Document:

Exhibit 10.29

 

 

 

 

 

 

[AMENDED AND RESTATED] 1

 

CHANGE OF CONTROL EMPLOYMENT AGREEMENT

 

AMONG

 

THE ALLSTATE CORPORATION,

 

ALLSTATE INSURANCE COMPANY

 

AND

 

[INSERT NAME OF EXECUTIVE]

 (Tier One)

 

 

 

 

 

 

 

 

 

(1) This text is
to be used in Agreements originally entered into prior to November 13, 2007,
and being amended and restated on or after this date.

 

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I.

  	
   

  	
  CERTAIN DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II.

  	
   

  	
  POST-CHANGE PERIOD

  	
   

  	
  8

  
	
  2.1

  	
   

  	
  Position and Duties.

  	
   

  	
  8

  
	
  2.2

  	
   

  	
  Compensation.

  	
   

  	
  9

  
	
  2.3

  	
   

  	
  Stock Incentive Awards.

  	
   

  	
  11

  
	
  2.4

  	
   

  	
  Unfunded Deferred Compensation.

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III.

  	
   

  	
  TERMINATION OF EMPLOYMENT

  	
   

  	
  12

  
	
  3.1

  	
   

  	
  Disability.

  	
   

  	
  12

  
	
  3.2

  	
   

  	
  Death.

  	
   

  	
  12

  
	
  3.3

  	
   

  	
  Cause.

  	
   

  	
  12

  
	
  3.4

  	
   

  	
  Good Reason.

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV.

  	
   

  	
  COMPANY’S OBLIGATIONS UPON A TERMINATION OF
  EMPLOYMENT

  	
   

  	
  15

  
	
  4.1

  	
   

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

  	
   

  	
  15

  
	
  4.2

  	
   

  	
  If by the Company for Cause.

  	
   

  	
  18

  
	
  4.3

  	
   

  	
  If by Executive Other Than for Good Reason

  	
   

  	
  18

  
	
  4.4

  	
   

  	
  If by the Company for Disability

  	
   

  	
  18

  
	
  4.5

  	
   

  	
  If Upon Death

  	
   

  	
  18

  
	
  4.6

  	
   

  	
  Amount Contested

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V.

  	
   

  	
  CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY

  	
   

  	
  20

  
	
  5.1

  	
   

  	
  Gross-up for Certain Taxes.

  	
   

  	
  20

  
	
  5.2

  	
   

  	
  Determination by Executive.

  	
   

  	
  21

  
	
  5.3

  	
   

  	
  Additional Gross-up Amounts.

  	
   

  	
  22

  
	
  5.4

  	
   

  	
  Gross-up Multiple.

  	
   

  	
  22

  
	
  5.5

  	
   

  	
  Opinion of Counsel.

  	
   

  	
  22

  
	
  5.6

  	
   

  	
  Amount Increased or Contested

  	
   

  	
  23

  
	
  5.7

  	
   

  	
  Limitations on Gross-Up Payments

  	
   

  	
  25

  
	
  5.8

  	
   

  	
  Refunds.

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI.

  	
   

  	
  EXPENSES AND INTEREST

  	
   

  	
  25

  
	
  6.1

  	
   

  	
  Legal and Other Expenses

  	
   

  	
  25

  
	
  6.2

  	
   

  	
  Interest

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII.

  	
   

  	
  NO SET-OFF OR MITIGATION

  	
   

  	
  26

  
	
  7.1

  	
   

  	
  No Set-off by Company

  	
   

  	
  26

  
	
  7.2

  	
   

  	
  No Mitigation

  	
   

  	
  26

  

 

 

i

 

 

 

	
  ARTICLE VIII.

  	
   

  	
  RESTRICTIVE COVENANTS

  	
   

  	
  27

  
	
  8.1

  	
   

  	
  Non-Competition

  	
   

  	
  27

  
	
  8.2

  	
   

  	
  Non-Solicitation

  	
   

  	
  27

  
	
  8.3

  	
   

  	
  Reasonableness of Restrictive Covenants.

  	
   

  	
  28

  
	
  8.4

  	
   

  	
  Right to Injunction; Survival of Undertakings.

  	
   

  	
  28

  
	
  8.5

  	
   

  	
  Non-Disparagement

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX.

  	
   

  	
  NON-EXCLUSIVITY OF RIGHTS

  	
   

  	
  29

  
	
  9.1

  	
   

  	
  Waiver of Certain Other Rights

  	
   

  	
  29

  
	
  9.2

  	
   

  	
  Other Rights

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  29

  
	
  10.1

  	
   

  	
  No Assignability

  	
   

  	
  29

  
	
  10.2

  	
   

  	
  Successors

  	
   

  	
  29

  
	
  10.3

  	
   

  	
  Payments to Beneficiary

  	
   

  	
  30

  
	
  10.4

  	
   

  	
  Non-Alienation of Benefits

  	
   

  	
  30

  
	
  10.5

  	
   

  	
  No Deference

  	
   

  	
  30

  
	
  10.6

  	
   

  	
  Severability

  	
   

  	
  30

  
	
  10.7

  	
   

  	
  Amendments

  	
   

  	
  30

  
	
  10.8

  	
   

  	
  Notices

  	
   

  	
  30

  
	
  10.9

  	
   

  	
  Counterparts

  	
   

  	
  31

  
	
  10.10

  	
   

  	
  Governing Law

  	
   

  	
  31

  
	
  10.11

  	
   

  	
  Captions

  	
   

  	
  31

  
	
  10.12

  	
   

  	
  Number and Gender

  	
   

  	
  31

  
	
  10.13

  	
   

  	
  Tax Withholding

  	
   

  	
  31

  
	
  10.14

  	
   

  	
  No Waiver

  	
   

  	
  31

  
	
  10.15

  	
   

  	
  Joint and Several Liability

  	
   

  	
  31

  
	
  10.16

  	
   

  	
  No Rights Prior to Effective Date

  	
   

  	
  31

  
	
  10.17

  	
   

  	
  Six-month Delay

  	
   

  	
  31

  
	
  10.18

  	
   

  	
  Interpretation to Avoid 409A Penalties

  	
   

  	
  31

  
	
  10.19

  	
   

  	
  Entire Agreement

  	
   

  	
  32

  

 

 

ii

 

THE
ALLSTATE CORPORATION

[AMENDED
AND RESTATED]2  CHANGE OF CONTROL
EMPLOYMENT AGREEMENT

 

[THIS AGREEMENT
dated as of
              ,
20    (the “Agreement Date”) is made by and among The
Allstate Corporation, a Delaware corporation (“Allstate”), the Allstate
Insurance Company, an Illinois insurance corporation (“AIC”), and                  
(“Executive”).]3

 

[The Allstate
Corporation, a Delaware corporation (“Allstate”), Allstate Insurance
Company, an Illinois insurance company (“AIC”), and                          
(“Executive”) are parties to a Change of Control Employment Agreement
originally entered into on
                      (the “Agreement Date”).  To comply with the provisions of Section 409A
of the Internal Revenue Code so as to avoid the imposition of excise taxes and
penalties on the Executive under Section 409A and to amend certain provisions
of the original Agreement, this Amended and Restated Agreement is entered into,
to be effective as of
                                           ]4

 

RECITALS

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

ARTICLE I.

CERTAIN DEFINITIONS

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

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

(2)                                  This text is to be used in Agreements
originally entered into prior to November 13, 2007, and being amended and
restated on or after this date.

 

(3)           This
text is to be used in Agreements entered into on or after November 13, 2007.

(4)                                  This text is to be used in Agreements
originally entered into prior to November 13, 2007, and being amended and
restated on or after this date.

 

 

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

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

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

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

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

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

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

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

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

1.11            “Article” means an article of
this Agreement.

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

1.13            “Beneficiary” — see Section
10.3.

 

2

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

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

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

1.17           “CEO” means Chief Executive
Officer.

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

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

 

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

 

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

 

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

 

 

3

 

 

Notwithstanding anything contained herein to the
contrary, no transaction or event shall constitute a Change of Control for
purposes of this Agreement unless the transaction or event constituting the
Change of Control also constitutes a change in the ownership of a corporation
(as defined in Treasury Regulation Section 1.409A-3(i)(5)(v)), a change in
effective control of a corporation (as defined in Treasury Regulation Section
1.409A-3(i)(5)(vi)) or a change in the ownership of a substantial portion of
the assets of a corporation (as defined in Treasury Regulation Section
1.409A-3(i)(5)(vii)).

 

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

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

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

1.22           “Company Counsel Opinion” — see
Section 5.5.

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

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

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

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

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

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

1.26           “Disability Effective Date” — see
Section 3.1.

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

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

1.29           “Excise Taxes” — see Section
5.1.

 

4

 

1.30           “Executive Counsel Opinion” — see
Section 5.5.

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

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

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

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

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

1.36           “including” means including
without limitation.

1.37           “IRS” means the Internal
Revenue Service.

1.38           “IRS Claim” — see Section 5.6.

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

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

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

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

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

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

1.45           “Lump Sum Value” of an annuity
payable pursuant to a defined benefit plan means, as of a specified date, the
present value of such annuity, as determined, as of such date, under generally
accepted actuarial principles using (i) the applicable interest rate, mortality
tables and other methods and assumptions under Code Section 417(e) as published
by the IRS and used for determining the value of an immediate annuity on the
Termination Date or (ii) if such interest rate and mortality assumptions are no
longer published by the IRS, the interest rate 

 

5

 

and mortality assumptions determined in a manner as
similar as practicable to the manner by which the Code Section 417(e) interest
rate and mortality assumptions were determined immediately prior to the IRS’s
cessation of publication of such assumptions; provided, however, that if such
defined benefit plan provides for a lump sum distribution and such lump-sum
distribution either (x) is the only payment method available under such plan or
(y) provides for a greater amount than the Lump Sum Value of the Maximum
Annuity available under such plan, then “Lump Sum Value” shall mean such lump
sum amount.

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

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

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

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

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

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

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

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

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

1.55            “Potential Parachute Payments”
— see Section 5.1.

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

 

6

 

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

1.58           “Refund Claim” — see Section
5.6.

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

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

1.61           “SEC” means the Securities and
Exchange Commission.

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

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

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

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

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

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

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

1.69           “Termination Date” means the
date of the receipt of the Notice of Termination by Executive (if such Notice
is given by the Company) or by the Company (if such Notice is 

 

7

 

given by Executive), or any later date, not more than
15 days after the giving of such Notice, specified in such Notice; provided,
however, that:

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

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

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

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

 

ARTICLE II.

POST-CHANGE PERIOD

2.1             Position and Duties.

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

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

 

8

 

2.2             Compensation.

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

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

(c)           LTIP Bonus.  The Company shall also:

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

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

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

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

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

 

9

 

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

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

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

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

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

(h)           Office and Support Staff.  During the Post-Change Period, Executive
shall be entitled to an office or offices of a size and with furnishings and
other appointments, and to secretarial and other assistance in accordance with
the most favorable Policies applicable to peer executives of the Company, but
in no event shall such Policies be materially less favorable, in the aggregate,
than the most favorable of those provided by 

 

10

 

the Company for Executive
under such Policies in effect at any time during the 90-day period immediately
before the Effective Date.

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

2.3             Stock Incentive Awards.

(a)             On the Effective Date of a Change of Control, (i) all of
Executive’s unvested Stock Options then outstanding (whether granted before or
after the Agreement Date) shall immediately become fully vested and
exercisable, and (ii) all of Executive’s Restricted Shares then outstanding
shall immediately become fully vested and nonforfeitable.

 

(b)             [This Section 2.3 amends all award agreements dated as
of any date before the Agreement Date. 
Accordingly, all provisions of such award agreements relating to a
change of control of the Company, including all grants of limited stock
appreciation rights, are hereby cancelled (if not previously cancelled),
effective as of the Agreement Date.]5

 

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

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

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

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

(5)                          This text is to be used in Agreements
originally entered into prior to November 13, 2007, and being amended and
restated on or after this date.

 

 

 

11

 

ARTICLE III.

TERMINATION OF EMPLOYMENT

3.1             Disability.

(a)           During the Post-Change Period, the
Company may terminate Executive’s employment because of Executive’s Disability
by giving Executive or his legal representative, as applicable,
(i) written notice in accordance with Section 10.8 of the Company’s
intention to terminate Executive’s employment pursuant to this Section and
(ii) a certification of Executive’s Disability by a physician selected by
the Company or its insurers, subject to the consent of Executive or Executive’s
legal representative, which consent shall not be unreasonably withheld or
delayed.  Executive’s employment shall
terminate effective on the 30th day (the “Disability Effective Date”)
after Executive’s receipt of such notice unless, before the Disability
Effective Date, Executive shall have resumed the full-time performance of
Executive’s duties.

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

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

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

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

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

3.3             Cause.

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

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

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

 

12

 

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

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

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

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

(1)           bad judgment or negligence;

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

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

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

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

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

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

(ii)           Not less than 30 days prior to the
date of such meeting, the Company shall provide Executive and each member of
the Board written notice (a “Notice of Consideration”) of (x) a detailed
description of the acts or omissions

 

13

 

alleged to constitute
Cause, (y) the date, time and location of such meeting of the Board, and
(z) Executive’s rights under clause (iii) below.

(iii)          Executive shall have the opportunity
to appear before the Board in person and, at Executive’s option, with legal
counsel, and/or to present to the Board a written response to the Notice of
Consideration.

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

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

3.4             Good Reason.

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

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

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

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

(iii)          any material diminution in the
authority, duties, or responsibilities of the person to whom Executive reports,
including a requirement that Executive report to a corporate officer or
employee instead of reporting directly to the Board, if applicable;

 

14

 

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

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

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

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

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

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

 

ARTICLE IV.

COMPANY’S OBLIGATIONS UPON A TERMINATION
OF EMPLOYMENT

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

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

(i)            all Accrued Obligations;

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

 

15

 

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

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

(v)           an amount equal to three (3.0) times
the sum of (y) Base Salary, and (z) the Target Annual Bonus, each
determined as of the Termination Date; provided, however, that any reduction in
Executive’s Base Salary or Target Annual Bonus that would qualify as Good
Reason shall be disregarded for this purpose; and

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

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

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

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

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

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

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

 

16

 

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

minus

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

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

(c)           (i) On the date of Termination of
Employment, all of Executive’s unvested Stock Options then outstanding (whether
granted before or after the Agreement Date) shall immediately become fully
vested and exercisable, and (ii) all of Executive’s Restricted Shares then
outstanding shall immediately become fully vested and nonforfeitable.  This Section 4.1(c) amends all award
agreements dated as of any date before the Agreement Date.

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

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

(f)            The Company shall pay on behalf of
Executive all reasonable fees and costs charged by the outplacement firm
selected by Executive to provide outplacement services to Executive that are
incurred no later than the end of the second year following the year in which
the Termination of Employment occurs.

(g)           During the period of time which Executive
would be entitled to continuation coverage under a Company-sponsored group
health plan under Section 4980 of the Code or such later date as any Plan may
specify, the Company shall continue to make available to Executive and
Executive’s family welfare benefits (including medical, 

 

17

 

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

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

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

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

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

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

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

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

 

18

 

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

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

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

4.6           Amount Contested.

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

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

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

 

19

 

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

 

ARTICLE V.

CERTAIN ADDITIONAL PAYMENTS BY THE
COMPANY

5.1           Gross-up
for Certain Taxes.

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

(i)        the amount of such Excise Taxes

multiplied by

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

 

20

 

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

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

5.2             Determination by Executive.

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

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

 

21

 

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

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

multiplied by

(b)           the Gross-Up Multiple.

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

5.5             Opinion of Counsel.  “Executive Counsel Opinion” means an
opinion of nationally recognized executive compensation counsel to the effect
(i) that the amount of the Gross-Up Payment determined by Executive pursuant to
Section 5.2 is the amount that a court of competent jurisdiction, based on a
final judgment not subject to further appeal, is most likely to decide to have
been calculated in accordance with this Article and applicable law and (ii) if
the Company has previously delivered a Company Certificate to Executive, that
there is no reasonable basis or no substantial authority for the calculation of
the Gross-Up Payment set forth in the Company Certificate. “Company Counsel
Opinion” means an opinion of nationally recognized executive compensation
counsel to the effect that (i) the amount of the Gross-Up Payment set forth in
the Company Certificate is the amount that a court of competent jurisdiction,
based on a final judgment not subject to further appeal, is most likely to
decide to have been calculated in accordance with this Article and applicable
law and (ii) for purposes of Section 6662 of the Code, Executive has
substantial authority to report on his federal income tax return the amount of
Excise Taxes set forth in the Company Certificate.

 

22

 

5.6             Amount Increased or Contested.

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

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

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

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

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

(b)           At any time after the payment by
Executive of any amount of Excise Taxes or related interest or penalties in
respect of Potential Parachute Payments (whether or not such amount was based
on a Company Certificate, an Executive’s Gross-Up Determination or an IRS
Claim), the Company may in its discretion require Executive to pursue a claim
for a refund (a “Refund Claim”) of all or any portion of such Excise
Taxes, interest or penalties as the Company may specify by written notice to
Executive.

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

 

23

 

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

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

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

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

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

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

(d)           The Company may at any time in its
discretion direct Executive to (i) contest the IRS Claim in any lawful manner
or (ii) pay the amount specified in an IRS Claim and pursue a Refund Claim;
provided, however, that if the Company directs Executive to pay an IRS Claim
and pursue a Refund Claim, the Company shall advance the amount of such payment
to Executive on an interest-free basis and shall indemnify Executive, on
an after-tax basis, for any Taxes, Excise Taxes and related interest or
penalties imposed with respect to such advance.

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

 

24

 

5.7             Limitations on Gross-Up Payments.

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

(b)           For purposes of this Agreement:

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

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

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

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

 

ARTICLE VI.

EXPENSES AND INTEREST

6.1             Legal and Other Expenses.

(a)           If Executive incurs legal fees
(including fees in connection with the delivery of an Executive Counsel
Opinion) or other expenses (including expert witness 

 

25

 

and accounting fees) in an effort to determine,
secure, preserve, establish entitlement to, or obtain benefits under this
Agreement (collectively, “Legal and Other Expenses”), the Company shall,
regardless of the outcome of such effort, pay or reimburse Executive for such
Legal and Other Expenses in accordance with Section 6.1(b).

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

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

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

 

ARTICLE VII.

NO SET-OFF OR MITIGATION

7.1             No Set-off by Company.  Executive’s right to receive when due the
payments and other benefits provided for under this Agreement is absolute,
unconditional and subject to no set-off, counterclaim or legal or equitable
defense.  Time is of the essence in the
performance by the Company of its obligations under this Agreement.  Any claim that the Company may have against
Executive, whether for a breach of this Agreement or otherwise, shall be
brought in a separate action or proceeding and not as part of any action or
proceeding brought by Executive to enforce any rights against the Company under
this Agreement, except if (i) the Company’s claim is determined by a court
to be a compulsory counterclaim under applicable law or (ii) if a court
determines that the Company would otherwise be materially prejudiced if its
claim were to be brought in a separate action.

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

 

26

 

ARTICLE VIII.

RESTRICTIVE COVENANTS

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

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

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

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

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

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

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

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

 

27

 

8.3             Reasonableness of Restrictive
Covenants.

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

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

8.4             Right to Injunction; Survival of
Undertakings.

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

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

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

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

 

28

 

believes to be truthful at the time given or by any
other action of Executive that he reasonably believes is taken in accordance
with the requirements of applicable law or administrative regulation.

 

ARTICLE IX.

NON-EXCLUSIVITY OF RIGHTS

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

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

 

ARTICLE X.

MISCELLANEOUS

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

10.2             Successors.  This Agreement shall inure to the benefit of
and be binding on the Company and its successors and assigns.  The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if 

 

29

 

no such succession had taken place.  Any successor to the business or assets of
the Company that assumes or agrees to perform this Agreement by operation of
law, contract, or otherwise shall be jointly and severally liable with the
Company under this Agreement as if such successor were the Company.

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

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

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

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

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

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

If to Executive, to Executive at his most recent home
address on file with the Company.

If to
Allstate or AIC:

The Allstate Corporation

2775 Sanders Road

Northbrook, Illinois  60062

Attention:  General Counsel

 

30

 

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

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

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

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

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

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

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

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

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

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

 

10.18.      Interpretation
to Avoid 409A Penalties.  This
Agreement is intended to comply with the provisions of Section 409A of the Code
so as to avoid the imposition of excise 

 

31

 

taxes
and penalties on the Executive under Section 409A of the Code.  The Agreement shall be interpreted, construed
and administered consistent with that intent.

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

 

32

 

[IN WITNESS
WHEREOF, Executive, Allstate and AIC have executed this Change of Control
Employment Agreement as of the date first above written.]6

 

[IN WITNESS WHEREOF,
Executive, Allstate and AIC have executed this Amended and Restated Change of
Control Employment Agreement as of
                                                                .]7

 

	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [insert
  name of Executive]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE ALLSTATE
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ALLSTATE INSURANCE
  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

 

(6)           This text is to be used in Agreements
entered into on or after November 13, 2007.

 

(7)                                  This text is to be used in Agreements
originally entered into prior to November 13, 2007, and being amended and
restated on or after this date.

 

 

 

33Exhibit 10.30

 

 

 

 

 

 

 

 

 

 

AMENDED AND RESTATED

 

CHANGE OF CONTROL EMPLOYMENT AGREEMENT

 

AMONG

 

THE ALLSTATE CORPORATION,

 

ALLSTATE INSURANCE COMPANY

 

AND

 

[NAME OF EXECUTIVE]

(Tier
Two)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  I.

  	
   

  	
  CERTAIN DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  II.

  	
   

  	
  POST-CHANGE PERIOD

  	
   

  	
  8

  
	
  2.1

  	
   

  	
  Position
  and Duties

  	
   

  	
  8

  
	
  2.2

  	
   

  	
  Compensation

  	
   

  	
  9

  
	
  2.3

  	
   

  	
  Stock
  Incentive Awards

  	
   

  	
  11

  
	
  2.4

  	
   

  	
  Unfunded
  Deferred Compensation

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  III.

  	
   

  	
  TERMINATION OF EMPLOYMENT

  	
   

  	
  12

  
	
  3.1

  	
   

  	
  Disability

  	
   

  	
  12

  
	
  3.2

  	
   

  	
  Death

  	
   

  	
  13

  
	
  3.3

  	
   

  	
  Cause

  	
   

  	
  13

  
	
  3.4

  	
   

  	
  Good
  Reason

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  IV.

  	
   

  	
  COMPANY’S OBLIGATIONS UPON A TERMINATION OF EMPLOYMENT

  	
   

  	
  16

  
	
  4.1

  	
   

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

  	
   

  	
  16

  
	
  4.2

  	
   

  	
  If
  by the Company for Cause

  	
   

  	
  19

  
	
  4.3

  	
   

  	
  If
  by Executive Other Than for Good Reason

  	
   

  	
  19

  
	
  4.4

  	
   

  	
  If
  by the Company for Disability

  	
   

  	
  19

  
	
  4.5

  	
   

  	
  If
  Upon Death

  	
   

  	
  19

  
	
  4.6

  	
   

  	
  Amount
  Contested

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  V.

  	
   

  	
  CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY

  	
   

  	
  21

  
	
  5.1

  	
   

  	
  Gross-up
  for Certain Taxes

  	
   

  	
  21

  
	
  5.2

  	
   

  	
  Determination
  by Executive

  	
   

  	
  22

  
	
  5.3

  	
   

  	
  Additional
  Gross-up Amounts

  	
   

  	
  22

  
	
  5.4

  	
   

  	
  Gross-up
  Multiple

  	
   

  	
  23

  
	
  5.5

  	
   

  	
  Opinion
  of Counsel

  	
   

  	
  23

  
	
  5.6

  	
   

  	
  Amount
  Increased or Contested

  	
   

  	
  23

  
	
  5.7

  	
   

  	
  Limitations
  on Gross-Up Payments

  	
   

  	
  25

  
	
  5.8

  	
   

  	
  Refunds

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VI.

  	
   

  	
  EXPENSES AND INTEREST

  	
   

  	
  26

  
	
  6.1

  	
   

  	
  Legal
  and Other Expenses

  	
   

  	
  26

  
	
  6.2

  	
   

  	
  Interest

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VII.

  	
   

  	
  NO SET-OFF OR MITIGATION

  	
   

  	
  27

  
	
  7.1

  	
   

  	
  No
  Set-off by Company

  	
   

  	
  27

  
	
  7.2

  	
   

  	
  No Mitigation

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

i

 

	
  ARTICLE VIII.

  	
   

  	
  RESTRICTIVE COVENANTS

  	
   

  	
  28

  
	
  8.1

  	
   

  	
  Non-Competition

  	
   

  	
  28

  
	
  8.2

  	
   

  	
  Non-Solicitation

  	
   

  	
  28

  
	
  8.3

  	
   

  	
  Reasonableness
  of Restrictive Covenants

  	
   

  	
  29

  
	
  8.4

  	
   

  	
  Right
  to Injunction; Survival of Undertakings

  	
   

  	
  29

  
	
  8.5

  	
   

  	
  Non-Disparagement

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  IX.

  	
   

  	
  NON-EXCLUSIVITY OF RIGHTS

  	
   

  	
  30

  
	
  9.1

  	
   

  	
  Waiver
  of Certain Other Rights

  	
   

  	
  30

  
	
  9.2

  	
   

  	
  Other
  Rights

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  X.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  31

  
	
  10.1

  	
   

  	
  No
  Assignability

  	
   

  	
  31

  
	
  10.2

  	
   

  	
  Successors

  	
   

  	
  31

  
	
  10.3

  	
   

  	
  Payments
  to Beneficiary

  	
   

  	
  31

  
	
  10.4

  	
   

  	
  Non-Alienation
  of Benefits

  	
   

  	
  31

  
	
  10.5

  	
   

  	
  No
  Deference

  	
   

  	
  31

  
	
  10.6

  	
   

  	
  Severability

  	
   

  	
  31

  
	
  10.7

  	
   

  	
  Amendments

  	
   

  	
  31

  
	
  10.8

  	
   

  	
  Notices

  	
   

  	
  32

  
	
  10.9

  	
   

  	
  Counterparts

  	
   

  	
  32

  
	
  10.10

  	
   

  	
  Governing
  Law

  	
   

  	
  32

  
	
  10.11

  	
   

  	
  Captions

  	
   

  	
  32

  
	
  10.12

  	
   

  	
  Number
  and Gender

  	
   

  	
  32

  
	
  10.13

  	
   

  	
  Tax
  Withholding

  	
   

  	
  32

  
	
  10.14

  	
   

  	
  No
  Waiver

  	
   

  	
  32

  
	
  10.15

  	
   

  	
  Joint
  and Several Liability

  	
   

  	
  32

  
	
  10.16

  	
   

  	
  No
  Rights Prior to Effective Date

  	
   

  	
  33

  
	
  10.17

  	
   

  	
  Six-month
  Delay

  	
   

  	
  33

  
	
  10.18

  	
   

  	
  Interpretation
  to Avoid 409A Penalties

  	
   

  	
  33

  
	
  10.19

  	
   

  	
  Entire
  Agreement

  	
   

  	
  33

  

 

 

ii

 

THE
ALLSTATE CORPORATION

 

AMENDED AND RESTATED

 

CHANGE OF CONTROL EMPLOYMENT AGREEMENT

 

                The Allstate
Corporation, a Delaware corporation (“Allstate”), Allstate Insurance
Company, an Illinois insurance company (“AIC”), and
                                              (“Executive”)
are parties to a Change of Control Employment Agreement originally entered into
on
                   (the “Agreement Date”).  To comply with the provisions of Section 409A
of the Internal Revenue Code so as to avoid the imposition of excise taxes and
penalties on the Executive under Section 409A and to amend certain provisions
of the original Agreement, this Amended and Restated Agreement is entered into,
to be effective as of December 31, 2008.

 

PURPOSES

 

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

 

 

ARTICLE
I.

CERTAIN DEFINITIONS

 

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

 

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

 

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

 

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

 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

                1.11         “Article” means an article of
this Agreement.

 

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

 

                1.13         “Beneficiary” — see Section
10.3.

 

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

 

 

2

 

 

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

 

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

 

                1.17         “CEO” means Chief Executive
Officer.

 

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

 

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

 

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

 

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

 

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

 

 

3

 

 

Notwithstanding
anything contained herein to the contrary, no transaction or event shall
constitute a Change of Control for purposes of this Agreement unless the
transaction or event constituting the Change of Control also constitutes a
change in the ownership of a corporation (as defined in Treasury Regulation
Section 1.409A-3(i)(5)(v)), a change in effective control of a corporation (as
defined in Treasury Regulation Section 1.409A-3(i)(5)(vi)) or a change in the
ownership of a substantial portion of the assets of a corporation (as defined
in Treasury Regulation Section 1.409A-3(i)(5)(vii)).

 

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

 

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

 

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

 

                1.22         “Company Counsel Opinion” — see
Section 5.5.

 

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

 

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

 

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

 

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

 

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

 

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

 

                1.26         “Disability Effective Date” — see
Section 3.1.

 

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

 

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

 

4

 

 

                1.29         “Excise Taxes” — see Section
5.1.

 

                1.30         “Executive Counsel Opinion” — see
Section 5.5.

 

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

 

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

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

 

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

 

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

 

                1.36         “including” means including
without limitation.

 

                1.37         “IRS” means the Internal Revenue
Service.

 

                1.38         “IRS Claim” — see Section 5.6.

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

 

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

 

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

 

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

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

 

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

 

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

 

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

 

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

 

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

 

6

 

 

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

 

                1.55         “Potential Parachute Payments” —
see Section 5.1.

 

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

 

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

 

                1.58         “Refund Claim” — see Section
5.6.

 

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

 

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

 

                1.61         “SEC” means the Securities and
Exchange Commission.

 

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

 

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

 

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

 

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

 

                1.66         “Surviving Corporation” means
the corporation resulting from a Reorganization Transaction or, if securities
representing at least 50% of the aggregate Voting Power of such 

 

 

7

 

resulting corporation are directly or indirectly
owned by another corporation, such other corporation.

 

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

 

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

 

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

 

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

 

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

 

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

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

 

 

ARTICLE II.

POST-CHANGE PERIOD

 

                2.1           Position and Duties.

 

                                                                (a)           During the Post-Change Period, (x)
Executive’s authority, responsibilities (not including reporting responsibili­ties),
and duties shall be at least commensurate in all material respects with the
most significant of those held, exercised and assigned at any time during the
90-day period immediately before the 

 

8

 

Effective Date and (y) Executive’s services
shall be performed at the location where Executive was employed immediate­ly
before the Effective Date or any other location which does not constitute a
material geographic change from the former location.

 

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

 

                2.2           Compensation.

 

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

 

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

 

 

9

 

                                (c)           LTIP Bonus.  The Company shall also:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

                                                                (e)           Welfare Benefit Plans.  During the Post-Change Period­, Executive and
Executive’s family shall be eligible to participate in, and receive all
benefits under, welfare 

 

 

10

 

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

 

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

 

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

 

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

 

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

 

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

 

11

 

Company, including all grants of limited stock
appreciation rights, are hereby cancelled effective as of the Agreement Date.

 

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

 

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

 

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

 

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

 

 

ARTICLE III.

TERMINATION OF EMPLOYMENT

 

                3.1           Disability.

 

                                                                (a)           During the Post-Change Period, the
Company may terminate Executive’s employment because of Executive’s Disability
by giving Executive or his legal representative, as applicable,
(i) written notice in accordance with Section 10.8 of the Company’s
intention to terminate Executive’s employment pursuant to this Section and
(ii) a certification of Executive’s Disability by a physician selected by
the Company or its insurers, subject to the consent of Executive or Executive’s
legal representa­tive, which consent shall not be unreason­ably withheld or
delayed.  Executive’s employment shall
terminate effective on the 30th day (the “Disability Effective Date”)
after Executive’s receipt of such notice unless, before the Disability
Effective Date, Executive shall have resumed the full-time performance of
Executive’s duties.

 

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

 

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

 

12

 

of such Policies in effect for peer executives at
any time during the 90-day period immediately before the Effective Date,

 

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

 

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

 

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

 

                3.3           Cause.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

                                                                                                (1)           bad judgment or negligence;

 

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

 

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

 

13

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

                                                                                (v)           In the event that the existence of
Cause shall become an issue in any action or proceeding between the Company and
Executive, the Company shall, notwith­standing the determination referenced in
clause (iv) of this Section 3.3(c), 

 

14

 

have the burden of establish­ing that the actions
or omissions specified in the Notice of Consideration did in fact occur and do
constitute Cause and that the Company has satisfied the procedural requirements
of this Section 3.3(c).  The satisfaction
of the Company’s burden shall require clear and convincing evidence.

 

                3.4           Good Reason.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

15

 

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

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

ARTICLE IV.

COMPANY’S OBLIGATIONS
UPON A TERMINATION OF EMPLOYMENT

 

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

 

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

 

                                                                                (i)            all Accrued Obligations;

 

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

 

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

 

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

 

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

 

 

16

 

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

 

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

 

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

 

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

 

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

 

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

 

(3)           accrued a number of years of service
(for purposes of determining the amount of such benefits, entitle6nment to
early retirement benefits, and all other purposes of such defined benefit
plans) that is two years greater than the number of years of service actually
accrued by Executive as of the Termination Date, and

 

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

 

minus

 

(ii)           the sum of (x) the Lump-Sum Values of
the Maximum Annuity benefits vested and payable (whether currently or at some
future date) to Executive under each defined benefit Plan that is qualified
under Section 401(a) of the Code and (y) the aggregate amounts simultaneously
or previously paid (whether pursuant to Section 2.4 or otherwise) to Executive
under the defined benefit Plans (whether 

 

 

17

or not qualified under Section 401(a) of the
Code) described in clause (i) of this Section 4.1(b).

 

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

 

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

 

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

 

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

 

(f)            The Company shall pay on behalf of
Executive all reasonable fees and costs charged by the outplacement firm
selected by Executive to provide outplacement services to Executive that are
incurred no later than the end of the second year following the year in which
the Termination of Employment occurs.

 

(g)           During the period of time
which Executive would be entitled to continuation coverage under a
Company-sponsored group health plan under Section 4980 of the Code or such later date as any Plan may specify, the
Company shall continue to make available to Executive and Executive’s family
welfare benefits (including medical, prescription, dental, disability, salary
continu­ance, individual life, group life, accidental death and travel accident
insurance plans and programs) that are at least as favorable as the most
favorable Plans of the Company applicable to other peer executives and their
families as of the Termination Date, but which are in no event less favorable
than the most favorable Plans of the Company applicable to other peer
executives and their families during the 90-day period immediately before the
Effective Date.  The cost of such welfare
benefits, including continuation
coverage required by Section 4980 of the Code (“COBRA”), to 

 

 

18

Executive shall not exceed the cost of such
benefits to Executive immediately before the Termination Date or, if less, the
Effective Date.  Executive’s rights under
this Section shall be co-extensive with any post-termination continuation
coverage Executive may have pursuant to applicable law, including COBRA.  Accordingly, in order to receive this
coverage, Executive shall timely elect continuation coverage under COBRA for
Executive and Executive’s covered dependents. 
Notwith­standing any of the above, such welfare benefits shall be
secondary to any similar welfare benefits provided by Executive’s subsequent
employer as provided in the Plans.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

19

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

 

4.6                                 Amount Contested.

 

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

 

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

 

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

 

(d)           If the Company shall for any reason
fail to deliver to Executive a Section 4.6 Certificate in compliance with
this Section within 30 days after the Company’s receipt of Executive’s written
demand therefor, Executive’s determination of the amount and nature of payments
or other benefits due to Executive (i) pursuant to Section 4.1 and set forth in
an Executive’s Severance Determination (as defined below) or (ii) pursuant to
Section 2.4 and set forth in an Executive’s Deferred Compensation Determination
(as defined below) shall be conclusive and binding for all purposes of this
Agreement unless the Company shall establish, by clear and convincing evidence,
that Executive’s Severance Determination or 

 

 

20

Executive’s Deferred Compensation Determination,
as applicable, is incorrect and that a different amount (which may be zero or a
positive amount) or nature of payments or other benefits is correct.  “Executive’s Severance Determination”
means an opinion of nationally recognized executive compensation counsel to the
effect that the amount and nature of severance and other benefits due to
Executive pursuant to Section 4.1 is the amount and nature that a court of
competent jurisdiction, based on a final judgment not subject to further
appeal, is most likely to decide to have been calculated in accordance with
this Agreement and applicable law.  “Executive’s
Deferred Compensation Determination” means an opinion of nationally
recognized executive compensation counsel to the effect that the amount of
payments due to Executive pursuant to Section 2.4 is the amount that a court of
competent jurisdiction, based on a final judgment not subject to further
appeal, is most likely to decide to have been calculated in accordance with
this Agreement and applicable law.

 

 

ARTICLE V.

Certain Additional Payments by the Company

 

5.1           Gross-up
for Certain Taxes.

 

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

 

(i)            the amount of such Excise Taxes

 

multiplied by

 

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

 

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

 

(b)           The determination of Allstate’s
independent auditors described in Section 5.1(a), including the detailed
calculations of the amounts of the Potential Parachute 

 

 

21

Payments, Excise Taxes and Gross-Up Payment and
the assumptions relating thereto, shall be set forth in a written certificate
of such auditors (the “Company Certificate”) delivered to
Executive.  Executive or the Company may
at any time request the preparation and delivery to Executive of a Company
Certificate.  The Company shall cause the
Company Certificate to be delivered to Executive as soon as reasonably possible
after such request.

 

5.2           Determination
by Executive.

 

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

 

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

 

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

 

 

22

subject to Sections 5.6 and 5.7, pay Executive
within 30 days after the determination, an amount (which shall also be deemed a
Gross-Up Payment) equal to the product of:

 

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

 

multiplied by

 

(b)           the Gross-Up Multiple.

 

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

 

5.5           Opinion
of Counsel.  “Executive Counsel
Opinion” means an opinion of nationally recognized executive compensation
counsel to the effect (i) that the amount of the Gross-Up Payment determined by
Executive pursuant to Section 5.2 is the amount that a court of competent
jurisdiction, based on a final judgment not subject to further appeal, is most
likely to decide to have been calculated in accordance with this Article and
applicable law and (ii) if the Company has previously delivered a Company
Certificate to Executive, that there is no reasonable basis or no substantial
authority for the calculation of the Gross-Up Payment set forth in the Company
Certificate. “Company Counsel Opinion” means an opinion of nationally
recognized executive compensation counsel to the effect that (i) the amount of
the Gross-Up Payment set forth in the Company Certificate is the amount that a
court of competent jurisdiction, based on a final judgment not subject to
further appeal, is most likely to decide to have been calculated in accordance
with this Article and applicable law and (ii) for purposes of Section 6662 of
the Code, Executive has substantial authority to report on his federal income
tax return the amount of Excise Taxes set forth in the Company Certificate.

 

5.6           Amount
Increased or Contested.

 

(a)           Executive shall notify the Company in
writing (an “Executive’s Notice”) of any claim by the IRS or other
taxing authority (an “IRS Claim”) that, if successful, would require the
payment by Executive of Excise Taxes in respect of Potential Parachute Payments
in an amount in excess of the amount of such Excise Taxes determined in
accordance with Section 5.1 or 5.2, as applicable.  Executive’s Notice shall include the nature
and amount of such IRS Claim, the date on which such IRS Claim is due to be
paid (the “IRS Claim Deadline), and a copy of all notices and other
documents or correspondence received by Executive in respect of such IRS
Claim.  Executive shall give the
Executive’s Notice as 

 

 

23

soon as practicable, but no later than the
earlier of (i) 10 business days after Executive first obtains actual knowledge
of such IRS Claim or (ii) five business days before the IRS Claim Deadline;
provided, however, that any failure to give such Executive’s Notice shall
affect the Company’s obligations under this Article only to the extent that the
Company is actually prejudiced by such failure. 
If at least one business day before the IRS Claim Deadline the Company
shall:

 

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

 

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

 

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

 

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

 

(b)           At any time after the payment by
Executive of any amount of Excise Taxes or related interest or penalties in
respect of Potential Parachute Payments (whether or not such amount was based
on a Company Certificate, an Executive’s Gross-Up Determination or an IRS
Claim), the Company may in its discretion require Executive to pursue a claim
for a refund (a “Refund Claim”) of all or any portion of such Excise
Taxes, interest or penalties as the Company may specify by written notice to
Executive.

 

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

 

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

 

(ii)           take such action in connection with
such IRS Claim or Refund Claim (as applicable) as the Company reasonably
requests in writing from time to time, including accepting legal representation
with respect thereto by an attorney selected 

 

 

24

by the Company, subject to the approval of
Executive (which approval shall not be unreasonably withheld or delayed),

 

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

 

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

 

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

 

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

 

(d)           The Company may at any time in its
discretion direct Executive to (i) contest the IRS Claim in any lawful manner
or (ii) pay the amount specified in an IRS Claim and pursue a Refund Claim;
provided, however, that if the Company directs Executive to pay an IRS Claim
and pursue a Refund Claim, the Company shall advance the amount of such payment
to Executive on an interest-free basis and shall indemnify Executive, on
an after-tax basis, for any Taxes, Excise Taxes and related interest or
penalties imposed with respect to such advance.

 

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

 

5.7           Limitations
on Gross-Up Payments.

 

(a)           Notwithstanding any other provision
of this Arti­cle V, if the aggregate After-Tax Amount (as defined below) of the
Potential Parachute Payments and Gross-Up Payment that, but for this Section
5.7, would be payable to Executive, does not exceed 110% of 

 

 

25

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

 

(b)           For purposes of this Agreement:

 

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

 

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

 

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

 

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

 

 

ARTICLE VI.

Expenses and Interest

 

6.1           Legal
and Other Expenses.

 

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

 

 

26

regardless of the outcome of such effort, pay or
reimburse Executive for such Legal and Other Expenses in accordance with
Section 6.1(b).

 

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

 

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

 

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

 

 

ARTICLE VII.

No Set-off or Mitigation

 

7.1           No
Set-off by Company.  Executive’s
right to receive when due the payments and other benefits provided for under
this Agreement is absolute, unconditional and subject to no set-off, counterclaim
or legal or equitable defense.  Time is
of the essence in the performance by the Company of its obligations under this
Agreement.  Any claim that the Company
may have against Executive, whether for a breach of this Agreement or otherwise,
shall be brought in a separate action or proceeding and not as part of any
action or proceeding brought by Executive to enforce any rights against the
Company under this Agreement, except if (i) the Company’s claim is
determined by a court to be a compulsory counterclaim under applicable law or
(ii) if a court determines that the Company would otherwise be materially
prejudiced if its claim were to be brought in a separate action.

 

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

 

 

27

 

ARTICLE VIII.

Restrictive Covenants

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

28

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

 

8.3           Reasonableness
of Restrictive Covenants.

 

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

 

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

 

8.4           Right
to Injunction; Survival of Undertakings.

 

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

 

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

 

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

 

29

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

 

ARTICLE IX.

Non-Exclusivity of Rights

 

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

 

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

 

 

30

ARTICLE X.

Miscellaneous

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

31

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

 

	
   

  	
   

  	
  If to Executive, to Executive at his most
  recent home address on file with the Company.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If to Allstate or AIC:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Allstate Corporation

  
	
   

  	
   

  	
  2775 Sanders Road

  
	
   

  	
   

  	
  Northbrook, Illinois 60062

  
	
   

  	
   

  	
  Attention: General Counsel

  

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

32

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

 

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

 

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

 

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

 

 

33

IN WITNESS WHEREOF, Executive, Allstate and AIC
have executed this Amended and Restated Change of Control Employment Agreement
as of December 31, 2008.

 

 

	
   

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Name of Executive]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE ALLSTATE CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ALLSTATE INSURANCE COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
							

 

 

34

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]