Allstate 2008 Annual Report Download - page 35

the employee will recognize capital gain or loss in an amount equal to the difference between the employee’s
basis in the shares sold and the total amount realized upon disposition.
Unrestricted Stock and Restricted Stock Awards.
Generally, an employee will not have any taxable income on the grant of restricted stock, and we will not be
entitled to a deduction at the time of grant. When shares of restricted stock are no longer subject to a substantial
risk of forfeiture, the employee will recognize ordinary income in an amount equal to the fair market value of the
shares, less the amount paid, if any, for the shares. Alternatively, an employee may elect to be taxed at the time of
grant, in which case the employee will recognize ordinary income on the date of grant equal to the fair market
value of the shares on the grant date. In either case, we will generally be entitled to a deduction in an amount
equal to the ordinary income recognized by the employee. Unless the employee elects to be taxed on the date of
grant of restricted stock, any dividends paid on restricted stock are taxed as ordinary income (rather than
dividend income) to the employee and are deductible by us. If an employee elects to be taxed on the date of
grant of restricted stock, any dividends paid on the restricted stock will be taxed as dividend income, rather than
ordinary income. With respect to unrestricted stock, an employee will recognize ordinary income at the time of
grant in an amount equal to the fair market value of the stock on that date, and we will generally be entitled to a
deduction in the same amount. Compensation with respect to restricted stock and unrestricted stock is subject to
income, Social Security, and Medicare taxes. Upon the disposition of any shares acquired pursuant to an
unrestricted stock or restricted stock award, any gain or loss, based on the difference between the employee’s
basis in the shares sold and the total amount realized upon disposition, will be taxed as capital gain or loss.
Restricted Stock Units, Performance Units, and Performance Stock Awards.
An employee will not have any taxable income on the grant of restricted stock units, performance units, or
performance stock. Upon the delivery of shares or payment of cash with respect to restricted stock units,
performance units, or performance stock, the employee generally will be required to include as ordinary income in
the year of receipt an amount equal to the cash received and/or the fair market value of shares of stock received,
and we will be entitled to a deduction in an amount equal to the same amount. Compensation with respect to
restricted stock units, performance units, and performance stock is subject to income, Social Security, and
Medicare taxes. If shares of our common stock are received in settlement of any restricted stock units,
performance units, or performance stock award, then upon a subsequent disposition of such shares the employee
will recognize capital gain or loss in an amount equal to the difference between the employee’s basis in the
shares sold and the total amount realized upon disposition.
Other Information
New Plan Benefits Resulting From Amendment.
It is not possible at this time to determine the benefits or amounts of awards that will be made in the future
as a result of the increased number of shares of common stock authorized for issuance and the other revised
provisions of the Plan.
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Proxy Statement