 

(iv)                              Executive’s employment may be terminated for
Cause only if (x) the acts or omissions specified in the Notice of
Consideration did in fact occur and do constitute Cause as defined in this
Section, (y) the Board makes a specific determination to such effect and
to the effect that Executive’s employment should be terminated for Cause and (z) the
Company thereafter provides Executive with a Notice of Termination which
specifies in specific detail the basis of such Termination of Employment for
Cause and which Notice shall be consistent with the reasons set forth in the
Notice of Consideration.  The Board’s
determination specified in clause (y) of the preceding sentence shall
require the affirmative vote of at least 75% of the members of the Board.

 

(v)                                 In the event that the existence of Cause shall
become an issue in any action or proceeding between the Company and Executive,
the Company shall, notwithstanding the determination referenced in clause (iv) of
this Section 3.3(c), have the burden of establishing that the actions or
omissions specified in the Notice of Consideration did in fact occur and do
constitute Cause and that the Company has satisfied the procedural requirements
of this Section 3.3(c).  The
satisfaction of the Company’s burden shall require clear and convincing
evidence.

 

3.4                                 Good Reason.

 

(a)                                  During the Post-Change Period, Executive may
terminate his employment for Good Reason in accordance with the substantive and
procedural provisions of this Section.  A
Termination of Employment for Good Reason will be deemed to have occurred
during the Post-Change Period if Executive gives notice as provided in Section 3.4(d) within
the Post-Change Period and the Termination of Employment is no more than thirty
(30) days after the expiration of the cure period described in Section 3.4(e).

 

(b)                                 “Good Reason” means the first to occur
of the following actions or omissions that, unless otherwise specified, occurs
during a Post-Change Period without the consent of Executive:

 

(i)                                     a material diminution in Executive’s base
compensation;

 

(ii)                                  any material diminution in Executive’s
authority, duties, or responsibilities as set forth in Paragraph 2.1(a);

 

(iii)                               any material diminution in the authority,
duties, or responsibilities of the person to whom Executive reports;

 

(iv)                              a material change in the geographic location
at which Executive must perform services; or

 

15

 

(v)                                 any other action or inaction that constitutes
a material breach of this Agreement by the Company.

 

(c)                                  Any reasonable determination by Executive
that any of the events specified in subsection (b) above has occurred and
constitutes Good Reason shall be conclusive and binding for all purposes,
unless the Company establishes by clear and convincing evidence that Executive
did not have any reasonable basis for such determination.

 

(d)                                 In the event of any Termination of Employment
by Executive for Good Reason, Executive shall notify the Company of the events
constituting such Good Reason by a Notice of Termination within ninety days of
the date Executive should have known of the events constituting Good Reason.

 

(e)                                   Company shall have thirty days from the date
Executive provides Notice of Termination pursuant to Section 3.4(d) to
remedy the conditions constituting Good Reason during which period no
termination for Good Reason shall be deemed to have occurred.

 

(f)                                    If the Company has not remedied the
conditions constituting Good Reason within the thirty-day period described in Section 3.4(e),
then, in order for Executive’s termination to constitute a termination for Good
Reason, the date of Termination of Employment must occur no later than twelve
(12) months after the date of the first action or omission constituting Good Reason.

 

ARTICLE IV.

COMPANY’S OBLIGATIONS UPON A TERMINATION OF EMPLOYMENT

 

4.1                                 If by Executive for Good Reason or by the
Company Other Than for Cause or Disability.  If, during the Post-Change
Period, the Company terminates Executive’s employment other than for Cause or
Disability, or if Executive terminates employment for Good Reason, the Company’s
sole obligations to Executive under Sections 2.1 and 2.2 and this Article shall
be as follows:

 

(a)                                  The Company shall pay Executive, in addition
to all vested rights arising from Executive’s employment as specified in Article II,
a lump-sum cash amount equal to the sum of the following:

 

(i)                                     all Accrued Obligations;

 

(ii)                                  Executive’s Pro-rata Annual Bonus reduced
(but not below zero) by the amount of any Annual Bonus paid to Executive with
respect to the Company’s fiscal year in which the Termination Date occurs;

 

16

 

(iii)                             Executive’s Pro-rata LTIP Bonus reduced (but
not below zero) by the amount of any LTIP Bonus paid to Executive with respect
to the Company’s fiscal year in which the Termination Date occurs;

 

(iv)                            all amounts previously deferred by, or
accrued to the benefit of, Executive under any defined contribution
Non-Qualified Plans, whether or not vested, together with any accrued earnings
thereon, to the extent that such amounts and earnings have not been previously
paid by the Company (whether pursuant to Section 2.4 or otherwise);

 

(v)                               an amount equal to two (2.0) times the sum of
(y) Base Salary, and (z) the Target Annual Bonus, each determined as
of the Termination Date; provided, however, that any reduction in Executive’s
Base Salary or Target Annual Bonus that would qualify as Good Reason shall be
disregarded for this purpose; and

 

(vi)                            to the extent not paid pursuant to clause (iv) of
this Section 4.1(a), an amount equal to the sum of the value of the
unvested portion of Executive’s accounts or accrued benefits under any defined
contribution Plan (whether or not qualified under Section 401(a) of
the Code) maintained by the Company as of the Termination Date and forfeited by
Executive by reason of the Termination of Employment.

 

Such lump-sum amount shall be
paid no more than five business days after the date of Termination of
Employment.

 

(b)                               The Company shall pay Executive, in lieu of
all benefits under all defined benefit Non-Qualified Plans that have accrued on
or before the Termination Date but remain unpaid as of such date, a lump-sum
cash amount equal to the positive difference, if any, between:

 

(i)                                   the sum of the Lump-Sum Values of each
Maximum Annuity that would be payable to Executive under any defined benefit
Plan (whether or not qualified under Section 401(a) of the Code) if
Executive had:

 

(1)                                become fully vested in all such benefits to
the extent that such benefits are unvested as of the Termination Date,

 

(2)                                attained as of the Termination Date an age
that is two years greater than Executive’s actual age,

 

(3)                                accrued a number of years of service (for
purposes of determining the amount of such benefits, entitlement to early
retirement benefits, and all other purposes of such defined benefit plans) that
is two years greater than the number of years of service actually accrued by
Executive as of the Termination Date, and

 

17

 

(4)                                received the lump-sum severance benefits
specified in Section 4.1(a) (excluding all LTIP Bonuses, and all
amounts in respect of Stock Options or Restricted Shares, if any) as covered
compensation in equal monthly installments during the two-year period following
Termination of Employment,

 

minus

 

(ii)                                the sum of (x) the Lump-Sum Values of
the Maximum Annuity benefits vested and payable (whether currently or at some
future date) to Executive under each defined benefit Plan that is qualified
under Section 401(a) of the Code and (y) the aggregate amounts
simultaneously or previously paid (whether pursuant to Section 2.4 or otherwise)
to Executive under the defined benefit Plans (whether or not qualified under Section 401(a) of
the Code) described in clause (i) of this Section 4.1(b).

 

Such lump-sum amount shall
be paid no more than five business days after the date of Termination of
Employment.

 

(c)                                (i) On the date of Termination of
Employment, all of Executive’s unvested Stock Options then outstanding (whether
granted before or after the Agreement Date) shall immediately become fully
vested and exercisable, and (ii) all of Executive’s Restricted Shares then
outstanding shall immediately become fully vested and nonforfeitable. This Section
amends all award agreements dated as of any date before the Agreement Date.
Accordingly, all provisions of such award agreements relating to a change of
control of the Company, including all grants of limited stock appreciation
rights, are hereby cancelled effective as of the Agreement Date.

 

(d)                               All of Executive’s then-outstanding Stock
Options that were granted after the Agreement Date, whether vested on or before
the date of Termination of Employment, shall thereafter remain exercisable
until the last to occur of (x) the first anniversary of the date of
Termination of Employment, and (y) any period provided in the applicable
stock option agreement or stock option plan as then in effect, but in no event
shall such period of exercisability continue after the earlier of (i) the
date on which such Stock Options would have expired if Executive had remained
an employee of the Company, or (ii) the tenth anniversary of the original
date of the Stock Option grant.

 

(e)                                Within five business days after the date of
Executive’s Termination of Employment, the Company shall deliver to Executive
certificates for all Restricted Shares theretofore held by or on behalf of the
Company.

 

(f)                                  The Company shall pay on behalf of Executive
all reasonable fees and costs charged by the outplacement firm selected by
Executive to provide outplacement services to 

 

18

 

Executive that are incurred
no later than the end of the second year following the year in which the
Termination of Employment occurs.

 

(g)                               During the period of time which Executive
would be entitled to continuation coverage under a Company-sponsored group
health plan under Section 4980 of the Code or such later date as any Plan
may specify, the Company shall continue to make available to Executive and
Executive’s family welfare benefits (including medical, prescription, dental,
disability, salary continuance, individual life, group life, accidental death
and travel accident insurance plans and programs) that are at least as
favorable as the most favorable Plans of the Company applicable to other peer
executives and their families as of the Termination Date, but which are in no
event less favorable than the most favorable Plans of the Company applicable to
other peer executives and their families during the 90-day period immediately
before the Effective Date. The cost of such welfare benefits, including
continuation coverage required by Section 4980 of the Code (“COBRA”), to
Executive shall not exceed the cost of such benefits to Executive immediately
before the Termination Date or, if less, the Effective Date. Executive’s rights
under this Section shall be co-extensive with any post-termination
continuation coverage Executive may have pursuant to applicable law, including
COBRA. Accordingly, in order to receive this coverage, Executive shall timely
elect continuation coverage under COBRA for Executive and Executive’s covered
dependents. Notwithstanding any of the above, such welfare benefits shall be
secondary to any similar welfare benefits provided by Executive’s subsequent
employer as provided in the Plans.

 

4.2                                 If by the Company for Cause.  If
the Company terminates Executive’s employment for Cause during the Post-Change
Period, the Company’s sole obligation to Executive under Sections 2.1 and 2.2
and this Article shall be to pay Executive a lump-sum cash amount equal to
all Accrued Obligations determined as of the Termination Date.

 

4.3                                 If by Executive Other Than for Good Reason.  If
Executive terminates employment during the Post-Change Period other than for
Good Reason, Disability or death, the Company’s sole obligation to Executive
under Sections 2.1 and 2.2 and this Article shall be to pay Executive a
lump-sum cash amount equal to all Accrued Obligations determined as of the
Termination Date.

 

4.4                                 If by the Company for Disability.  If
the Company terminates Executive’s employment by reason of Executive’s Disability
during the Post-Change Period, the Company’s sole obligation to Executive under
Sections 2.1 and 2.2 and this Article shall be as follows:

 

(a)                                to pay Executive a lump-sum cash amount equal
to all Accrued Obligations determined as of the Termination Date, and

 

(b)                               to provide Executive disability and other
benefits after the Termination Date that are not less favorable to Executive
than the most favorable of such benefits then available under Plans of the
Company to disabled peer executives of the Company.

 

19

 

Such disability and other benefits shall also be not
materially less favorable, in the aggregate, to Executive than the most
favorable of the disability and other benefits available to Executive under such
Plans in effect at any time during the 90-day period immediately preceding the
Effective Date.

 

4.5                                 If Upon Death.  If
Executive’s employment is terminated by reason of Executive’s death during the
Post-Change Period, the Company’s sole obligations to Executive under Sections
2.1 and 2.2 and this Article shall be as follows:

 

(a)                                to pay Executive’s estate or Beneficiary a
lump-sum cash amount equal to all Accrued Obligations; and

 

(b)                               to provide Executive’s estate or Beneficiary
survivor and other benefits that are not less than the most favorable survivor
and other benefits then available under Plans of the Company to the estates or
the surviving families of peer executives of the Company.

 

Such survivor benefits shall also be no less
favorable, in the aggregate, than the most favorable of the survivor benefits
available to Executive under such Plans in effect at any time during the 90-day
period immediately preceding the Effective Date.

 

4.6                                 Amount Contested.

 

(a)                                In the event of any dispute between the
Company and Executive as to the nature or extent of the Company’s obligation to
make any payments or provide other benefits to Executive or Executive’s family
pursuant to Sections 4.1 or 2.4, Executive shall have the right, exercisable by
written notice given to the Company within 90 days after the Executive believes
a payment or provision of benefits should have occurred, to obtain, within 30
days after the Company’s receipt of Executive’s demand therefor, a written
certificate prepared by the Company and certified by Allstate’s independent
auditors (a “Section 4.6 Certificate”). The Section 4.6
Certificate shall specify in detail either (i) the amount and nature of
each payment or other benefit that the Company believes is then due and owing
to Executive pursuant to Section 2.4 or 4.1, as applicable, or (ii) if
the Company asserts that the conditions to Executive’s entitlement to severance
or other benefits pursuant to Section 4.1 or 2.4, as applicable, have for
any reason not been satisfied, the amount and nature of each payment or other
benefit that the Company believes would be due and owing to Executive pursuant
to Section 4.1 or 2.4, as applicable, if all of such applicable conditions
had been fully satisfied. Executive may not demand more than one Section 4.6
Certificate in respect of his rights under Section 4.1 or more than one Section 4.6
Certificate in respect of his rights under Section 2.4.

 

(b)                               Each Section 4.6 Certificate shall
include schedules that specify in detail how each amount or other benefit
specified therein was computed, together with appropriate references to
specific provisions of this Agreement or of any applicable Plans or Policies of
the Company, copies of which Plans or Policies shall be attached to such
schedules.

 

20

 

(c)                                The Company shall be precluded from asserting
that any portion of the payments or other benefits due to Executive pursuant to
Section 4.1 or 2.4, as applicable, is less than the amount specified in
the Section 4.6 Certificate. The Section 4.6 Certificate shall in no
event be binding on Executive and Executive shall have the right to assert that
any or all of the payments or other benefits to be provided pursuant to Section 4.1
or 2.4 are greater than or different from those specified in the Section 4.6
Certificate.

 

(d)                               If the Company shall for any reason fail to
deliver to Executive a Section 4.6 Certificate in compliance with this Section within
30 days after the Company’s receipt of Executive’s written demand therefor,
Executive’s determination of the amount and nature of payments or other
benefits due to Executive (i) pursuant to Section 4.1 and set forth
in an Executive’s Severance Determination (as defined below) or (ii) pursuant
to Section 2.4 and set forth in an Executive’s Deferred Compensation
Determination (as defined below) shall be conclusive and binding for all
purposes of this Agreement unless the Company shall establish, by clear and
convincing evidence, that Executive’s Severance Determination or Executive’s
Deferred Compensation Determination, as applicable, is incorrect and that a
different amount (which may be zero or a positive amount) or nature of payments
or other benefits is correct. “Executive’s Severance Determination”
means an opinion of nationally recognized executive compensation counsel to the
effect that the amount and nature of severance and other benefits due to
Executive pursuant to Section 4.1 is the amount and nature that a court of
competent jurisdiction, based on a final judgment not subject to further
appeal, is most likely to decide to have been calculated in accordance with
this Agreement and applicable law. “Executive’s Deferred Compensation
Determination” means an opinion of nationally recognized executive
compensation counsel to the effect that the amount of payments due to Executive
pursuant to Section 2.4 is the amount that a court of competent
jurisdiction, based on a final judgment not subject to further appeal, is most
likely to decide to have been calculated in accordance with this Agreement and
applicable law.

 

ARTICLE V.

CERTAIN ADDITIONAL PAYMENTS
BY THE COMPANY

 

5.1                                 Gross-up for Certain Taxes.

 

(a)                                If it is determined by Allstate’s independent
auditors that any monetary or other benefit received or deemed received by Executive
from the Company or any Affiliate pursuant to this Agreement or otherwise,
whether or not in connection with a Change of Control (such monetary or other
benefits collectively, the “Potential Parachute Payments”), is or will
become subject to any excise tax under Section 4999 of the Code or any
similar tax under any United States federal, state, local or other law other
than Section 409A of the Code (such excise tax and all such similar taxes
collectively, “Excise Taxes”), then the Company shall, subject to
Sections 5.6 and 5.7, within five business days after such determination, pay Executive
an amount (the “Gross-Up Payment”) equal to the product of:

 

21

 

(i)                                   the amount of such Excise Taxes

 

multiplied
by

 

(ii)                                the Gross-Up Multiple (as defined in Section 5.4).

 

The
Gross-Up Payment is intended to compensate Executive for all Excise Taxes
payable by Executive with respect to Potential Parachute Payments and all Taxes
or Excise Taxes payable by Executive with respect to the Gross-Up Payment. The
Company shall not compensate Executive for any taxes, penalties or interest
related to Section 409A of the Code payable by Executive.

 

(b)                               The determination of Allstate’s independent
auditors described in Section 5.1(a), including the detailed calculations
of the amounts of the Potential Parachute Payments, Excise Taxes and Gross-Up
Payment and the assumptions relating thereto, shall be set forth in a written
certificate of such auditors (the “Company Certificate”) delivered to
Executive. Executive or the Company may at any time request the preparation and
delivery to Executive of a Company Certificate. The Company shall cause the
Company Certificate to be delivered to Executive as soon as reasonably possible
after such request.

 

5.2                                 Determination by Executive.

 

(a)                                If (i) the Company shall fail to deliver
a Company Certificate to Executive within 30 days after its receipt of his
written request therefor, or (ii) within 90 days after Executive’s receipt
of a Company Certificate, Executive provides notice to Company that Executive
disputes either (x) the amount of the Gross-Up Payment set forth therein
or (y) the determination set forth therein to the effect that no Gross-Up
Payment is due by reason of Section 5.7 or otherwise, and Executive takes
further measures within 180 days to enforce the Gross-Up Payment, then
Executive may elect to require the Company to pay a Gross-Up Payment in the
amount determined by Executive as set forth in an Executive Counsel Opinion (as
defined in Section 5.5).  Any such
demand by Executive shall be made by delivery to the Company of a written
notice that specifies the Gross-Up Payment determined by Executive (together
with the detailed calculations of the amounts of Potential Parachute Payments,
Excise Taxes and Gross-Up Payment and the assumptions relating thereto) and an
Executive Counsel Opinion regarding such Gross-Up Payment (such written notice
and opinion collectively, the “Executive’s Gross-Up Determination”).  Within 30 days after delivery of an Executive’s
Gross-Up Determination to the Company, the Company shall either (i) pay
Executive the Gross-Up Payment set forth in the Executive’s Gross-Up
Determination (less the portion thereof, if any, previously paid to Executive
by the Company) or (ii) deliver to Executive a Company Certificate and a
Company Counsel Opinion (as defined in Section 5.5), and pay Executive the
Gross-Up Payment specified in such Company Certificate. If for any reason the
Company fails to comply with the preceding

 

22

 

sentence, the Gross-Up
Payment specified in the Executive’s Gross-Up Determination shall be
controlling for all purposes.

 

(b)                               If Executive does not request a Company
Certificate, and the Company does not deliver a Company Certificate to
Executive, then (i) the Company shall, for purposes of Section 5.7,
be deemed to have determined that no Gross-Up Payment is due and (ii) Executive
shall not pay any Excise Taxes in respect of Potential Parachute Payments
except in accordance with Sections 5.6(a) or (d).

 

5.3                                 Additional Gross-up Amounts. If for any reason (whether pursuant to
subsequently enacted provisions of the Code, other than Section 409A of
the Code, final regulations or published rulings of the IRS, a final judgment
of a court of competent jurisdiction, a determination of the Company’s
independent auditors set forth in a Company Certificate or, subject to the last
two sentences of Section 5.2(a), an Executive’s Gross-Up Determination) it
is later determined that the amount of Excise Taxes payable by Executive is
greater than the amount determined by the Company or Executive pursuant to Section 5.1
or 5.2, as applicable, then the Company shall, subject to Sections 5.6 and 5.7,
pay Executive within 30 days after the determination, an amount (which shall
also be deemed a Gross-Up Payment) equal to the product of:

 

(a)                                the sum of (i) such additional Excise
Taxes and (ii) any interest, penalties, expenses or other costs incurred
by Executive as a result of having taken a position in accordance with a
determination made pursuant to Section 5.1 or 5.2, as applicable,

 

multiplied by

 

(b)                               the Gross-Up Multiple.

 

5.4                                 Gross-up Multiple. The “Gross-Up Multiple” shall equal
a fraction, the numerator of which is one (1.0), and the denominator of which
is one (1.0) minus the lesser of (i) the sum, expressed as a decimal
fraction, of the effective after-tax marginal rates of all Taxes and any Excise
Taxes applicable to the Gross-Up Payment or (ii) 0.80, it being intended
that the Gross-Up Multiple shall in no event exceed five (5.0).  (If different rates of tax are applicable to
various portions of a Gross-Up Payment, the weighted average of such rates
shall be used.)  For purposes of this
Section, Executive shall be deemed to be subject to the highest effective
after-tax marginal rate of Taxes.

 

5.5                                 Opinion of Counsel. “Executive Counsel Opinion” means an
opinion of nationally recognized executive compensation counsel to the effect (i) that
the amount of the Gross-Up Payment determined by Executive pursuant to Section 5.2
is the amount that a court of competent jurisdiction, based on a final judgment
not subject to further appeal, is most likely to decide to have been calculated
in accordance with this Article and applicable law and (ii) if the
Company has previously delivered a Company Certificate to Executive, that there
is no reasonable basis or no substantial authority for the calculation of the
Gross-Up Payment set forth in the Company Certificate. “Company Counsel
Opinion” means an opinion of nationally recognized executive compensation
counsel to the effect that (i) the amount of the Gross-Up Payment set
forth in the 

 

23

 

Company Certificate is the amount that a court of
competent jurisdiction, based on a final judgment not subject to further
appeal, is most likely to decide to have been calculated in accordance with
this Article and applicable law and (ii) for purposes of Section 6662
of the Code, Executive has substantial authority to report on his federal
income tax return the amount of Excise Taxes set forth in the Company
Certificate.

 

5.6                                 Amount Increased or Contested.

 

(a)                                Executive shall notify the Company in writing
(an “Executive’s Notice”) of any claim by the IRS or other taxing
authority (an “IRS Claim”) that, if successful, would require the
payment by Executive of Excise Taxes in respect of Potential Parachute Payments
in an amount in excess of the amount of such Excise Taxes determined in
accordance with Section 5.1 or 5.2, as applicable. Executive’s Notice
shall include the nature and amount of such IRS Claim, the date on which such
IRS Claim is due to be paid (the “IRS Claim Deadline), and a copy of all
notices and other documents or correspondence received by Executive in respect
of such IRS Claim. Executive shall give the Executive’s Notice as soon as
practicable, but no later than the earlier of (i) 10 business days after
Executive first obtains actual knowledge of such IRS Claim or (ii) five
business days before the IRS Claim Deadline; provided, however, that any
failure to give such Executive’s Notice shall affect the Company’s obligations
under this Article only to the extent that the Company is actually
prejudiced by such failure. If at least one business day before the IRS Claim
Deadline the Company shall:

 

(i)                                     deliver to Executive a Company Certificate to
the effect that the IRS Claim has been reviewed by the Company’s independent
auditors and, notwithstanding the IRS Claim, the amount of Excise Taxes,
interest or penalties payable by Executive is less than the amount specified in
the IRS Claim,

 

(ii)                                  pay to Executive an amount (which shall also
be deemed a Gross-Up Payment) equal to the positive difference between the
product of (x) the amount of Excise Taxes, interest and penalties
specified in the Company Certificate, if any, multiplied by (y) the
Gross-Up Multiple, less the portion of such product, if any, previously paid to
Executive by the Company, and

 

(iii)                               direct Executive pursuant to Section 5.6(d) to
contest the balance of the IRS Claim,

 

then Executive shall pay
only the amount, if any, of Excise Taxes, interest and penalties specified in
the Company Certificate. In no event shall Executive pay an IRS Claim earlier
than 30 days after having given an Executive’s Notice to the Company (or, if
sooner, the IRS Claim Deadline).

 

(b)                               At any time after the payment by Executive of
any amount of Excise Taxes or related interest or penalties in respect of
Potential Parachute Payments (whether or not 

 

24

 

such amount was based on a
Company Certificate, an Executive’s Gross-Up Determination or an IRS Claim),
the Company may in its discretion require Executive to pursue a claim for a
refund (a “Refund Claim”) of all or any portion of such Excise Taxes,
interest or penalties as the Company may specify by written notice to
Executive.

 

(c)                                If the Company notifies Executive in writing
that the Company desires Executive to contest an IRS Claim or to pursue a
Refund Claim, Executive shall:

 

(i)                                     give the Company all information that it
reasonably requests in writing from time to time relating to such IRS Claim or
Refund Claim, as applicable,

 

(ii)                                  take such action in connection with such IRS
Claim or Refund Claim (as applicable) as the Company reasonably requests in
writing from time to time, including accepting legal representation with
respect thereto by an attorney selected by the Company, subject to the approval
of Executive (which approval shall not be unreasonably withheld or delayed),

 

(iii)                               cooperate with the Company in good faith to
contest such IRS Claim or pursue such Refund Claim, as applicable,

 

(iv)                              permit the Company to participate in any
proceedings relating to such IRS Claim or Refund Claim, as applicable, and

 

(v)                                 contest such IRS Claim or prosecute Refund
Claim (as applicable) to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as the
Company may from time to time determine in its discretion.

 

The Company shall control
all proceedings in connection with such IRS Claim or Refund Claim (as
applicable) and in its discretion may cause Executive to pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
IRS or other taxing authority in respect of such IRS Claim or Refund Claim (as
applicable); provided that (i) any extension of the statute of limitations
relating to payment of taxes for the taxable year of Executive relating to the
IRS Claim is limited solely to such IRS Claim, (ii) the Company’s control
of the IRS Claim or Refund Claim (as applicable) shall be limited to issues
with respect to which a Gross-Up Payment would be payable, and (iii) Executive
shall be entitled to settle or contest, as the case may be, any other issue
raised by the IRS or other taxing authority.

 

(d)                               The Company may at any time in its discretion
direct Executive to (i) contest the IRS Claim in any lawful manner or (ii) pay
the amount specified in an IRS Claim and pursue a Refund Claim; provided,
however, that if the Company directs Executive to pay an IRS Claim and pursue a
Refund Claim, the Company shall advance the amount of such

 

25

 

payment to Executive on an interest-free basis and shall indemnify
Executive, on an after-tax basis, for any Taxes, Excise Taxes and related
interest or penalties imposed with respect to such advance.

 

(e)                                  The Company shall pay directly all legal,
accounting and other costs and expenses (including additional interest and
penalties) incurred by the Company or Executive in connection with any IRS
Claim or Refund Claim, as applicable, and shall indemnify Executive, on an
after-tax basis, for any Taxes, Excise Taxes and related interest and penalties
imposed as a result of such payment of costs and expenses.

 

5.7                                 Limitations on Gross-Up Payments.

 

(a)                                  Notwithstanding any other provision of this Article V,
if the aggregate After-Tax Amount (as defined below) of the Potential Parachute
Payments and Gross-Up Payment that, but for this Section 5.7, would be
payable to Executive, does not exceed 110% of the after-tax Floor Amount (as
defined below), then no Gross-Up Payment shall be made to Executive and the aggregate
amount of Potential Parachute Payments payable to Executive shall be reduced
(but not below the Floor Amount) to the largest amount that would both (i) not
cause any Excise Taxes to be payable by Executive and (ii) not cause any
Potential Parachute Payments to become nondeductible by the Company by reason
of Section 280G of the Code (or any successor provision).  For purposes of the preceding sentence, Executive
shall be deemed to be subject to the highest effective after-tax marginal rate
of Taxes.

 

(b)                                 For purposes of this Agreement:

 

(i)                                     “After-Tax Amount” means the portion
of a specified amount that would remain after payment of all Taxes and Excise
Taxes paid or payable by Executive in respect of such specified amount; and

 

(ii)                                  “Floor Amount” means the greatest
pre-tax amount of Potential Parachute Payments that could be paid to Executive
without causing Executive to become liable for any Excise Taxes in connection
therewith; and

 

(iii)                               “After-Tax Floor Amount” means the
After-Tax Amount of the Floor Amount.

 

5.8                                 Refunds.  If, after the receipt by
Executive of any payment or advance of Excise Taxes by the Company pursuant to
this Article, Executive receives any refund with respect to such Excise Taxes,
Executive shall (subject to the Company’s complying with any applicable
requirements of Section 5.6) promptly pay the Company the amount of such
refund (together with any interest paid or credited thereon after Taxes
applicable thereto).  If, after the
receipt by Executive of an amount advanced by the Company pursuant to Section 5.6,
a determination is made that Executive shall not be entitled to any refund with
respect to such claim and the Company does not notify Executive in writing of
its intent to contest such determination within 30 days after the

 

26

 

Company receives written notice of such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.  Any contest
of a denial of refund shall be controlled by Section 5.6.

 

ARTICLE VI.

EXPENSES AND INTEREST

 

6.1                                 Legal and Other Expenses.

 

(a)                                  If Executive incurs legal fees (including
fees in connection with the delivery of an Executive Counsel Opinion) or other
expenses (including expert witness and accounting fees) in an effort to
determine, secure, preserve, establish entitlement to, or obtain benefits under
this Agreement (collectively, “Legal and Other Expenses”), the Company
shall, regardless of the outcome of such effort, pay or reimburse Executive for
such Legal and Other Expenses in accordance with Section 6.1(b).

 

(b)                                 All Legal and Other Expenses shall be paid or
reimbursed on a monthly basis within 10 days after Allstate’s receipt of
Executive’s written request accompanied by evidence that such Legal and Other
Expenses were incurred.

 

(c)                                  If Executive does not prevail (after
exhaustion of all available judicial remedies) in respect of a claim by Executive
or by the Company hereunder, and the Company establishes before a court of
competent jurisdiction, by clear and convincing evidence, that Executive had no
reasonable basis for his claim hereunder, or for his response to the Company’s
claim thereunder, or acted in bad faith, no further payment of or reimbursement
for Legal and Other Expenses shall be due to Executive in respect of such claim
and Executive shall refund any amounts previously paid or reimbursed hereunder
with respect to such claim.

 

6.2                                 Interest.  If the Company does not pay an
amount due to Executive under this Agreement within five business days after
such amount first became due and owing, interest shall accrue on such amount
from the date it became due and owing until the date of payment at an annual
rate equal to 200 basis points above the base commercial lending rate published
in The Wall Street Journal in effect from
time to time during the period of such nonpayment.

 

ARTICLE VII.

NO SET-OFF OR MITIGATION

 

7.1                                 No Set-off by Company. 
Executive’s right to receive when due the payments and other benefits
provided for under this Agreement is absolute, unconditional and subject to no
set-off, counterclaim or legal or equitable defense.  Time is of the essence in the performance by
the

 

27

 

Company of its obligations under this Agreement.  Any claim that the Company may have against
Executive, whether for a breach of this Agreement or otherwise, shall be
brought in a separate action or proceeding and not as part of any action or
proceeding brought by Executive to enforce any rights against the Company under
this Agreement, except if (i) the Company’s claim is determined by a court
to be a compulsory counterclaim under applicable law or (ii) if a court
determines that the Company would otherwise be materially prejudiced if its
claim were to be brought in a separate action.

 

7.2                                 No Mitigation. 
Executive shall not have any duty to mitigate the amounts payable by the
Company under this Agreement by seeking new employment or self-employment
following termination.  Except as
specifically otherwise provided in this Agreement, all amounts payable pursuant
to this Agreement shall be paid without reduction regardless of any amounts of
salary, compensation or other amounts that may be paid or payable to Executive
as the result of Executive’s employment by another employer or self-employment.

 

ARTICLE VIII.

RESTRICTIVE COVENANTS

 

8.1                                 Non-Competition.  If
Executive remains employed by the Company on the Effective Date, Executive
shall not at any time during the period beginning on the Effective Date and
ending on the first anniversary of the Termination Date, directly or
indirectly, in any capacity:

 

(a)                                  engage or participate in, become employed by,
serve as a director of, or render advisory or consulting or other services in
connection with, any Competitive Business; provided, however, that this Section 8.1(a) shall
not preclude Executive from being an employee of, or consultant to, any
business unit of a Competitive Business if (i) such business unit does not
qualify as a Competitive Business in its own right and (ii) Executive does
not have any direct or indirect involvement in, or responsibility for, any
operations of such Competitive Business that cause it to qualify as a
Competitive Business; or

 

(b)                                 make or retain any financial investment,
whether in the form of equity or debt, or own any interest, in any Competitive
Business; provided, however, that nothing in this subsection shall restrict
Executive from making an investment in any Competitive Business if such
investment (i) represents no more than 1% of the aggregate market value of
the outstanding capital stock or debt (as applicable) of such Competitive
Business, (ii) does not give Executive any right or ability, directly or
indirectly, to control or influence the policy decisions or management of such
Competitive Business, and (iii) does not create a conflict of interest
between Executive’s duties under this Agreement and his interest in such
investment.

 

28

 

8.2                                 Non-Solicitation.  If
Executive remains employed by the Company on the Effective Date, Executive
shall not at any time during the period beginning on the Effective Date and
ending on the first anniversary of the Termination Date, directly or
indirectly:

 

(a)                                  other than in connection with the good-faith
performance of his duties as an officer of the Company, encourage any employee
or agent of the Company to terminate his relationship with the Company;

 

(b)                                 employ, engage as a consultant or adviser, or
solicit the employment or engagement as a consultant or adviser, of any
employee or agent of the Company (other than by the Company or its Affiliates),
or cause or encourage any Person to do any of the foregoing;

 

(c)                                  establish (or take preliminary steps to
establish) a business with, or encourage others to establish (or take
preliminary steps to establish) a business with, any employee or agent of the
Company; or

 

(d)                                 interfere with the relationship of the
Company with, or endeavor to entice away from the Company, any Person who or
which at any time during the period commencing one year prior to the Agreement
Date was or is a material customer or material supplier of, or maintained a
material business relationship with, the Company.

 

8.3                                 Reasonableness of Restrictive Covenants.

 

(a)                                  Executive acknowledges that the covenants
contained in Sections 8.1 and 8.2 are reasonable in the scope of the activities
restricted, the geographic area covered by the restrictions, and the duration
of the restrictions, and that such covenants are reasonably necessary to
protect the Company’s relationships with its employees, customers and suppliers.  Executive further acknowledges such covenants
are essential elements of this Agreement and that, but for such covenants, the
Company would not have entered into this Agreement.

 

(b)                                 The Company and Executive have each consulted
with their respective legal counsel and have been advised concerning the
reasonableness and propriety of such covenants. 
Executive acknowledges that his observance of the covenants contained in
Sections 8.1 and 8.2 will not deprive him of the ability to earn a livelihood
or to support his dependents.

 

29

 

8.4                                 Right to Injunction; Survival of Undertakings.

 

(a)                                  In recognition of the necessity of the
limited restrictions imposed by Sections 8.1 and 8.2, the parties agree that it
would be impossible to measure solely in money the damages that the Company
would suffer if Executive were to breach any of his obligations under such
Sections.  Executive acknowledges that
any breach of any provision of such Sections would irreparably injure the
Company.  Accordingly, Executive agrees
that the Company shall be entitled, in addition to any other remedies to which
the Company may be entitled under this Agreement or otherwise, to an injunction
to be issued by a court of competent jurisdiction, to restrain any actual
breach, or threatened breach, of such provisions, and Executive hereby waives
any right to assert any defense that the Company has an adequate remedy at law
for any such breach.

 

(b)                                 If a court determines that any of the
covenants included in this Article VIII is unenforceable in whole or in
part because of such covenant’s duration or geographical or other scope, such
court may modify the duration or scope of such provision, as the case may be,
so as to cause such covenant as so modified to be enforceable.

 

(c)                                  All of the provisions of this Article VIII
shall survive any Termination of Employment without regard to (i) the
reasons for such termination or (ii) the expiration of the Agreement Term.

 

8.5                                 Non-Disparagement.  If
Executive remains employed by the Company on the Effective Date, Executive
shall not at any time during the two-year period commencing on the Termination
Date (a) make any written or oral statement that brings the Company or any
of its then-current or former employees, officers or agents into disrepute, or
tarnishes any of their images or reputations or (b) publish, comment on or
disseminate any statements suggesting or accusing the Company or any of its
then-current or former agents, employees or officers of any misconduct or
unlawful behavior.  This Section shall
not be deemed to be breached by testimony of Executive given in any judicial or
governmental proceeding that Executive reasonably believes to be truthful at
the time given or by any other action of Executive that he reasonably believes
is taken in accordance with the requirements of applicable law or
administrative regulation.

 

30

 

ARTICLE IX.

NON-EXCLUSIVITY OF RIGHTS

 

9.1                                 Waiver of Certain Other Rights.  To
the extent Executive shall have received severance payments or other severance
benefits under any other Plan or agreement of the Company prior to receiving
severance payments or other severance benefits pursuant to Article IV, the
severance payments and other severance benefits under such Plan or agreement
shall reduce (but not below zero) the corresponding severance payments or other
severance benefits to which Executive shall be entitled under Article IV.  To the extent that Executive receives
payments or other benefits pursuant to Article IV, Executive hereby waives
the right to receive a corresponding amount of future severance payments or
other severance benefits under any other Plan or agreement of the Company.  To the extent that Executive receives
payments pursuant to Section 4.1(b), Executive hereby waives the right to
receive payments or other benefits under any Non-Qualified Plan that have
accrued as of the Termination Date.  To
the extent that Executive received payments or other benefits pursuant to Section 4.1(a)(ii) or
(iii), Executive hereby waives the right to receive any Annual Bonus or LTIP
Bonus payments with respect to the Annual Performance Period of LTIP
Performance Periods in effect as of the Termination Date.

 

9.2                                 Other Rights. 
Except as expressly provided in Section 9.1, this Agreement shall
not prevent or limit Executive’s continuing or future participation in any
benefit, bonus, incentive or other Plans provided by the Company and for which
Executive may qualify, nor shall this Agreement limit or otherwise affect such
rights as Executive may have under any other agreements with the Company.  Amounts that are vested benefits or which
Executive is otherwise entitled to receive under any Plan and any other payment
or benefit required by law at or after the Termination Date shall be payable in
accordance with such Plan or applicable law except as expressly modified by
this Agreement.

 

ARTICLE X.

MISCELLANEOUS

 

10.1                           No Assignability.  This
Agreement is personal to Executive and without the prior written consent of the
Company shall not be assignable by Executive otherwise than by will or the laws
of descent and distribution.  This
Agreement shall inure to the benefit of and be enforceable by Executive’s legal
representatives.

 

10.2                           Successors.  This Agreement shall inure to
the benefit of and be binding on the Company and its successors and
assigns.  The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the Company
to assume expressly and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform it if no such
succession had taken place.  Any
successor to the business or assets of the Company that assumes or agrees to
perform this Agreement by operation of law, contract, or otherwise shall be
jointly and severally liable with the Company under this Agreement as if such
successor were the Company.

 

31

 

10.3                           Payments to Beneficiary.  If
Executive dies before receiving amounts to which Executive is entitled under
this Agreement, such amounts shall be paid in a lump sum to one or more
beneficiaries designated in writing by Executive (each, a “Beneficiary”),
or if none is so designated, to Executive’s estate.

 

10.4                           Non-Alienation of Benefits. 
Benefits payable under this Agreement shall not be subject in any manner
to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution or levy of any kind, either voluntary or
involuntary, before actually being received by Executive, and any such attempt
to dispose of any right to benefits payable under this Agreement shall be void.

 

10.5                           No Deference. 
Unless otherwise expressly provided in this Agreement, no determination
pursuant to, or interpretation of, this Agreement made by the board of
directors (or any committee thereof) of Allstate or any Successor Corporation
shall be entitled to any presumptive validity or other deference in connection
with any judicial or administrative proceeding relating to or arising under
this Agreement.

 

10.6                           Severability.  If
any one or more Articles, Sections or other portions of this Agreement are
declared by any court or governmental authority to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate any Article, Section or
other portion not so declared to be unlawful or invalid.  Any Article, Section or other portion so
declared to be unlawful or invalid shall be construed so as to effectuate the
terms of such Article, Section or other portion to the fullest extent
possible while remaining lawful and valid.

 

10.7                           Amendments.  This Agreement shall not be
amended or modified except by written instrument executed by Executive,
Allstate and AIC.

 

10.8                           Notices.  All notices and other
communications under this Agreement shall be in writing and delivered by hand,
by nationally recognized delivery service that promises overnight delivery, or
by first-class registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:

 

If to Executive, to Executive at his most recent home

address on file with the Company.

 

If to Allstate or AIC:

 

The Allstate Corporation

2775 Sanders Road

Northbrook, Illinois  60062

Attention:  General Counsel

 

32

 

or to such other address as either party shall have furnished to the
other in writing.  Notice and
communications shall be effective when actually received by the addressee.

 

10.9                           Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together constitute one and the same
instrument.

 

10.10                     Governing Law.  This
Agreement shall be interpreted and construed in accordance with the laws of the
State of Illinois, without regard to its choice of law principles.

 

10.11                     Captions.  The captions of this Agreement
are not a part of the provisions hereof and shall have no force or effect.

 

10.12                     Number and Gender. 
Wherever appropriate, the singular shall include the plural, the plural
shall include the singular, and the masculine shall include the feminine.

 

10.13                     Tax Withholding.  The
Company may withhold from any amounts payable under this Agreement any Taxes
that are required to be withheld by any applicable law or regulation.

 

10.14                     No Waiver.  Executive’s failure to insist
upon strict compliance with any provision of this Agreement shall not be deemed
a waiver of such provision or any other provision of this Agreement.  A waiver of any provision of this Agreement
shall not be deemed a waiver of any other provision, and any waiver of any
default in any such provision shall not be deemed a waiver of any later default
thereof or of any other provision.

 

10.15                     Joint and Several Liability.  The
obligations of Allstate and AIC to Executive under this Agreement shall be
joint and several.

 

10.16                     No Rights Prior to Effective Date. 
Notwithstanding any provision of this Agreement to the contrary, this
Agreement shall not entitle Executive to any compensation, severance or other
benefits of any kind prior to an Effective Date.

 

10.17                     Six-month Delay.  Any payment considered to be deferred
compensation under Section 409A of the Code and not subject to an
exception or exemption thereunder, shall not be paid to Executive prior to the
first business day following the date that is six (6) months after the
date of Executive’s Termination of Employment. 
Any payments that would otherwise have been made to Executive during
such six (6) month period shall instead be aggregated and not paid to
Executive prior to the first business day following the date that is six (6) months
after the date of Executive’s Termination of Employment.  Any payments subject to a six-month delay
shall be paid with interest which shall accrue from the date such payment
became due and owing until the date of payment at an annual rate equal to 200
basis points above the base commercial lending rate published in The Wall Street Journal in effect from time to time during
the six-month delay period.  Any payments
scheduled to be made after the date that is six (6) months after the
Termination

 

33

 

Date shall be paid to Executive in accordance with the other provisions
of this Agreement or applicable plan.

 

10.18.                  Interpretation to Avoid 409A Penalties.  This
Agreement is intended to comply with the provisions of Section 409A of the
Code so as to avoid the imposition of excise taxes and penalties on the
Executive under Section 409A of the Code. 
The Agreement shall be interpreted, construed and administered
consistent with that intent.

 

10.19                     Entire Agreement.  This
Agreement contains the entire understanding of Allstate, AIC and Executive with
respect to its subject matter.

 

IN WITNESS WHEREOF, Executive, Allstate and AIC have executed this
Amended and Restated Change of Control Employment Agreement.

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  [Name of Executive]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  THE
  ALLSTATE CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  ALLSTATE
  INSURANCE COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
									

 

34EXHIBIT
10.33

 

 

	
   

  	
   

  	
  H.
  John Riley, Jr.

  Chairman of The Compensation

  and Succession Committee

  

 

February 24,
2009

 

Edward
M. Liddy

 

Dear
Ed,

 

This
letter is to document the compensation and perquisites that will be provided to
you following your retirement on April 30, 2008, that were approved by the
Board on April 15, 2008 and revised by the Board on February 24, 2009.

 

The
Corporation will provide you with the following perquisites or will reimburse
you for the reasonable expenses in obtaining the following for a period of ten
years from the date of your retirement unless noted otherwise below:

 

1)              Office, secretary, and office equipment,
including computers and phones;

2)              Tax preparation services for tax years
through 2011 on the same terms available to senior officers of Allstate
Insurance Company (“AIC”);

3)              Executive Health Management program under the
terms made available to senior officers of AIC;

4)              Use on a second priority basis of ground
transportation services using vehicles owned or leased by AIC and operated by
AIC employees for attendance at civic-related events;

5)              Access to corporate travel and meeting
planning services used by AIC for reservations;

6)              Use of AIC’s Glen Club membership for a
period of ten years from your retirement date as long as AIC maintains a
membership; you will be responsible for paying, and the Corporation will not
reimburse you for, any charges or fees related to your actual use of the Glen
Club;

7)              Your membership in the Commercial Club
through June 2009, the Economic Club of Chicago through June 2009,
the Chicago Club through October 2008, and the Metropolitan Club through December 2008;

8)              Use of the 1953 Allstate Coupe from May 1
through September 30 of each year for a period of five years from the date
of your retirement; and

9)              Other miscellaneous items for which the
Corporation has reimbursed you to date in the amount of $275.08.

 

Notwithstanding
the provisions of the immediately preceding paragraph, Allstate will neither
provide to you, nor reimburse you for expenses in obtaining, the perquisites
listed in items 4, 5, 6 and 8, above, during the period that you are employed
by, or serve on the board of directors of, American International Group, Inc.
or any other competitor of Allstate. In addition, to the extent that you use the
perquisites listed in item 1 to conduct business on behalf of AIG or any other
competitor of Allstate, you will arrange for the Corporation to be reimbursed.

 

 

With
regard to compensation, your salary, and long-term cash incentive awards for
the 2007-2009 and 2008-2010 performance cycles will be prorated based on your
retirement date of April 30, 2008.  The long-term cash incentive
award for the 2006-2008 cycle will not be prorated.  All awards will be
paid at the time all awards are paid for that particular cycle and calculated
based on actual results.

 

Finally,
the Board is aware that Tom Wilson, Allstate’s Chairman, President, and Chief
Executive Officer approved your use of an Allstate jet to fly to Teterboro, New
Jersey on September 16, 2008 to attend emergency meetings regarding the
crisis in the U.S. financial markets and American International Group, Inc.  The Board agrees that this was a proper
exercise of Tom’s authority and that his decision was an excellent one for both
Allstate and the country in light of the financial crisis.  Of course, the expense of the flight will be
imputed to you as income for tax purposes.

 

Allstate
will reimburse you for the taxes associated with the cost of your office,
secretary, and office equipment to the extent provided by or reimbursed by
Allstate and for the taxes associated with the imputed income on the flight to
Teterboro, but will not provide any other tax reimbursement.

 

The
reimbursement of any expenses described above shall be provided not later than
the end of the calendar year following the calendar year in which the expense
was incurred.  In addition, the amount of any expense eligible for
reimbursement, or in-kind benefit provided, during any calendar year shall not
affect the amount of such expense eligible for reimbursement, or in-kind
benefits to be provided, in any other calendar year.  Lastly, the right to
reimbursement or in-kind benefits is not subject to liquidation or exchange for
another benefit.

 

To
the extent applicable, it is the Board’s intention that the provision of such
perquisites and the reimbursement of such expenses are intended to comply with
the requirements of Internal Revenue Code section 409A (including any
applicable regulations and guidance thereunder).

 

If
you have any questions regarding this letter, please contact me.

 

 

Sincerely,

 

 

	
  /s/
  H. John Riley, Jr.

  	
   

  
	
  H.
  John Riley, Jr.

  	
   

  

 

2

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