Document:

EXHIBIT 10.5

 

THE ALLSTATE CORPORATION

 

EQUITY INCENTIVE PLAN FOR
NON-EMPLOYEE DIRECTORS

 

As Amended and Restated effective
as of September 15, 2008

 

I.                                       Purpose.

 

The
purpose of The Allstate Corporation Equity Incentive Plan for Non-Employee
Directors (the “Plan”) is to promote the interests of The Allstate
Corporation (the “Company”) by providing an inducement to obtain and
retain the services of qualified persons as members of the Company’s Board of
Directors (the “Board”) and to align more closely the interests of such
persons with the interests of the Company’s stockholders by providing a
significant portion of the compensation provided to such persons in the form of
equity securities of the Company.

 

II.                                   Administration.

 

The
Plan shall be administered by the Committee. 
The Committee shall have full power to construe and interpret the Plan
and Shares, RSUs and Options granted hereunder, to establish and amend rules for
its administration and to correct any defect or omission and to reconcile any
inconsistency in the Plan or in any Share, RSU or Option granted hereunder to
the extent the Committee deems desirable to carry the Plan or any Share, RSU or
Option granted hereunder into effect. 
Any decisions of the Committee in the administration of the Plan shall
be final and conclusive.  The Committee
may authorize any one or more of its members, the secretary of the Committee or
any officer of the Company to execute and deliver documents on behalf of the
Committee.  Each member of the Committee,
and, to the extent provided by the Committee, any other person to whom duties
or powers shall be delegated in connection with the Plan, shall incur no
liability with respect to any action taken or omitted to be taken in connection
with the Plan and shall be fully protected in relying in good faith upon the
advice of counsel, to the fullest extent permitted under applicable law.

 

III.                              Eligibility.

 

Each Non-Employee Director shall be eligible to
participate in the Plan.

 

IV.                               Limitation
on Aggregate Shares.

 

A.                                   Maximum
Number of Shares.  The aggregate
maximum number of Shares that may be granted pursuant to the Plan or delivered
upon settlement of RSUs or upon exercise of Options granted pursuant to the
Plan shall be 580,000 Shares.  Such
maximum number of Shares is subject to adjustment under the provisions of Section IV.B.  The Shares to be granted pursuant to the Plan
or delivered upon settlement of RSUs or upon exercise of Options may be either (i) authorized
but unissued Shares or (ii) Shares previously issued which have been
reacquired by 

 

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the Company (“Treasury
Shares”); provided, however, that on or after June 1, 2001, only Treasury
Shares shall be granted pursuant to the Plan or delivered upon settlement of
RSUs or exercise of Options (other than upon exercise of Options granted prior
to such date).  In the event any RSU,
Option or Reload Option shall, for any reason, terminate or expire or be
surrendered without having been exercised in full or without all Shares subject
thereto having been delivered, the Shares subject to such RSU, Option or Reload
Option but not delivered or purchased thereunder shall be available for future
RSUs, Options or Reload Options to be granted under the Plan.

 

B.                                     Adjustment.  The maximum number of Shares referred to in Section IV.A
of the Plan, the number of RSUs granted pursuant to Section VI of the
Plan, the number of Shares subject to outstanding RSUs granted under Section VI
of the Plan, the number of Options granted pursuant to Section VII of the
Plan, and the option price and the number of Shares which may be purchased
under any outstanding Option granted under Section VII of the Plan shall
be proportionately adjusted for (i) any increase or decrease in the number
of issued and outstanding Shares as the result of (a) the declaration and
payment of a dividend payable in Common Stock, or the division of the Common
Stock outstanding at the date hereof (or the date of the grant of any such
outstanding Option or RSU, as applicable) into a greater number of Shares
without the receipt of consideration therefore by the Company, or any other
increase in the number of such Shares of the Company outstanding at the date
hereof (or the date of the grant of any such outstanding Option or RSU, as applicable)
which is effective without the receipt of consideration therefore by the
Company (exclusive of any Shares granted by the Company to employees of the
Company or any of its Subsidiaries without receipt of separate consideration by
the Company), or (b) the consolidation of the Shares outstanding at the
date hereof (or the date of the grant of any such outstanding Option or RSU, as
applicable) into a smaller number of Shares without the payment of
consideration thereof by the Company, or any other decrease in the number of
such Shares outstanding at the date hereof (or the date of the grant of any
such outstanding Option or RSU, as applicable) effected without the payment of
consideration by the Company or (ii) to the extent not addressed in (i),
any equity restructuring (within the meaning of Financial Accounting Standards No. 123
(revised 2004)) that causes the per share value of the Common Stock to change; provided,
however, that the total option price for all Shares which may be
purchased upon the exercise of any Option granted pursuant to the Plan
(computed by multiplying the number of Shares originally purchasable
thereunder, reduced by the number of such Shares which have theretofore been
purchased thereunder, by the original option price per share before any of the
adjustments herein provided for) shall not be changed.

 

In the
event of a change in the Common Stock as presently constituted which is limited
to a change of the Company’s authorized shares with a par value into the same
number of shares with a different par value or without par value, the shares
resulting from any such change will be deemed to be the Common Stock within the
meaning of this Plan and no adjustment will be required pursuant to this Section IV.B.

 

The
foregoing adjustments shall be made by the Committee, whose determination in
that respect shall be final, binding and conclusive.  Except as expressly provided in this Section IV.B,

 

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a Non-Employee Director
shall have no rights by reason of any subdivision or consolidation of shares of
stock of any class or the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class.

 

V.                                  Definitions.

 

The
following terms shall have the meanings set forth below when used herein:

 

“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 the Company
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 or Persons,
ownership of stock of the Company possessing 30% 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 “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 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 (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 the Company
or any of its Subsidiaries, acquires ownership of more than 50% of the voting
power of all Voting Securities of the Company or of the total fair market value
of the stock of the Company (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

 

(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 the Company, or a plan of liquidation of the Company
(any of the foregoing, a “Reorganization Transaction”) that, does not
qualify as an Exempt Reorganization Transaction.

 

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Notwithstanding
anything contained herein to the contrary: 
(i)  no transaction or event shall constitute a Change of Control
for purposes of this Plan 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 Plan if the investments in and advances by the Company 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 the Company as of
immediately prior to the sale or disposition. 
Consolidated Total Shareholders’ Equity means, at any date, the total
shareholders’ equity of the Company and its Subsidiaries at such date, as
reported in the consolidated financial statements prepared in accordance with
GAAP.

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

“Committee”
means the Nominating and Governance Committee of the Board, any successor
committee of the Board performing similar functions or, in the absence of such
a committee, the Board.

 

“Common
Stock” means the Common Stock, par value $.01 per share, of the Company.

 

“Disability”
means a condition which renders a Non-Employee Director disabled within the
meaning of Code Section 409A(a)(2)(C).

 

“Dividend
Equivalent Right” means an unfunded and unsecured promise to pay a cash
amount equal to the regular cash dividends that would be paid on a Share of
Common Stock underlying a Restricted Stock Unit if such Share had been
delivered pursuant to the Restricted Stock Unit award.

 

“Election
Shares” means any Shares issued to a Non-Employee Director pursuant to the
election of such person to receive such Shares in lieu of cash compensation
made in accordance with Section VIII.B.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

“Exempt
Reorganization Transaction” means a Reorganization Transaction (as that
term is defined in subpart (d) of the definition of Change of Control)
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)) 

 

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becoming a More than 30%
Owner (as that term is defined in subpart (a) of the definition of Change
of Control) or a Majority Owner (as that term is defined in subpart (b) of
the definition of Change of Control), (b) Board Turnover (as that term is
defined in subpart (c) of the definition of Change of Control), 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 the Company that
have a total Gross Fair Market Value equal to at least forty percent (40%) of
the total Gross Fair Market Value of all of the assets of the Company
immediately before such transaction.

 

“Fair
Market Value” means the price at which a share of the Stock was last sold
in the principal United States market for the Stock as of the date for which
fair market value is being determined.

 

“Gross Fair Market
Value” means the value of the assets of the Company, or the value of
the assets being disposed of, determined without regard to any liabilities
associated with such assets.

 

“Initial
Election Date” means, for each Non-Employee Director, the later to occur of
(i) the date the Plan is approved and adopted by the Company’s
stockholders pursuant to Section XIII of the Plan, and (ii) the date
of such member’s initial election or appointment to the Board.

 

“Non-Employee
Director” means each member of the Board who is not an officer or employee
of the Company or any of its Subsidiaries.

 

“Option”
means an option to purchase shares of Common Stock.

 

“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.

 

“Restricted
Stock Unit” or “RSU” means a restricted stock unit award, which represents
an unfunded and unsecured promise to deliver a Share of Common Stock in
accordance with Article VI.

 

“Shares”
means shares of Common Stock.

 

“Subsidiary”
means any partnership, corporation, association, limited liability company,
joint stock company, trust, joint venture, unincorporated organization or other
business entity of which (i) if a corporation, a majority of the total
voting power of shares of stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by the
Company or one or more of the other Subsidiaries of the Company or a
combination thereof, or (ii) if a partnership, association, limited
liability company, joint stock company, trust, joint venture, unincorporated
organization or other business entity, a majority of the partnership or other
similar equity ownership interest thereof is at the time owned or controlled,
directly or indirectly, 

 

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by the Company or one or
more Subsidiaries of the Company or a combination thereof.  For purposes hereof, the Company or a
Subsidiary shall be deemed to have a majority ownership interest in a
partnership, association, limited liability company, joint stock company,
trust, joint venture, unincorporated organization or other business entity if
the Company or such Subsidiary shall be allocated a majority of partnership,
association, limited liability company, joint stock company, trust, joint
venture, unincorporated organization or other business entity gains or losses
or shall be or control the managing director, the trustee, the manager or the
general partner of such partnership, association, limited liability company,
joint stock company, trust, joint venture, unincorporated organization or other
business entity.

 

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

 

VI.                                Formula Restricted Stock Unit Grants for Non-Employee Directors.

 

A.                                 Annual
Grant of Restricted Stock Units. 
Beginning December 1, 2004, on December 1 of each year 2,000
RSUs shall automatically be granted to each Non-Employee Director serving on
the Board on such date who has served in such capacity since June 1 of
such year.  If any person serving as a
Non-Employee Director on June 1 of 2004 or any subsequent year ceases to
serve as a director of the Company prior to December 1 of such year, such
director shall be automatically granted on his or her last day of service a
number of RSUs equal to (i) 2,000 multiplied by (ii) a
fraction, the numerator of which is the number of full calendar months such
Non-Employee Director has served on the Board during the period beginning on
such June 1 and ending on such director’s last date of service and the
denominator of which is 6.

 

B.                                   Grant
for Newly Appointed Directors.  If
after June 1, 2004 a Non-Employee Director is initially elected or
appointed to the Board effective on any date other than June 1, such
Non-Employee Director shall automatically be granted, on the June 1
following the date he or she joins the Board (or such earlier date as he or she
ceases to serve as a director), a number of RSUs equal to (i) 2,000 multiplied
by (ii) a fraction, the numerator of which is the number of full
calendar months such Non-Employee Director has served on the Board during the
period beginning on the date such director joined the Board and ending on the
following May 31 (or such earlier date as he or she ceases to serve as a director)
and the denominator of which is 6; provided that such fraction shall in no
event be greater than one.

 

C.                                   Delivery
of Shares.  Unless otherwise
determined by the Board, the Non-Employee Director shall be entitled to
delivery of Shares that underlie the RSUs then outstanding (which amount shall
be rounded to the nearest whole number to avoid delivery of fractional Shares)
upon the earlier of (i) the date of the Non-Employee Director’s death or
Disability, and (ii) one year after the date on which the Non-Employee
Director is no longer serving as a director of the Company.  Delivery of Shares shall be effected by book
entry credit to the Non-Employee Director’s account with the Company’s transfer
agent.

 

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D.                                  Restrictions.  A Non-Employee Director shall have only the
rights of a general unsecured creditor of the Company and shall have no rights
as a shareholder of the Company with respect to the RSUs.  Upon delivery of Shares pursuant to Section VI.C
the Non-Employee Director will obtain full voting and other rights as a
shareholder of the Company.  The RSUs
granted pursuant to this Section VI shall be fully vested but may not be
sold, transferred, pledged, assigned, or otherwise alienated at any time.

 

E.                                    Dividend
Equivalent Rights.  Each RSU shall
include a Dividend Equivalent Right that shall entitle the Non-Employee
Director to receive a cash amount equal to the regular dividend payment as
would have been made in respect of each share of Stock underlying such RSU in
accordance with the following schedule:

 

	
  Regular Dividend Payment (“RDP”), if any

  	
   

  	
  Dividend Equivalent Payment Date

  
	
   

  	
   

  	
   

  
	
  1st Quarter

  	
   

  	
  January 1 through March 31 of the year RDP
  paid

  
	
  2nd Quarter

  	
   

  	
  April 1 through June 30 of the year RDP
  paid

  
	
  3rd Quarter

  	
   

  	
  July 1 through September 30 of the year
  RDP paid

  
	
  4th Quarter

  	
   

  	
  October 1 through December 31 of the year
  RDP paid

  

 

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.

 

F.  Change of Control.  In the event of a Change of Control, all
outstanding RSUs shall immediately be payable in Shares upon consummation of
the Change of Control.

 

VII.                          Formula
Stock Option Grants for Non-Employee Directors.

 

A.                                   Annual
Grant of Options.  On June 1 of
each year, beginning June 1, 2001, Options to purchase 4,000 Shares shall
automatically be granted to each Non-Employee Director serving on the Board on
such date.  If any such Non-Employee
Director will be required to retire (pursuant to the policies of the Board)
during the 12 month period beginning on the date of any grant (or if any such
Non-Employee Director has notified the Board that he or she intends to resign
from the Board for any reason during the 12 month period beginning on the date
of any grant), such director shall instead be granted on June 1 of the
relevant year Options to purchase a number of Shares equal to (i) 4,000, multiplied
by (ii) a fraction, the numerator of which is the number of full calendar
months such Non-Employee Director will serve on the Board during the period
beginning on such June 1 and ending on such director’s last date of
service and the denominator of which is 12.

 

B.                                     Grant
for Newly Appointed Directors.  If
after June 1, 2001 a Non-Employee Director is initially elected or
appointed to the Board effective on any date other than June 1, such
Non-Employee Director shall automatically be granted, on the date he or she
joins the Board, Options to purchase a number of Shares equal to (i) 4,000,
multiplied by (ii) a fraction, the numerator of which is the number
of full calendar months such Non-Employee Director will serve on the Board
during the period beginning on the date such director joins the Board and 

 

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ending on the following May 31
and the denominator of which is 12.

 

C.                                     Option
Exercise Price.  The exercise price
per Share for each Option shall be 100% of the Fair Market Value of a Share on
the date of grant, subject to Section IV.B.

 

D.                                    Term
of Options.  Each Option shall be
exercisable for ten years after the date of grant, subject to Section VII.F.

 

E.                                      Conditions
and Limitations on Exercise.

 

(i)                           Vesting.  Each Option shall vest in three installments
as follows:  (i) on each of the
first and second anniversaries of the date of grant, as to one-third of the
Shares subject to such Option (with any resulting fractional Share rounded to
the nearest whole Share) and (ii) on the third anniversary of the date of
grant, as to the remaining unvested portion of such Option.  Upon a Non-Employee Director’s mandatory
retirement pursuant to the policies of the Board, the unvested portions of any
outstanding Options held by such Non-Employee Director shall fully vest.  Upon the termination of a Non-Employee
Director’s tenure for any other reason, the unvested portions of any
outstanding Options shall expire and no Options granted to such Non-Employee
Director shall vest after the termination of such director’s tenure on the
Board.

 

(ii)                        Exercise.  Each Option shall be exercisable in one or
more installments and shall not be exercisable for less than 100 Shares, unless
the exercise represents the entire remaining exercisable balance of a grant or
grants.  Each Option shall be exercised
by delivery to the Company of written notice of intent to purchase a specific
number of Shares subject to the Option. 
The option price of any Shares as to which an Option shall be exercised
shall be paid in full at the time of the exercise.  Payment may, at the election of the
Non-Employee Director, be made in any one or any combination of the following
forms:

 

(a)                                  check
or wire transfer of funds in such form as may be satisfactory to the Committee;

 

(b)                                 delivery
of Shares valued at their Fair Market Value on the date of exercise or, if the
date of exercise is not a business day, the next preceding business day;

 

(c)                                  through
simultaneous sale through a broker of unrestricted Shares acquired on exercise,
as permitted under Regulation T of the Federal Reserve Board; or

 

(d)                                 by
authorizing the Company in his or her written notice of exercise to withhold
from issuance a number of Shares issuable upon exercise of such Option which,
when multiplied by the Fair Market Value of Common Stock on 

 

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the date of
exercise (or, if the date of exercise is not a business day, the next preceding
business day), is equal to the aggregate exercise price payable with respect to
the Option so exercised.

 

In the event a
Non-Employee Director elects to pay the exercise price payable with respect to
an Option pursuant to clause (b) above, (i) only a whole number of
Share(s) (and not fractional Shares) may be tendered in payment, (ii) such
Non-Employee Director must present evidence acceptable to the Company that he
or she has owned any such Shares tendered in payment of the exercise price (and
that such Shares tendered have not been subject to any substantial risk of
forfeiture) for at least six months prior to the date of exercise, and (iii) the
certificate(s) for all such Shares tendered in payment of the exercise
price must be accompanied by duly executed instruments of transfer in a form
acceptable to the Company.  When payment
of the Option exercise price is made by the tender of Shares, the difference,
if any, between the aggregate exercise price payable with respect to the Option
being exercised and the Fair Market Value of the Share(s) tendered in
payment (plus any applicable taxes) shall be paid by check or wire transfer of
funds.  No Non-Employee Director may
tender Shares having a Fair Market Value exceeding the aggregate exercise price
payable with respect to the Option being exercised.

 

In the event a
Non-Employee Director elects to pay the exercise price payable with respect to
an Option pursuant to clause (d) above, (i) only a whole number of
Share(s) (and not fractional Shares) may be withheld in payment and (ii) such
Non-Employee Director must present evidence acceptable to the Company that he
or she has owned a number of Shares at least equal to the number of Shares to
be withheld in payment of the exercise price (and that such owned Shares have
not been subject to any substantial risk of forfeiture) for at least six months
prior to the date of exercise.  When
payment of the Option exercise price is made by the withholding of Shares, the
difference, if any, between the aggregate exercise price payable with respect
to the Option being exercised and the Fair Market Value of the Share(s) withheld
in payment (plus any applicable taxes) shall be paid by check or wire transfer
of funds.  No Non-Employee Director may
authorize the withholding of Shares having a Fair Market Value exceeding the
aggregate exercise price payable with respect to the Option being
exercised.  Any withheld Shares shall no
longer be issuable under such Option.

 

F.                                      Additional
Provisions.

 

                                                                  (i)                   Accelerated
Expiration of Options Upon Termination of Directorship.  Upon the termination of a Non-Employee
Director’s tenure for any reason, each outstanding vested and previously
unexercised Option shall expire three months after the date of such
termination; provided that (a) upon the termination of a
Non-Employee Director’s tenure as a result of death or Disability, each
outstanding vested and previously unexercised Option shall expire two years
after the date of his or her termination as a director, and (b) upon the
mandatory retirement of a Non-Employee Director pursuant to the policies of the
Board, each outstanding vested and previously unexercised Option shall expire
five years after the date of his or her termination as a director.  In no event shall the provisions of this Section VII.F
operate to extend the original expiration date of 

 

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any Option.

 

(ii)                        Change
of Control.  In the event of a Change
of Control, the Options may be assumed by the successor corporation or a parent
of such successor corporation or substantially equivalent options may be
substituted by the successor corporation or a parent of such successor corporation,
and if the successor corporation does not assume the Options or substitute
options, then all outstanding and unvested Options shall become immediately
exercisable and all outstanding Options shall terminate if not exercised as of
the date of the Change of Control.  The
Company shall provide at least 30 days prior written notice of the Change of
Control to the holders of all outstanding Options, which notice shall state
whether (a) the Options will be assumed by the successor corporation or substantially
equivalent options will be substituted by the successor corporation, or (b) the
Options are thereafter vested and exercisable and will terminate if not
exercised as of the date of the Change of Control.

 

  (iii)                   Liquidation or Dissolution.  In the event of the liquidation or
dissolution of the Company, Options shall terminate immediately prior to the
liquidation or dissolution.

 

G.                                     Grant
of Reload Options.  A Non-Employee
Director who exercises all or any portion of an Option granted under the Plan before
June 1, 2004 by the tender or withholding of Shares which have a Fair
Market Value equal to not less than 100% of the exercise price for such Options
(the “Exercised Options”) shall be granted, subject to Section IV,
an additional option (a “Reload Option”) for a number of Shares equal to
the sum of the number of Shares tendered or withheld in payment of the exercise
price for the Exercised Options.  Options
granted on and after June 1, 2004 shall not provide for the grant of a
Reload Option upon exercise.

 

Reload Options
shall be subject to the following terms and conditions:

 

  (i)                     the grant date for each Reload
Option shall be the date of exercise of the Exercised Option to which it
relates;

 

 (ii)                     subject to clause (iii) below,
the Reload Option may be exercised at any time during the unexpired term of the
Exercised Option (subject to earlier termination thereof as provided in the
Plan); and

 

(iii)                     the other terms of the Reload
Option shall be the same as the terms of the Exercised Option to which it
relates and shall be subject to the provisions of the Plan, except that (a) the
option price shall be the Fair Market Value of the Shares on the grant date of
the Reload Option, (b) no Reload Option may be exercised within six months
from the grant date thereof, and (c) no other Reload Option shall be
granted upon exercise of such Reload Option.

 

H.                                    Non-Qualified
Stock Options.  All Options granted
under the Plan shall be non-qualified options not entitled to special tax
treatment under Code Section 422, as may be 

 

10

 

amended from time
to time.

 

VIII.                    Election to
Receive Stock in Lieu of Cash Compensation

 

A.                                   General.  A Non-Employee Director may elect to reduce
the cash compensation otherwise payable for services to be rendered by him or
her as a director for any period beginning on June 1 and continuing to the
following May 31 (or such other period for which cash compensation is
payable to Non-Employee Directors pursuant to the policies of the Board), beginning
June 1, 1996 and to receive in lieu thereof Election Shares as provided in
this Section VIII.

 

B.                                     Election.  By the later of (i) the date of the
Company’s annual meeting of stockholders next preceding the June 1 to
which such election relates (but in no event less than five business days prior
to such June 1) and (ii) such Non-Employee Director’s Initial
Election Date, each Non-Employee Director may make an irrevocable election to
receive, in lieu of all or a specified percentage (which percentage shall be in
10% increments) of the cash compensation to which such director would otherwise
be entitled as a member of the Board and any committee thereof (including the
annual retainer fee and any meeting or other fees payable for services on the
Board or any committee thereof, but excluding any reimbursement for
out-of-pocket expenses) for the year beginning the following June 1 (or
such other period for which cash compensation is payable to such Non-Employee
Director pursuant to the policies of the Board), an equivalent value in
Election Shares granted in accordance with this Section VIII.  An election shall be effective (i) if
made in accordance with clause (i) of the preceding sentence, beginning on
the June 1 following such election; and (ii) if made on such
Non-Employee Director’s Initial Election Date, immediately.

 

Each such election
shall (i) be in writing in a form prescribed by the Company, (ii) specify
the amount of cash compensation to be received in the form of Election Shares
(expressed as a percentage of the compensation otherwise payable in cash), and (iii) be
delivered to the Secretary of the Company. 
Such election may not be revoked or changed thereafter except as to
compensation for services to be rendered in any 12 month period beginning on
any June 1 at least six months following such revocation or new election.

 

C.                                     Issuance
of Common Stock.  If a Non-Employee
Director elects pursuant to Section VIII.B above to receive Election
Shares, there shall be issued to such director promptly following each
subsequent June 1 for which such election is effective (or promptly
following the first day of such other period for which such election is
effective) a number of Election Shares equal to the amount of compensation
otherwise payable for the 12 month period beginning on such June 1 (or the
other period for which such election is effective) divided by the Fair Market
Value of the Election Shares on such June 1 (or on the first day of such
other period).  To the extent that the
application of the foregoing formula would result in fractional shares of
Common Stock being issuable, cash will be paid to the Non-Employee Director in
lieu of such fractional Election Shares based upon the Fair Market Value of
such fractional Election Share.

 

11

 

D.                                    Compliance
with Exchange Act.  The election to
receive Election Shares is intended to comply in all respects with Rule 16b-3(d)(1) promulgated
under Section 16(b) of the Exchange Act such that the issuance of
Election Shares under the Plan on a grant date occurring at least six months
after the election shall be exempt from Section 16(b) of the Exchange
Act.

 

E.                                      Grant
Date.  The grant date for each
Election Share for the Non-Employee Director electing such option shall be the
first day of the period to which such election relates and is effective.

 

IX.                              Miscellaneous
Provisions.

 

A.                                   Rights
of Non-Employee Directors.  No
Non-Employee Director shall be entitled under the Plan to voting rights,
dividends or other rights of a stockholder prior to the issuance of Common
Stock.  Neither the Plan nor any action
taken hereunder shall be construed as giving any Non-Employee Director any
right to be retained in the service of the Company.

 

B.                                     Limitations
on Transfer and Exercise. All Options granted under the Plan shall not be
transferable by the Non-Employee Director, other than by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order,
as defined by Section 1 et  seq, of the Code, Title I of ERISA
or the rules and regulations thereunder, and shall be exercisable during
the Non-Employee Director’s lifetime only by such Non-Employee Director or by
such Non-Employee Director’s guardian or other legal representative; provided,
however, that the vested portions of Options may be transferred by the
Non-Employee Director during his lifetime to (a) any member of his
immediate family, (b) to a trust established for the exclusive benefit of
himself or one or more members of his immediate family, or (c) to a
partnership, the partners of which are limited to the Non-Employee Director and
members of his immediate family.  A
transfer of an Option pursuant to this paragraph may only be effected by the
Company at the written request of a Non-Employee Director and shall become
effective only when recorded in the Company’s record of outstanding
Options.  In the event an Option is
transferred as contemplated in this paragraph, any Reload Options associated
with such transferred Option shall terminate, and such transferred Option may
not be subsequently transferred by the transferee except by will or the laws of
descent and distribution.  Otherwise, a
transferred Option shall continue to be governed by and subject to the terms and
limitations of the Plan and the relevant grant, and the transferee shall be
entitled to the same rights as the Non-Employee Director, as if no transfer had
taken place.  As used in this paragraph, “immediate
family” shall mean, with respect to any person, his/her spouse, any child,
stepchild or grandchild, and shall include relationships arising from legal
adoption.

 

C.                                     Compliance
with Laws.  No shares of Common Stock
shall be issued hereunder unless counsel for the Company shall be satisfied
that such issuance will be in compliance with applicable federal, state, local
and foreign securities, securities exchange and other applicable laws and
requirements.  Each Share delivered
pursuant to Section VI or granted pursuant to 

 

12

 

Section VIII
and each Option granted pursuant to Section VII shall be subject to the
requirement that if at any time the Committee shall determine, in its
discretion, that the listing, registration or qualification of the Shares
delivered, granted or subject to the Option upon any securities exchange or
under any state or federal securities or other law or regulation, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition to or in connection with the granting or delivery of such
Share, such Option or the issuance or purchase of Shares thereunder, no such
Share may be issued or delivered and no Option may be exercised or paid in
Common Stock, in whole or in part, unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee. 
The holder of an RSU, Share or Option will supply the Company with such
certificates, representations and information as the Company shall request and
shall otherwise cooperate with the Company in obtaining such listing,
registration, qualification, consent or approval.  The Committee may at any time impose any
limitations upon the delivery of a Share pursuant to an RSU, the sale of a
Share or the exercise of an Option or the sale of the Shares delivered pursuant
to an RSU or issued upon exercise of an Option that, in the Committee’s
discretion, are necessary or desirable in order to comply with Section 16(b) of
the Exchange Act and the rules and regulations thereunder.  The Committee may at any time impose
additional limitations, or may amend or delete the existing limitations, upon
the exercise of Options by the tender or withholding of Shares in accordance
with Section VII.E (including an amendment or deletion of the related
ownership period for Shares specified in such Section), if such additional,
amended or deleted limitations are necessary, desirable or no longer required
(as the case may be) to remain in compliance with applicable accounting
pronouncements relating to the treatment of the plan as a fixed plan for
accounting purposes.

 

D.                                    Payment
of Withholding Tax.  Whenever Shares
are to be delivered pursuant to Section VI or issued pursuant to Section VIII
of the Plan or upon exercise of Options issued pursuant to Section VII of
the Plan, the Company shall be entitled to require as a condition of delivery (i) that
the participant remit an amount sufficient to satisfy all federal, state and
local withholding tax requirements related thereto, (ii) the withholding
of Shares due to the participant under the Plan with a Fair Market Value equal
to such amount, or (iii) any combination of the foregoing.

 

E.                                      Expenses.  The expenses of the Plan shall be borne by
the Company and its Subsidiaries.

 

F.                                      Deemed
Acceptance, Ratification and Consent. 
By accepting any Common Stock hereunder or other benefit under the Plan,
each Non-Employee Director and each person claiming under or through him or her
shall be conclusively deemed to have indicated his or her acceptance and
ratification of, and consent to, any action taken under the Plan by the
Company, the Board or the Committee.

 

G.                                     Securities
Act Registration.  The Company shall
use its best efforts to cause to be filed under the Securities Act of 1933, as
amended, a registration statement covering the Shares issued, and issuable upon
delivery of Shares pursuant to RSUs and exercise of Options granted, 

 

13

 

under the Plan.

 

H.                                    Governing
Law.  The provisions of the Plan shall
be governed by and construed in accordance with the laws of the State of
Delaware.

 

I.                                         Election
Shares.  Pending the grant of
Election Shares hereunder, all compensation earned by a Non-Employee Director
with respect to which an election to receive the grant of Election Shares
pursuant to Section VIII.B has been made shall be the property of such
director and shall be paid to him or her in cash in the event that Election
Shares are not granted by the Company hereunder.

 

J.                                        Headings;
Construction.  Headings are given to
the sections of the Plan solely as a convenience to facilitate reference.  Such headings, numbering and paragraphing
shall not in any case be deemed in any way material or relevant to the
construction of the Plan or any provisions hereof.  The use of the singular shall also include
within its meaning the plural, where appropriate, and vice versa.

 

K.                                    Code
Section 409A Compliance.  To the
extent applicable, it is intended that this Plan and any awards granted
hereunder comply with the requirements of Section 409A of the Code and any
related regulations or other guidance promulgated with respect to such Section by
the U.S. Department of the Treasury or the Internal Revenue Service and the
Plan and any Awards granted hereunder shall be interpreted and construed in a
manner consistent with such intent.

 

X.                                  This section
intentionally left blank.

 

XI.                              Amendment.

 

The Plan may be
amended at any time and from time to time by resolution of the Board as the
Board shall deem advisable; provided, however, that no amendment
shall become effective without stockholder approval if such stockholder
approval is required by law, rule or regulation.  No amendment of the Plan shall materially and
adversely affect any right of any participant with respect to any Options,
Shares or RSUs theretofore granted under the Plan without such participant’s
written consent, except for any modifications required to maintain compliance
with any federal or state statute or regulation.

 

XII.                        Termination.

 

The Plan shall
terminate upon the earlier of the following dates or events to occur:

 

(i)                       upon
the adoption of a resolution of the Board terminating the Plan; and

 

(ii)                    ten
years from the date the Plan is initially approved and adopted by the 

 

14

 

stockholders of the Company in accordance with Article XIII.

 

Except as
specifically provided herein, no termination of the Plan shall materially and
adversely affect any of the rights or obligations of any person without his or
her consent with respect to any Options, Shares or RSUs theretofore granted
under the Plan.

 

XIII.                    Stockholder
Approval and Adoption.

 

The
Plan was originally adopted by the Board on March 12, 1996 and was
approved and adopted at a meeting of the stockholders of the Company held on May 21,
1996.  The Plan was amended and restated
by the Board at meetings held on November 12, 1996, August 14, 1997
and, in connection with a 2-for-1 stock split in the form of a dividend,
effective as of July 2, 1998.  The
Plan was further amended and restated by the Board at meetings held on November 10,
1998, on September 18, 2000, effective as of June 1, 2001 and on September 8,
2003 effective as of June 1, 2004. 
Until June 1, 2004, the Plan as amended and restated on September 18,
2000, effective as of June 1, 2001 remained in effect.  The Plan was further amended and restated by
the Board at meetings held on November 9, 2004, September 10, 2006, February 20,
2007, and September 15, 2008.

 

15EXHIBIT 10.6

 

THE ALLSTATE CORPORATION

2006
EQUITY COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS

As Amended and Restated effective
as of September 15, 2008

 

 

ARTICLE I.  ESTABLISHMENT, PURPOSE AND DURATION

 

Section 1.1.            Establishment
of the Plan.  The Allstate
Corporation, a Delaware corporation (hereinafter referred to as the “Company”),
hereby establishes an equity compensation plan for non-employee directors, to
be known as “The Allstate Corporation 2006 Equity Compensation Plan for
Non-Employee Directors” (hereinafter referred to as the “Plan”), as set
forth in this document.  The Plan permits
the grant of Stock Options, Election Shares, Stock, Restricted Stock, and
Restricted Stock Units to Non-Employee Directors of the Company.

 

Section 1.2.            Purpose
of the Plan.  The purpose of the Plan
is to promote the success and enhance the value of the Company by linking the
personal interests of members of the Company’s Board of Directors (the “Board”)
to those of Company stockholders and customers. 
The Plan is further intended to assist the Company in its ability to
motivate, attract and retain highly qualified individuals to serve as directors
of the Company.

 

Section 1.3.            Duration
of the Plan.  The Plan shall become
effective when approved by the stockholders at the 2006 Annual Meeting of
Stockholders on May 16, 2006 (the “Effective Date”) and shall
remain in effect, subject to the right of the Board to terminate the Plan at
any time pursuant to Article X herein, until all shares of Stock subject
to the Plan shall have been purchased or acquired according to the Plan’s
provisions.

 

ARTICLE II.  DEFINITIONS

 

Whenever used in the Plan, the following terms shall have the meanings
set forth below and, when such meaning is intended, the initial letter of the
word is capitalized:

 

Section 2.1.            “Award”
means, individually or collectively, a grant under the Plan of Stock Options,
Election Shares, Stock, Restricted Stock, and Restricted Stock Units or any
other type of award permitted under Article IX.

 

Section 2.2.            “Award
Agreement” means an agreement setting forth the terms and provisions
applicable to an Award granted to a Participant under the Plan.

 

Section 2.3.            “Board”
shall have the meaning set forth in Section 1.2 herein.

 

1

 

Section 2.4.            “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
the Company 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
or Persons, ownership of stock of the Company possessing 30% 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 “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 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 (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
the Company or any of its Subsidiaries, acquires ownership of more than 50% of
the voting power of all Voting Securities of the Company or of the total fair
market value of the stock of the Company (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

 

(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 the Company, or a plan of liquidation of the Company
(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
Plan 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 

 

2

 

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 Plan if the investments in and
advances by the Company 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 the Company as of immediately prior to the sale or disposition.  Consolidated Total Shareholders’ Equity
means, at any date, the total shareholders’ equity of the Company and its Subsidiaries at
such date, as reported in the consolidated financial statements prepared in
accordance with GAAP.

 

Section 2.5.            “Code”
means the Internal Revenue Code of 1986, as amended from time to time.

 

Section 2.6.            “Committee”
means the Company’s Nominating and Governance Committee or such other committee
as the Board shall select.

 

Section 2.7.            “Company”
shall have the meaning set forth in Section 1.1 herein, or any successor
to the Company as provided in Article XI herein.

 

Section 2.8.            “Disability”
means an impairment which renders a Participant disabled within the meaning of
Code Section 409A(a)(2)(C).

 

Section 2.9.            “Dividend
Equivalent” means, with respect to Stock subject to an Award, a right to be
paid an amount equal to cash dividends declared on an equal number of
outstanding shares of Stock.

 

Section 2.10.          “Effective
Date” shall have the meaning set forth in Section 1.3 herein.

 

Section 2.11.          “Election
Shares” means any shares of Stock issued to a Non-Employee Director
pursuant to the election of such person to receive such shares of Stock in lieu
of cash compensation made in accordance with Section 8.2 herein.

 

Section 2.12.          “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to
time, or any successor act thereto.

 

Section 2.13.          “Exempt
Reorganization Transaction” means a Reorganization Transaction (as that
term is defined in Section 2.4(d)) 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 (as that term is defined in Section 2.4(a))
or a Majority Owner (as that term is defined in Section 2.4(b)), (b) Board
Turnover (as that term is defined in Section 2.4(c)), or (c) a sale
or 

 

3

 

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 the Company that have a total Gross Fair Market Value equal to at
least forty percent (40%) of the total Gross Fair Market Value of all of the
assets of the Company immediately before such transaction.

 

Section 2.14.          “Exercise
Period” means the period during which a Stock Option is exercisable, as set
forth in the related Award Agreement.

 

Section 2.15.          “Fair
Market Value” means the price at which a share of the Stock was last sold
in the principal United States market for the Stock as of the date for which
fair market value is being determined, which in the case of Restricted Stock or
Restricted Stock Units is the last day of the Period of Restriction.

 

Section 2.16.          “Family
Member” means any spouse, child, stepchild, sibling, parent, stepparent,
grandparent, or grandchild, including adoptive relationships; a trust in which
these persons have more than fifty (50) percent of the beneficial interest; a
foundation in which these persons (or the Non-Employee Director) control the
management of assets; and any other entity in which these persons (or the
Non-Employee Director) own more than fifty (50) percent of the voting
interests.

 

Section 2.17.          “Gross Fair
Market Value” means the value of the assets of the Company, or the
value of the assets being disposed of, determined without regard to any
liabilities associated with such assets.

 

Section 2.18.          “Non-Employee
Director” means each member of the Board who is not an officer or employee
of the Company or any of its Subsidiaries.

 

Section 2.19.          “Option
Exercise Price” means the price at which a share of Stock may be purchased
by a Participant pursuant to a Stock Option, as determined by the Committee and
set forth in the applicable Award Agreement.

 

Section 2.20.          “Participant”
means a Non-Employee Director who has an outstanding Award granted under the
Plan.

 

Section 2.21.          “Period
of Restriction” means the period during which the transfer of Restricted
Stock or Restricted Stock Units is limited in some way,  as provided in Article VII herein.

 

Section 2.22.          “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.

 

Section 2.23.          “Plan”
shall have the meaning set forth in Section 1.1 herein.

 

4

 

Section 2.24.          “Restricted
Stock” means an Award of shares of Stock granted to a Participant pursuant
to Article VII herein.  Delivery of
Restricted Stock shall be effected by either (i) a stock certificate or
certificates or (ii) book-entry
form, in an appropriate number of shares of Stock based upon the number of
shares of Restricted Stock issued.

 

Section 2.25.          “Restricted
Stock Unit” means a contractual right to acquire a share of Stock pursuant
to an Award granted to a Participant as provided in Article VII herein.

 

Section 2.26.          “Securities
Act” means the Securities Act of 1933, as amended.

 

Section 2.27.          “Stock”
means the common stock, $.01 par value, of the Company.

 

Section 2.28.          “Stock
Option” means an option to purchase shares of Stock, granted under Article VI
herein.

 

Section 2.29.          “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.

 

Section 2.30.          “Voting
Power” for purposes of Section 2.29 means the combined voting power of
the then-outstanding Voting Securities entitled to vote generally in the
election of directors.

 

Section 2.31.          “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 III.  ADMINISTRATION

 

Section 3.1.            The
Committee.  The Plan shall be
administered by the Committee

 

Section 3.2.            Authority
of the Committee.  The Committee
shall have full power except as limited by law, the Articles of Incorporation
or the Bylaws of the Company, subject to such other restricting limitations or
directions as may be imposed by the Board and subject to the provisions herein,
to recommend to the full Board the size and types of Awards and the terms and
conditions of such Awards, in a manner consistent with the Plan; to construe
and interpret the Plan and any agreement or instrument entered into under the
Plan; to establish, amend or waive rules and regulations for the Plan’s
administration; to recommend the amendment of the terms and conditions of any
outstanding Award; and to authorize any action of or make any determination by
the Company as the Committee shall deem necessary or advisable for carrying out
the purposes of the Plan; provided, however, that the terms and
conditions of any outstanding Award shall not be amended so as to adversely
affect in any material way such Award without the written consent of the
Participant holding such Award (or if the Participant is not then living, the
Participant’s personal representative or estate), unless such amendment is
required by 

 

5

 

applicable law.  Further, the Committee shall interpret and
make all other determinations which may be necessary or advisable for the
administration of the Plan.  As permitted
by law, the Committee may delegate its authorities as identified hereunder.

 

Section 3.3.            Delivery
of Stock by Company; Restrictions on Stock. 
Notwithstanding any other provision of the Plan, the Company shall have
no liability to deliver any shares of Stock or benefits under the Plan unless
such delivery would comply with all applicable laws (including, without
limitation, the Code, the Securities Act and the Exchange Act) and applicable
requirements of any securities exchange or similar entity.  The Committee may recommend that the Board
impose such restrictions on any shares of Stock acquired under the Plan as it
may deem advisable, including, without limitation, restrictions to comply with
applicable Federal securities laws, with the requirements of any stock exchange
or market upon which such Stock is then listed and/or traded and with any blue
sky or state securities laws applicable to such Stock.

 

Section 3.4.            Approval.  The Committee or the full Board shall approve
all Awards made under the Plan and all elections made by Participants, prior to
their effective date, to the extent necessary to comply with Rule 16b-3
under the Exchange Act.

 

Section 3.5.            Decisions
Binding.  All determinations and
decisions made by the Committee pursuant to the provisions of the Plan and all
related orders or resolutions of the Board shall be final, conclusive and
binding on all persons, including the Company, its stockholders, Participants
and their estates.  No member of the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any Award.

 

Section 3.6.            Costs.
The Company shall pay all costs of administration of the Plan.

 

ARTICLE IV.  STOCK SUBJECT TO THE PLAN

 

Section 4.1.            Number
of Shares.  Subject to Section 4.2
herein, the maximum number of shares of Stock that may be issued pursuant to
Awards under the Plan shall be 600,000. 
Shares of Stock underlying lapsed or forfeited Awards of Restricted
Stock shall not be treated as having been issued pursuant to an Award under the
Plan.  Shares of Stock that are
potentially deliverable under an Award that expires or is cancelled, forfeited,
settled in cash or otherwise settled without delivery of shares of Stock shall
not be treated as having been issued under the Plan.  Shares of Stock that are tendered or withheld
to satisfy the Option Exercise Price related to a Stock Option or other Award
shall be deemed to be shares of Stock issued under the Plan.  Shares of Stock issued pursuant to the Plan
may be (i) authorized but unissued shares of Stock, (ii) treasury
stock, or (iii) shares purchased on the open market.

 

Section 4.2.            Adjustments
in Authorized Stock and Awards.  In
the event of any equity restructuring (within the meaning of Financial
Accounting Standards No. 123 (revised 2004)) that causes the per share
value of shares of Stock to change, such as a stock dividend, stock split, 

 

6

 

spin off, rights offering, or recapitalization
through a large, nonrecurring cash dividend, the Committee shall cause there to
be made an equitable adjustment to the number and kind of shares that may be
issued under the Plan and to the number and kind of shares or units subject to
and the exercise price (if applicable) of any then outstanding Awards of Stock
Options, Restricted Stock, Restricted Stock Units or any other Awards related
to shares of Stock (to the extent such other Awards would not otherwise
automatically adjust in the equity restructuring).  In the event of any other change in corporate
capitalization, such as a merger, consolidation, any reorganization (whether or
not such reorganization comes within the definition of such term in Section 368
of the Code) or any partial or complete liquidation of the Company, such
equitable adjustments described in the foregoing sentence shall be made as may
be determined to be appropriate and equitable by the Board upon recommendation
of the Committee to prevent dilution or enlargement of rights.  In either case, any such adjustment shall be
conclusive and binding for all purposes of the Plan.  Unless otherwise determined by the Board upon
recommendation of the Committee, the number of shares of Stock subject to an
Award shall always be a whole number.  In
no event shall an outstanding Stock Option be amended for the sole purpose of
reducing the Option Exercise Price thereof.

 

ARTICLE V.  ELIGIBILITY AND PARTICIPATION

 

Section 5.1.            Eligibility
and Participation.  Subject to the
provisions of the Plan, the Committee may, from time to time, recommend to the
full Board the Non-Employee Directors to whom Awards shall be granted and shall
determine the nature and amount of each Award.

 

ARTICLE VI.  STOCK OPTIONS

 

Section 6.1.            Grant
of Stock Options.  Subject to the
terms and conditions of the Plan, Stock Options may be granted to a
Non-Employee Director at any time and from time to time, as shall be determined
by the Board upon recommendation of the Committee.  The Committee shall recommend to the full
Board the number of shares of Stock subject to Stock Options granted to each
Participant (subject to Article IV herein) and, consistent with the
provisions of the Plan, terms and conditions pertaining to such Stock Options.

 

(a)           Dividend Equivalents and Other Distributions.  The Committee shall recommend to the full
Board whether and to what extent any Participant shall be entitled to Dividend
Equivalents and/or other distributions paid with respect to Stock Options,
provided that any such right shall be evidenced by an Award Agreement
containing terms and conditions that are consistent with the provisions of Section 409A
and applicable guidance promulgated thereunder.

 

Section 6.2.            Stock
Option Award Agreement.  Each Stock
Option grant shall be evidenced by an Award Agreement that shall specify the
Option Exercise Price, the term of the Stock Option (which shall not be greater
than ten years), the number of shares of Stock to which the Stock 

 

7

 

Option pertains, the Exercise Period and such
other provisions as the Board shall determine upon recommendation of the
Committee.  The Option Exercise Price
shall not be less than 100 % of the Fair Market Value of the Stock on the date
of grant.

 

(a)           Vesting.  Except as
otherwise recommended by the Committee to the full Board and set forth in the
applicable Award Agreement evidencing a Stock Option, each Stock Option shall
vest in three installments as follows:  (i) on
each of the first and second anniversaries of the date of grant, as to
one-third of the shares of Stock subject to such Stock Option (with any
resulting fractional share rounded to the nearest whole share) and (ii) on
the third anniversary of the date of grant, as to the remaining unvested
portion of such Stock Option.

 

Section 6.3.            Exercise
of and Payment for Stock Options. 
Stock Options granted under the Plan shall be exercisable at such times
and shall be subject to such restrictions and conditions as the Board shall in
each instance approve upon recommendation of the Committee and set forth in the
Award Agreement.  Without limiting the
generality of the foregoing, a Participant may exercise a Stock Option at any
time during the Exercise Period.  Stock
Options shall be exercised by the delivery of a written notice (or other method
acceptable to the Company) of exercise to the Company or its designee, setting
forth the number of shares of Stock with respect to which the Stock Option is
to be exercised, accompanied by provision for full payment of the Stock.  The Option Exercise Price shall be
payable:  (i) in cash or its
equivalent, (ii) by tendering (by actual delivery of shares or by
attestation) previously acquired shares of Stock having an aggregate Fair
Market Value at the time of exercise equal to the total Option Exercise Price, (iii) by
broker-assisted cashless exercise, (iv) by share withholding or (v) by
a combination of (i), (ii), (iii) and/or (iv).  As soon as practicable after receipt of a
written notification (or other method acceptable to the Company) of exercise of
a Stock Option and provisions for full payment therefor, the Company shall (a) deliver
to the Participant, in the Participant’s name or the name of the Participant’s
designee, a stock certificate or certificates in an appropriate aggregate amount
based upon the number of shares of Stock purchased under the Stock Option, or (b) cause
to be issued in the Participant’s name or the name of the Participant’s
designee, in book-entry form, an appropriate number of shares of Stock based
upon the number of shares of Stock purchased under the Stock Option.

 

Section 6.4.            Termination
of Director Status.  Except as
otherwise recommended by the Committee to the full Board and set forth in the
applicable Award Agreement evidencing a Stock Option, the provisions of this Section 6.4
related to vesting and exercise of Stock Options shall apply.

 

(a)           Vesting.  Upon
a Non-Employee Director’s mandatory retirement pursuant to the policies of the
Board, the unvested portions of any outstanding Stock Options held by such
Non-Employee Director shall fully vest. 
Upon the termination of a Non-Employee Director’s tenure for any other
reason, the unvested portions of any outstanding Stock 

 

8

 

Options shall
expire and no Stock Options granted to such Non-Employee Director shall vest
after the termination of such Non-Employee Director’s tenure on the Board.

 

(b)           Exercise Period.  Upon the termination of the Non-Employee
Director’s position on the Board of the Company for any reason, each
outstanding vested and previously unexercised Stock Option shall expire three
months after the date of such termination; provided that (a) upon
the termination of a Participant’s position on the Board as a result of death
or Disability, each outstanding vested and previously unexercised Stock Option
shall expire two years after the date of his or her termination as a
Non-Employee Director; and (b) upon the mandatory retirement of a
Participant pursuant to the policies of the Board, each outstanding vested and
previously unexercised Stock Option shall expire five years after the date of
his or her termination as a Non-Employee Director.  In no event shall the provisions of this Section 6.4
operate to extend the original expiration date of any Stock Option.

 

Section 6.5             Transferability
of Options.  Except as otherwise
recommended by the Committee to the full Board and set forth in the applicable
Award Agreement, all Stock Options granted to a Participant under the Plan
shall be exercisable during his or her lifetime only by such Participant or by
such Participant’s guardian or other legal representative, and no Stock Option
granted under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution; provided, however, that the vested portions of Stock
Options may be transferred by the Participant during his lifetime to any Family
Member.  A transfer of a Stock Option pursuant
hereto may only be effected by the Company at the written request of a
Participant and shall become effective only when recorded in the Company’s
record of outstanding Stock Options.  In
the event a Stock Option is transferred as contemplated herein, such
transferred Stock Option may not be subsequently transferred by the transferee
except by will or the laws of descent and distribution.  Otherwise, a transferred Stock Option shall
continue to be governed by and subject to the terms and limitations of the Plan
and the relevant Award Agreement, and the transferee shall be entitled to the
same rights as the Participant, as if no transfer had taken place.  In no event shall a Stock Option be
transferred for consideration.

 

Section 6.6.            Change
of Control.   In the event of a
Change of Control, the Stock Options may be assumed by the successor
corporation or a parent of such successor corporation or substantially
equivalent Stock Options may be substituted by the successor corporation or a
parent of such successor corporation, and if the successor corporation does not
assume the Stock Options or substitute options, then all outstanding and
unvested Stock Options shall become immediately exercisable and all outstanding
Stock Options shall terminate if not exercised as of the date of the Change of Control
(or other prescribed period of time). 
The Company shall provide at least 30 days prior written notice of the
Change of Control to the holders of all outstanding Stock Options, which notice
shall state whether (a) the Stock Options will be 

 

9

 

assumed by the successor corporation or
substantially equivalent stock options will be substituted by the successor
corporation, or (b) the Stock Options are thereafter vested and
exercisable and will terminate if not exercised as of the date of the Change of
Control (or other prescribed period of time).

 

ARTICLE VII.  RESTRICTED STOCK AND RESTRICTED STOCK UNITS

 

Section 7.1.            Grant
of Restricted Stock and Restricted Stock Units. Subject to the terms and
conditions of the Plan, Restricted Stock and/or Restricted Stock Units may be
granted to a Non-Employee Director at any time and from time to time, as shall
be determined by the Board upon recommendation of the Committee.  The Committee shall recommend to the full Board
the number of shares of Restricted Stock and/or Restricted Stock Units granted
to each Participant (subject to Article IV herein) and, consistent with
the provisions of the Plan, the terms and conditions pertaining to such Awards.

 

(a)           Dividends, Dividend Equivalents and Other
Distributions.  The Committee
shall recommend to the full Board whether and to what extent any Participant
shall be entitled to cash dividends, Dividend Equivalents and/or other
distributions paid with respect to Restricted Stock and Restricted Stock Units,
provided that any such right shall be evidenced by an Award Agreement
containing terms and conditions that are consistent with the provisions of Section 409A
and applicable guidance promulgated thereunder.

 

Section 7.2.            Restricted
Stock/Restricted Stock Unit Award Agreement.  Each grant of Restricted Stock and/or
Restricted Stock Units grant shall be evidenced by an Award Agreement that
shall specify the number of shares of Restricted Stock and/or Restricted Stock
Units granted, the Period or Periods of Restriction, the conditions upon which
Restricted Stock and/or Restricted Stock Units shall no longer be forfeitable,
and such other provisions as recommended by the Committee.

 

Section 7.3.            Transferability.  Restricted Stock and Restricted Stock Units
granted hereunder may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the end of the applicable Period of Restriction
recommended by the Committee and specified in the Award Agreement.  During the applicable Period of Restriction,
all rights with respect to the Restricted Stock and Restricted Stock Units
granted to a Participant under the Plan shall be available during his or her
lifetime only to such Participant or his or her legal representative.

 

Section 7.4.            Restricted
Stock Certificates.  The Company
shall have the right to retain the certificates (if any) representing
Restricted Stock in the Company’s possession until such time as all
restrictions applicable to such shares have been satisfied.

 

Section 7.5.            Forfeiture
Restriction.  Restricted Stock shall
become freely transferable and no longer subject to forfeiture after the last
day of the Period of Restriction applicable thereto.  

 

10

 

Unless otherwise determined by the Board upon
recommendation of the Committee, the Period of Restriction applicable to
Restricted Stock and Restricted Stock Units shall lapse upon the earlier of (i) the
date of the Non-Employee Director’s death or Disability, (ii) for Awards
granted before September 15, 2008, the first anniversary of the date on which
the Non-Employee Director is no longer serving on the Board; and (iii) for
Awards granted after September 15, 2008, the date on which the Non-Employee Director is no longer serving on the
Board.  Payment of vested
Restricted Stock Units shall be made following the close of the Period of
Restriction.  Once Restricted Stock is
released from the restrictions, the Participant shall be entitled to receive a
stock certificate.  The Board, upon
recommendation of the Committee, may determine whether payment of Restricted
Stock Units shall be in cash or shares of Stock (or a combination thereof),
which have an aggregate Fair Market Value equal to the value of the Restricted
Stock Units at the close of the applicable Period of Restriction.  Delivery of Stock shall be effected by either
(a) delivery to the Participant, in the Participant’s name or the name of
the Participant’s designee, a stock certificate or certificates in an
appropriate aggregate amount based upon the number of shares of Stock
underlying the Restricted Stock Units, or (b) book-entry form, in an
appropriate number of shares of Stock based upon the number of shares of Stock  underlying the Restricted Stock Units.

 

Section 7.6.            Voting
Rights.  Unless otherwise recommended
by the Committee to the full Board and set forth in the applicable Award
Agreement, during the Period of Restriction, Participants may exercise full
voting rights with respect to the Restricted Stock.

 

Section 7.7.            Change
of Control.  In the event of a Change
of Control, all outstanding Restricted Stock Units shall immediately be payable
in Stock upon consummation of the Change of Control.

 

ARTICLE VIII.  ELECTION TO RECEIVE STOCK IN LIEU OF CASH
COMPENSATION

 

Section 8.1.            General.  In lieu of receiving the cash compensation,
including annual and committee retainer fees (collectively, the “Annual
Retainer Fees”), payable for services to be rendered by a Non-Employee Director
for any period beginning on June 1 and continuing to the following May 31
(or such other period for which cash compensation is payable to Non-Employee
Directors pursuant to the policies of the Board), a Non-Employee Director may
make a written irrevocable election to reduce the Annual Retainer Fees by a
specified percentage (which percentage shall be in ten percent increments) and
receive an equivalent value in Election Shares granted in accordance with this Article VIII.

 

Section 8.2.            Election.  The election shall be made on a form
prescribed by the Committee and must be returned to the Committee or its
designee no later than five business days prior to the period for which the
election is to be effective.  The
election form shall state the amount of cash compensation to be received in the
form of Election Shares (expressed as a percentage of the 

 

11

 

cash compensation otherwise payable in
cash).   Such election shall remain in
effect until revoked or changed for any subsequent period.

 

Section 8.3.            Issuance
of Election Shares.  If a
Non-Employee Director elects pursuant to Section 8.2 above to receive
Election Shares, there shall be issued to such Director on the first day of the
period to which such election relates and is effective, a number of Election
Shares equal to the amount of compensation otherwise payable divided by the
Fair Market Value of the Election Shares. 
Cash will be paid to the Non-Employee Director in lieu of any fractional
Election Shares based upon the Fair Market Value of such fractional Election
Share.

 

ARTICLE IX.  STOCK AND OTHER AWARDS

 

Section 9.1.            Stock
Awards.  The Board, upon
recommendation of the Committee, shall have the right to issue Stock free of
any forfeiture or transferability restrictions.

 

Section 9.2.            Other
Awards.  The Board, upon
recommendation of the Committee, shall have the right to grant other Awards and
determine the manner and timing of payment under or settlement of any such
Awards.

 

(a)           Dividends, Dividend Equivalents and Other Distributions.  The Committee shall recommend to the full
Board whether and to what extent any Participant shall be entitled to cash
dividends, Dividend Equivalents and/or other distributions paid with respect to
such other Awards, provided that any such right shall be evidenced by an Award
Agreement containing terms and conditions that are consistent with the
provisions of Section 409A and applicable guidance promulgated thereunder.

 

ARTICLE X.  AMENDMENT, MODIFICATION AND TERMINATION

 

Section 10.1.          The
Board may, at any time and from time to time, alter, amend, suspend or
terminate the Plan, in whole or in part, provided that no amendment
shall be made which shall increase the total number of shares of Stock that may
be issued under the Plan, materially modify the requirements for participation
in the Plan, or materially increase the benefits accruing to Participants under
the Plan, in each case unless such amendment is approved by the stockholders of
the Company.  The Plan was amended and
restated by the Board at a meeting held on September 10, 2006.  The Plan was again amended and restated by
the Board at meetings held on February 20, 2007 and September 15,
2008.

 

ARTICLE XI.  SUCCESSORS

 

Section 11.1.          All
obligations of the Company under the Plan, with respect to Awards granted
hereunder, shall be binding on any successor to the Company, whether the
existence of such 

 

12

 

successor is the result of a direct or
indirect purchase, merger, consolidation or otherwise of all or substantially
all of the business and/or assets of the Company.

 

ARTICLE XII.  GENERAL PROVISIONS

 

Section 12.1.          Gender
and Number.   Except where otherwise
indicated by the context, any masculine term used herein also shall include the
feminine, the plural shall include the singular and the singular shall include
the plural.

 

Section 12.2.          Severability.  In the event any provision of the Plan shall
be held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.

 

Section 12.3.          Requirements
of Law.  The granting of Awards and
the issuance of Stock under the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

 

Section 12.4.          Governing
Law.  To the extent not preempted by
Federal law, the Plan, and all agreements hereunder, shall be construed in
accordance with, and governed by, the laws of the State of Delaware, except
with regard to conflicts of law provisions.

 

Section 12.5.          Code Section 409A
Compliance.  To the extent
applicable, it is intended that this Plan and any Awards granted hereunder
comply with the requirements of Section 409A of the Code and any related
regulations or other guidance promulgated with respect to such Section by
the U.S. Department of the Treasury or the Internal Revenue Service and the
Plan and any Awards granted hereunder shall be interpreted and construed in a
manner consistent with such intent.

 

Section 12.6.          Rights
of Board Members.  Nothing in this
Plan shall interfere with or limit in any way the rights of stockholders of the
Company or the Board to elect or remove members of the Board at any time or
confer upon any Participant any right to continue as a member of the Board.

 

Section 12.7.          No Right
to Specific Assets.  Nothing
contained in the Plan and no action taken pursuant to the Plan shall create or
be construed to create a trust of any kind or any fiduciary relationship
between the Company and any Participant, the executor, administrator or other
personal representative or designated beneficiary of such Participant, or any
other persons.  To the extent that any
Participant or his executor, administrator, or other personal representative,
as the case may be, acquires a right to receive any benefit from the Company
pursuant to the Plan, such right shall be no greater than the right of an unsecured
general creditor of the Company.

 

Section 12.8           Rights
as a Stockholder.  A Participant
shall have no rights as a stockholder with respect to any Stock until he shall
have become the holder of record of such Stock.

 

13

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