2018 Annual Meeting of Stockholders

Potential Payments as a Result of Termination or Change in Control (CIC)

The following table lists the compensation and benefits that Allstate would generally provide to the named executives in various scenarios involving a termination of employment, other than compensation and benefits generally available to salaried employees. The table describes equity granting practices for the 2017 equity incentive awards. Relevant prior practices are described in the footnotes.

  Termination Scenarios
Compensation
Elements
Termination(1) Retirement Termination due to
Change-in-Control(2)
Death Disability
Base Salary Ceases
immediately
Ceases
immediately
Ceases
immediately
Ceases
immediately
Ceases
immediately
Severance Pay None None Lump sum equal to two times salary and annual incentive at target, except for CEO, who receives three times salary and annual incentive at target(3) None None
Annual Incentive(4) Forfeited Prorated for the year and subject to discretionary adjustments(5) Prorated at target (reduced by any amounts actually paid) Prorated for the year and subject to discretionary adjustments Prorated for the year and subject to discretionary adjustments
Stock Options(4)(6) Unvested are forfeited, vested expire at the earlier of three months or normal expiration Awards granted more than 12 months before, and pro rata portion of award granted within 12 months of retirement, continue to vest. All expire at earlier of five years or normal expiration(7) Awards vest upon qualifying termination after a CIC Awards vest immediately and expire at earlier of two years or normal expiration Awards vest immediately and expire at earlier of two years or normal expiration
Restricted Stock Units(4)(6) Forfeited Awards granted more than 12 months before, and pro rata portion of award granted within 12 months of retirement, continue to vest(7) Awards vest upon qualifying termination after a CIC Awards vest and are payable immediately Awards vest and are payable immediately
Performance Stock Awards(4)(6) Forfeited Awards granted more than 12 months before, and pro rata portion of awards granted within 12 months of retirement, continue to vest and are paid out based on actual performance(7) Awards vest based on performance upon a qualifying termination after a CIC(8) Awards vest and are payable immediately(9) Awards vest and are payable immediately(9)
Non-Qualified Pension Benefits(10) Distributions commence per plan Distributions commence per plan Immediately payable upon a CIC Distributions commence per plan Participant may request payment if age 50 or older
Deferred Compensation(11) Distributions commence per participant election Distributions commence per participant election Immediately payable upon a CIC Payable within 90 days Distributions commence per participant election
Health, Welfare and Other Benefits None None Outplacement services provided; lump sum payment equal to additional cost of welfare benefits continuation coverage for 18 months(12) None Supplemental Long Term Disability benefits if enrolled in basic long-term disability plan
  1. Includes both voluntary and involuntary termination. Examples of involuntary termination independent of a change in control include performance-related terminations; terminations for employee dishonesty and violation of Allstate rules, regulations, or policies; and terminations resulting from lack of work, rearrangement of work, or reduction in force.

  2. In general, a change in control is one or more of the following events: (1) any person acquires 30% or more of the combined voting power of Allstate common stock within a 12-month period; (2) any person acquires more than 50% of the combined voting power of Allstate common stock; (3) certain changes are made to the composition of the Board; or (4) the consummation of a merger, reorganization, or similar transaction. These triggers were selected because any of these could cause a substantial change in management in a widely held company the size of Allstate. Effective upon a change in control, the named executives become subject to covenants prohibiting solicitation of employees, customers, and suppliers until one year after termination of employment. If a named executive incurs legal fees or other expenses in an effort to enforce the change-in-control plan, Allstate will reimburse the named executive for these expenses unless it is established by a court that the named executive had no reasonable basis for the claim or acted in bad faith.

  3. Under the change-in-control plan, severance benefits would be payable if a named executive’s employment is terminated either by Allstate without cause or by the executive for good reason as defined in the plan during the two years following the change in control. Cause means the named executive has been convicted of a felony or other crime involving fraud or dishonesty, has willfully or intentionally breached the restrictive covenants in the change-in-control plan, has habitually neglected his or her duties, or has engaged in willful or reckless material misconduct in the performance of his or her duties. Good reason includes a material diminution in a named executive’s base compensation, authority, duties, or responsibilities, or a material change in the geographic location where the named executive performs services.

  4. Named executives who receive an equity award or an annual cash incentive award after May 19, 2009, are subject to a non-solicitation covenant while they are employed and for the one-year period following termination of employment. If a named executive violates the non-solicitation covenant, to the extent permitted by applicable law, compensation provided to the named executive (including cancellation of outstanding awards or recovery of all or a portion of any gain realized upon vesting, settlement, or exercise of an award or recovery of all or a portion of any proceeds resulting from any disposition of shares received pursuant to an award) may be recovered if the vesting, settlement, or exercise of the award or the receipt of the sale proceeds occurred during the 12-month period prior to the violation.

  5. Retirement for purposes of the Annual Executive Incentive Plan is defined as voluntary termination on or after the date the named executive attains age 55 with at least 10 years of service or age 60 with five years of service.

  6. Named executives who receive an equity award on or after May 21, 2013, that remains subject to a period of restriction or other performance or vesting condition are subject to a non-compete provision while they are employed and for the one-year period following termination of employment. Named executives who received equity awards granted between February 21, 2012, and May 20, 2013, are subject to a non-compete provision while they are employed and for the two-year period following termination of employment. If a named executive violates the non-competition covenant, to the extent permitted by applicable law, any or all of the named executive’s outstanding awards that remain subject to a period of restriction or other performance or vesting condition as of the date on which the named executive first violated the non-competition provision may be canceled.

  7. Retirement definitions and treatment for purposes of stock options, restricted stock units, and performance stock awards are as follows:

      Date of award on or after February 21, 2012
    Definition Normal Retirement-age 55 with 10 years of service or age 60 with at least five years of service
    Treatment
    • Unvested awards not granted within 12 months of retirement continue to vest.
    • Prorated portion of unvested awards granted within 12 months of the retirement date continue to vest.
    • Vested stock options expire at the earlier of five years from the date of retirement or the expiration date of the option.

    Stock option awards granted in 2012 and before have vested and will expire at the earlier of five years from the date of retirement or the expiration date of the option.

  8. The committee will determine the number of PSAs that continue to vest based on actual performance up to the change in control.

  9. For open cycles, the payout is based on the target number of PSAs.

  10. See the Retirement Benefits section for further detail on non-qualified pension benefits and timing of payments.

  11. See the Non-Qualified Deferred Compensation at Fiscal Year-end 2017 section for additional information on the Deferred Compensation Plan and distribution options available.

  12. If a named executive’s employment is terminated due to death during the two years after the date of a change in control, the named executive’s estate or beneficiary will be entitled to survivor and other benefits, including retiree medical coverage, if eligible, that are not less favorable than the most favorable benefits available to the estates or surviving families of peer executives of Allstate. In the event of termination due to disability during the two years after the date of a change in control, Allstate will pay disability and other benefits, including supplemental long-term disability benefits and retiree medical coverage, if eligible, that are not less favorable than the most favorable benefits available to disabled peer executives.