Document:

Exhibit 10.6

 

Long-Term
Executive Incentive Plan – Performance Goals and Target Awards

for Current Performance Cycles

 

The registrant maintains a shareholder-approved Long-Term Executive
Incentive Compensation Plan to provide certain executives, including the
executive officers, the opportunity to receive a cash award based on the
achievement of performance objectives over a three-year cycle.  The
Compensation and Succession Committee of the Board of Directors establishes
performance goals for each cycle and sets threshold, target and maximum levels
of performance.  Awards are calculated on
an executive’s annual salary as of the beginning of the cycle.  The amount of each executive’s payout is
dependent on the achievement of the performance goals.  The Committee has the authority to adjust the
amount of awards payable under the plan, but has no authority to increase the
amount of an award otherwise payable to a “covered employee” as defined in Section 162(m)(3)
of the Internal Revenue Code.  Payments
are made in March of the year following the end of the respective cycle,
after the Committee has certified in writing the degree of attainment of the
cycle’s performance goals.

 

The current cycles under the plan cover the following three-year
periods:  2002-2004, 2003-2005, 2004-2006
and 2005-2007.

 

2002-2004 Cycle

 

The
performance goal for the 2002-2004 cycle is an adjusted return on equity
measure as compared to that of a peer group of companies in the S&P 500
property/casualty index over the same three-year period.  No payout is made for this cycle unless
adjusted return on equity exceeds the average rate on three-year treasury notes
over the cycle, plus 200 basis points. 
Award opportunities range from 0% to 250% of an executive officer’s
target award, depending on adjusted return on equity performance relative to
the peer group.  An executive officer’s
target award generally ranges from 40% to 155% of salary.

 

2003-2005 Cycle

 

The
performance goal for the 2003-2005 cycle is adjusted return on equity as
compared to a select peer group of companies representing both the
property/casualty and financial services industries.  Similar to the 2002-2004 cycle, no payout is
made unless adjusted return on equity exceeds the average rate on three-year
treasury notes over the cycle, plus 200 basis points.  Award opportunities range from 0% to 300% of
an executive officer’s target award, depending on adjusted return on equity
performance relative to the peer group. 
An executive officer’s target award generally ranges from 70% to 155% of
salary.

 

2004-2006 Cycle

 

For the 2004-2006
cycle there are three performance goals. 
Fifty percent of the award opportunity is based on the same adjusted
return on equity performance goal approved

 

1

 

for the 2003-2005
cycle.  No payment based on adjusted
return on equity is made unless that return exceeds the average rate on
three-year Treasury notes over the cycle, plus 200 basis points. 
Twenty-five percent of the award opportunity is based on Allstate Protection
(property and casualty) policy growth over the cycle and the remaining 25% is
based on Allstate Financial growth in premium and deposits over the cycle.  Awards range from 0% to 300% of an executive
officer’s target award, depending on the level of performance achieved for the
cycle.  An executive officer’s target
award generally ranges from 70% to 155% of salary.

 

2005-2007 Cycle

 

On November 9,
2004 the Committee approved performance goals and target awards for the
three-year performance cycle beginning with 2005 and concluding in 2007 that
are identical to the goals and award opportunities approved for the 2004-2006
cycle as described above.

 

2Exhibit
10.13

 

THE ALLSTATE CORPORATION

2001 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD
AGREEMENT

 

[Date]

 

[Name]

[Address]

[City]

 

In accordance with the terms of The Allstate
Corporation 2001 Equity Incentive Plan (the “Plan”), pursuant to action of the
Compensation and Succession Committee of the Board of Directors, The Allstate
Corporation hereby grants to you (the “Participant”), subject to the terms and
conditions set forth in this Restricted Stock Unit Award Agreement (including
Annex A hereto and all documents incorporated herein by reference), Restricted
Stock Units (RSUs), as set forth below. 
Each RSU corresponds to one share of Stock. An RSU is an unfunded and
unsecured promise to deliver one share of Stock on the Conversion Date or as
otherwise provided herein.  Until such
delivery, you have only the rights of a general unsecured creditor of Allstate
and not as a stockholder with respect to the shares of Stock underlying your
RSUs.

 

	
  Number of RSUs Granted:

  	
   

  	
  xxxxx

  
	
   

  	
   

  	
   

  
	
  Date of Grant:

  	
   

  	
  February 22, 2005

  
	
   

  	
   

  	
   

  
	
  Period of Restriction:

  	
   

  	
  As to the total number
  of RSUs, Date of Grant through February 22, 2009.

  
	
   

  	
   

  	
   

  
	
  Conversion Date:

  	
   

  	
  Each RSU will convert
  to one share of Stock on the date the restrictions lapse with respect to that
  RSU (the “Conversion Date”).

  
	
   

  	
   

  	
   

  
	
  Dividend

  	
   

  	
   

  
	
  Equivalent Right:

  	
   

  	
  Each RSU shall include
  a Dividend Equivalent Right.

  

 

Further terms and conditions of the Award are set
forth in Annex A hereto, which is an integral part of this RSU Award Agreement.

 

All terms, provisions and conditions applicable to the
Restricted Stock Unit Award set forth in the Plan and not set forth herein are
hereby incorporated by reference herein. 
To the extent any provision hereof is inconsistent with a provision of
the Plan, the provisions of the Plan will govern.

 

Edward M. Liddy

Chairman, President and
Chief

Executive Officer

THE ALLSTATE CORPORATION

 

 

Attachment:          Annex A

 

 

ANNEX A

 

TO

 

THE ALLSTATE CORPORATION

2001 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD
AGREEMENT

 

Further Terms and Conditions
of Option.  It is
understood and agreed that the Award of RSUs evidenced by the RSU Award
Agreement to which this is annexed is subject to the following additional terms
and conditions:

 

1.             Tax Withholding. 
With respect to the minimum statutory tax withholding required upon the
lapse of restrictions on the RSUs, the Participant may elect to satisfy such
withholding requirements by tender of previously-owned shares of Stock or by
having the Company withhold shares of Stock upon the Conversion Date.

 

2.             Termination
of Employment.  Except as otherwise
specifically provided in Section 3 below, upon the Participant’s Termination of
Employment, all unvested RSUs shall be treated as follows, subject, however, to
the Compensation and Succession Committee’s right to determine otherwise at any
time:  (a) if the Participant’s
Termination of Employment is on account of Retirement at the Normal Retirement
Date, then no unvested RSUs shall be forfeited and such unvested RSUs will
remain subject to the restriction period set forth on the first page of this
RSU Award Agreement; and (b) if the Participant’s Termination of Employment is
on account of any other reason, then all unvested RSUs shall be forfeited as of
the end of the day of such Termination of Employment.

 

3.             Change
of Control.  (a) Except as otherwise
specifically provided in The Allstate Corporation Change of Control Severance
Plan (to the extent such Plan is applicable to the Participant) or another
written agreement with the Company or to which the Participant is a party, the
RSUs, to the extent not vested, shall vest and become nonforfeitable (i) on the
Change of Control Effective Date of a Change of Control, as defined in
paragraphs (a), (b), (d) and (e) of the definition of Change of Control in Section
9, that is not a Merger of Equals, or (ii) on the Consummation Date of a Change
of Control as defined in paragraph (c) of such definition of a Change of
Control that is not a Merger of Equals or (iii) if applicable, on a later
Merger of Equals Cessation Date.

 

(b)   If a Participant has a Termination of
Employment during the Post-Merger of Equals Period, which Termination of
Employment is initiated by the Participant’s employer for a reason other than
Cause or Disability, then the RSUs to the extent not vested, shall vest and
become nonforfeitable.

 

4.             Conversion Date.  Unless otherwise determined by the Board, a
Participant shall be entitled to delivery of shares of Stock that underlie the
RSUs then outstanding upon the date the restrictions lapse with respect to such
RSU.

 

5.             Dividend Equivalent Right.  During the Period of Restriction, each RSU
entitles a Participant to receive at or as soon as practicable after the time
of distribution of any regular cash dividend paid by the Company in respect of
a share of Stock the record date for which occurs on or after the Date of

 

 

Grant, a cash amount (less applicable
withholding) equal to such regular dividend payment as would have been made in
respect of each share of Stock underlying such RSU.  Cash payment with respect to a Dividend
Equivalent Right shall be made only with respect to such RSUs that are
outstanding on the dividend record date. 
Regular dividends will be paid on the shares of Stock following
conversion of the RSUs.

 

6.             Ratification of Actions.  By accepting the RSU Award or other benefit
under the Plan, the Participant and each person claiming under or through him
shall be conclusively deemed to have indicated the Participant’s acceptance and
ratification of, and consent to, any action taken under the Plan or the RSU
Award by the Company, the Board or the Compensation and Succession Committee.

 

7.             Notices.  Any notice hereunder to the Company shall be
addressed to its Stock Option Record Office and any notice hereunder to the
Participant shall be addressed to him or her at the address specified on this
RSU Award Agreement, subject to the right of either party to designate at any
time hereafter in writing some other address.

 

8.             Governing
Law and Severability.  To the extent
not preempted by Federal law, the RSU Award Agreement will be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to conflicts of law provisions.  In the
event any provision of this RSU Award Agreement shall be held illegal or
invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of this RSU Award Agreement, and this RSU Award Agreement shall
be construed and enforced as if the illegal or invalid provision had not been
included.

 

9.             Definitions.  In addition to the following definitions,
capitalized terms not otherwise defined herein shall have the meanings given
them in the Plan.

 

“Allstate Incumbent Directors” means,
determined as of any date by reference to any baseline date:

 

(a)  the members of the Board on the date of such
determination who have been members of the Board since such baseline date, and

 

(b)  the members of the Board on the date of such
determination who were appointed or elected after such baseline date and whose
election, or nomination for election by stockholders of the Company or the
Surviving Corporation, as applicable, was approved by a vote or written consent
of two-thirds (100% for purposes of paragraph (a) of the definition of “Merger
of Equals”) of the directors comprising the Allstate Incumbent Directors on the
date of such vote or written consent, but excluding each such member whose
initial assumption of office was in connection with (1) an actual or threatened
election contest, including a consent solicitation, relating to the election or
removal of one or more members of the Board, (2) a “tender offer” (as such
terms is used in Section 14(d) of the Exchange Act), (3) a proposed
Reorganization Transaction, or (4) a request, nomination or suggestion of any
Beneficial Owner of Voting Securities representing 15% or more of the aggregate
voting power of the Voting Securities of the Company or the Surviving
Corporation, as applicable.

 

“Approved Passive Holder” means, as of any
date, any Person that satisfies all of the following conditions:

 

(a)  as of such date, such Person is a 20% Owner,
but is the Beneficial Owner of less than 30% of the then-outstanding Common
Stock and of Voting Securities representing less than 30% of the combined
voting power of all then-outstanding Voting Securities of

 

 

the Company;

 

(b)  prior to becoming a 20% Owner, such Person
has filed, and as of such date has not withdrawn, or made any subsequent filing
or public statement inconsistent with, a statement with the Securities Exchange
Commission (“SEC”) pursuant to Section 13(g) of the Exchange Act that includes
a certification by such person to the effect that such beneficial ownership
does not have the purpose or effect of changing or influencing the control of
the Company;

 

(c)  prior to such Person’s becoming a 20% Owner,
at least two-thirds of the Allstate Incumbent Directors (such Allstate
Incumbent Directors to be determined as of the Date of Grant as the baseline
date) shall have voted in favor of a resolution adopted by the Board to the effect
that:  (1)  the terms and conditions of such Person’s
investment in the Company will not have the effect of changing or influencing
the control of the Company, and (2) 
notwithstanding clause (a) of the definition of “Change of Control,”
such Person’s becoming a 20% Owner shall be treated as though it were a Merger
of Equals for purposes of the Plan.

 

“Beneficial Owner” means such term as defined
in Rule 13d-3 of the SEC under the Exchange Act.

 

“Cause” means any of the events or conditions
which constitute cause for immediate termination of employment of the
Participant as provided from time to time in the applicable Human Resources
Policy of the Company or one of its Subsidiaries.

 

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

 

(a)  any person (as such term is used in Rule
13d-5 of the SEC under the Securities Exchange Act of 1934, as amended
(“Exchange Act”)) or group (as such term is defined in Sections 3(a)(9) and
13(d)(3) of the Exchange Act), other than a Controlled Affiliate of the Company
or any employee benefit plan (or any related trust) of the Company or any of
its Controlled Affiliates, becomes the Beneficial Owner of 20% or more of the
common stock of the Company or of Voting Securities representing 20% or more of
the combined voting power of all Voting Securities of the Company (such a
person or group that is not a Similarly Owned Company (as defined below), a “20%
Owner”), except that no Change of Control shall be deemed to have
occurred solely by reason of such beneficial ownership by a corporation (a
“Similarly Owned Company”) 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 the Company
immediately before such acquisition, in substantially the same proportions as
their ownership, immediately before such acquisition, of the common stock and
Voting Securities of the Company, as the case may be; or

 

(b)   Allstate Incumbent Directors (as determined
using the Date of Grant as the baseline date) cease for any reason to
constitute at least two-thirds, of the directors of the Company then serving
(provided, however, that this clause (b) shall be inapplicable during a
Post-Merger of Equals Period); or

 

(c)   approval by the stockholders of the Company
of a merger, reorganization,

 

 

consolidation, or similar transaction, or a plan or
agreement for the sale or other disposition of all or substantially all of the
consolidated assets of the Company or a plan of liquidation of the Company (any
of the foregoing, a “Reorganization Transaction”) that, based on
information included in the proxy and other written materials distributed to
the Company’s stockholders in connection with the solicitation by the Company
of such stockholder approval, is not expected to qualify as an Exempt
Reorganization Transaction; provided, however, that if (1) the merger or other
agreement between the parties to a Reorganization Transaction expires or is
terminated after the date of  such
stockholder approval but prior to the consummation of such Reorganization
Transaction (a “Reorganization Transaction Termination”) or (2)
immediately after the consummation of the Reorganization Transaction, such
Reorganization Transaction does qualify as an Exempt Reorganization Transaction
notwithstanding the fact that it was not expected to so qualify as of the date
of such stockholder approval, then such stockholder approval shall not be
deemed a Change of Control for purposes of any Termination of Employment as to
which the Termination Date occurs on or after the date of the Reorganization
Transaction Termination or the date of the consummation of the Exempt
Reorganization Transaction, as applicable; or

 

(d)  the consummation by the Company of a
Reorganization Transaction that for any reason fails to qualify as an Exempt
Reorganization Transaction as of the date of such consummation, notwithstanding
the fact that such Reorganization Transaction was expected to so qualify as of
the date of such stockholder approval; or

 

(e)  a 20% Owner who had qualified as an Approved
Passive Holder ceases to qualify as such for any reason other than ceasing to
be a 20% Owner (such cessation of Approved Passive Holder status to be
considered for all purposes of the Plan (including the definition of “Change of
Control Effective Date”) a Change of Control distinct from and in addition to
the Change of Control specified in clause (a) above).

 

Notwithstanding the occurrence of any of the foregoing
events, a Change of Control shall not occur with respect to a Participant if,
in advance of such event, such Participant agrees in writing that such event
shall not constitute a Change of Control.

 

“Change of Control Effective Date” means the
date on which a Change of Control first occurs while an Award is outstanding.

 

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

 

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

 

“Exempt Reorganization
Transaction” means a Reorganization Transaction that results
in the Persons who were the direct or indirect owners of the outstanding common
stock and Voting Securities of the Company immediately before such
Reorganization Transaction becoming, immediately after the consummation of such
Reorganization Transaction, the direct or indirect owners, of both more than
70% of the then-outstanding common stock of the Surviving Corporation and
Voting Securities representing more than 70% of the combined voting power of
the then-outstanding Voting Securities of the Surviving Corporation, in substantially
the same respective proportions as such Persons’ ownership of the common stock
and Voting Securities of the Company immediately before such Reorganization
Transaction.

 

 

“Merger of Equals” means, as of any date, a
transaction that, notwithstanding the fact that such transaction may also
qualify as a Change of Control, satisfies all of the conditions set forth in
paragraphs (a) or (b) below:

 

(a)  if such date is on or after the Consummation
Date, a Reorganization Transaction in respect of which all of the following
conditions are satisfied as of such date, or if such date is prior to the
Consummation Date, a proposed Reorganization Transaction in respect of which
the merger agreement or other documents (including the exhibits and annexes
thereto) setting forth the terms and conditions of such Reorganization
Transaction, as in effect on such date after giving effect to all amendments
thereof or waivers thereunder, require that the following conditions be
satisfied on and, where applicable, after the Consummation Date:

 

(1)           at least 50%, but not more than 70%,
of the common stock of the surviving Corporation outstanding immediately after
the consummation of the Reorganization Transaction, together with Voting
Securities representing at least 50%, but not more than 70%, of the combined
voting power of all Voting Securities of the Surviving Corporation outstanding
immediately after such consummation shall be owned, directly or indirectly, by
the persons who were the owners directly or indirectly of the common stock and
Voting Securities of the Company immediately before such consummation in
substantially the same proportions as their respective direct or indirect
ownership, immediately before such consummation, of the common stock and Voting
Securities of the Company, respective; and

 

(2)           Allstate Incumbent Directors
(determined as of such date using the date immediately preceding the Change of
Control Effective Date as the baseline date) shall, throughout the period
beginning on the Change of Control Effective Date and ending on the third
anniversary of the Change of Control Effective Date, continue to constitute not
less than 50% of the members of the Board; and

 

(3)           the person who was the CEO of the
Company immediately prior to the Change of Control Effective Date shall serve
as (x) the CEO of the Company throughout the period beginning on the Change of
Control Effective Date and ending on the Consummation Date and (y) the CEO of
the Surviving Corporation at all times during the period commencing on the Consummation
Date and ending on the first anniversary of the Consummation Date;

 

provided, however, that a Reorganization Transaction that qualifies as
a Merger of Equals shall cease to qualify as a Merger of Equals (a “Merger of
Equals Cessation”) and shall instead qualify as a Change of Control that is not
a Merger of Equals from and after the first date during the Post-Change period
(such date, the “Merger of Equals Cessation Date”) as of which any one or more
of the following shall occur for any reason:

 

(i)  if any condition of clause (1) of paragraph
(a) of this definition shall for any reason not be satisfied immediately after
the consummation of the Reorganization Transaction; or

 

(ii)  if as of the close of business on any date on
or after the Change of Control Effective Date, any condition of clauses (2) or
(3) of paragraph (a) of this definition shall not be satisfied; or

 

 

(iii)  if on any date prior to the first anniversary
of the Consummation Date, the Company shall make a filing with the SEC, issue a
press release, or make a public announcement to the effect that the Company is
seeking or intends to seek a replacement for the then-CEO of the Company,
whether such replacement is to become effective before or after such first
anniversary.

 

(b)  as of such date, each Person who is a 20%
Owner qualifies as an Approved Passive Holder.

 

The Committee shall give all Participants written notice of any Merger
of Equals Cessation and the applicable Merger of Equals Cessation Date as soon
as practicable after the Merger of Equals Cessation Date.

 

“Merger of Equals
Cessation Date” - see the definition of “Merger of Equals”.

 

“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.

 

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

 

“Post-Merger of Equals Period” means the period
commencing on a Change of Control Effective Date of a Change of Control that
qualifies as a Merger of Equals and ending on the third anniversary of such
Change of Control Effective Date or, if sooner, the Merger of Equals Cessation
Date.

 

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

 

“Reorganization Transaction Termination”  — see clause (c) of the definition of “Change
of Control.”

 

“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.

 

“20% Owner” — see
clause (a) of the definition of “Change of Control.”

 

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

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