Allstate 2014 Annual Report Download - page 60

9MAR201204034531
Executive Compensation — Tables
Performance Stock Awards Under our stockholder-approved equity incentive plan,
the exercise price cannot be less than the closing price
PSAs represent our promise to transfer shares of of a share on the grant date. Stock option repricing is
common stock in the future if certain performance not permitted. In other words, without an event such
measures are met. Each PSA represents Allstate’s as a stock split, if the committee cancels an award
promise to transfer one fully vested share in the future and substitutes a new award, the exercise price of the
for each PSA that vests. Earned PSAs will vest new award cannot be less than the exercise price of
following the end of the three-year performance cycle, the cancelled award.
subject to continued employment (other than in the
event of death, disability, retirement, or a qualifying All stock option awards have been made in the form
termination following a change in control). Vested of non-qualified stock options. The options granted to
PSAs will be converted into shares of Allstate common the named executives in 2014 become exercisable
stock and dividend equivalents accrued on these over three years. One-third of the stock options will
shares will be paid in cash. No dividend equivalents become exercisable on the anniversary of the grant
will be paid prior to vesting. date for each of the three years. The options granted
to the named executives prior to 2014 become
Stock Options exercisable over four years: 50% on the second
anniversary of the grant date and 25% on each of the
Stock options represent an opportunity to buy shares third and fourth anniversary dates. The change to the
of our stock at a fixed exercise price at a future date. vesting schedule in 2014 was made to reflect current
We use them to align the interests of our executives market practice. All of the options expire in ten years
with long-term stockholder value, as the stock price from the grant date, unless an earlier date has been
must appreciate from the grant date for the executives approved by the committee in connection with certain
to profit. change-in-control situations or other special
circumstances such as termination, death, or disability.
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