Allstate 2014 Annual Report Download - page 68

9MAR201204034531
Executive Compensation — Tables
(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, the Board or a
committee of the Board, to the extent permitted by applicable law, may recover 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 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, the Board or a committee of the Board may, to the extent
permitted by applicable law, cancel 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.
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