Allstate 2008 Annual Report Download - page 73

(5) If the named executive’s termination of employment is for any reason other than death, disability, or retirement, unvested stock
options will be forfeited, and stock options, to the extent they are vested on the date of termination, may be exercised at any time on
or before the earlier to occur of (a) the expiration date of the stock option and (b) three months after the date of termination.
(6) If the named executive’s termination of employment is on account of death or disability, then stock options, to the extent not vested,
will vest and may be exercised at any time on or before the earlier to occur of (1) the expiration date of the option and (2) the
second anniversary of the date of termination of employment. Stock option values are based on a December 31, 2008 market close
price of $32.76 per share of Allstate stock.
(7) The present value of the non-qualified pension benefits for Mr. Wilson earned through December 31, 2008, based on a 7.5% discount
rate is disclosed in the Pension Benefits table. The present value of Mr. Wilson’s non-qualified pension benefits (SRIP), $4,132,986,
earned through December 31, 2008 is based on the lump sum methodology (i.e., interest rate and mortality table) used by the Allstate
pension plans in 2009, as required under the Pension Protection Act. Specifically, the interest rate for 2009 is based on 60% of the
average August 30-year Treasury Bond rate from the prior year, and 40% of the average corporate bond segmented yield curve from
August of the prior year. The mortality table for 2009 is the 2009 combined static Pension Protection Act funding mortality table with a
blend of 50% males and 50% females, as published by the IRS. The benefits earned under the SRIP would be payable upon reaching
age 65 if termination is a result of a voluntary termination, involuntary termination or retirement. Mr. Wilson will turn 65 on
October 15, 2022. SRIP benefits would become payable immediately upon death or upon reaching age 50 if disabled.
(8) The named executives are eligible to participate in Allstate’s supplemental long-term disability plan for employees whose annual
earnings exceed the level which produces the maximum monthly benefit provided by the Allstate Long Term Disability Plan (Basic
Plan). The benefit is equal to 50% of the named executive’s qualified annual earnings divided by twelve and rounded to the nearest
one hundred dollars, reduced by $7,500, which is the maximum monthly benefit payment that can be received under the Basic Plan.
The amount reflected assumes the named executive remains totally disabled until age 65 and represents the present value of the
monthly benefit payable until age 65.
(9) In the event of employment termination resulting from a lack of work, rearrangement of work, or reduction in workforce, the named
executives would be eligible for a lump sum payment equal to two weeks of pay for each complete year of service, up to a maximum
of 52 weeks of pay. Mr. Civgin is eligible for the minimum benefit under the plan of two weeks of pay.
(10) If the named executive retires at the normal retirement date or a health retirement date, unvested stock options continue to vest in
accordance with their terms, and all outstanding stock options, when vested, may be exercised, in whole or in part, by the named
executive at any time on or before the earlier to occur of (a) the expiration date of the stock option and (b) the fifth anniversary of
the date of such termination of employment. The ‘‘normal retirement date’’ under the stock option awards is the date on or after the
date the named executive attains age 60 with at least one year of service. The ‘‘health retirement date’’ is the date on which the
named executive terminates for health reasons after attaining age 50, but before attaining age 60, with at least ten years of
continuous service. If the named executive retires at the early retirement date, unvested stock options are forfeited, and stock options,
to the extent they are vested on the date of termination, may be exercised, in whole or in part, by the named executive at any time on
or before the earlier to occur of (a) the expiration date of the stock option and (b) the fifth anniversary of the date of termination of
employment. The ‘‘early retirement date’’ is the date the named executive attains age 55 with 20 years of service. The aggregate value
of unexercisable in-the-money options as of December 31, 2008 based on a market close price of $32.76 per share of Allstate stock
for each of the named executives is reflected in the table. The actual amount received by the named executives would be based on
the market close price on the date the stock options were exercised.
(11) If the named executive retires on or after attaining age 60 with at least one year of service, then no unvested restricted shares or
restricted stock units are forfeited and the unvested shares or restricted stock units will remain subject to the restriction period
established in the award agreement. If the named executive dies following retirement and before the end of the restriction period,
then all unvested restricted stock units immediately become nonforfeitable and vest as of the date of death. The aggregate value of
unvested restricted shares or restricted stock units as of December 31, 2008 based on a market close price of $32.76 per share of
Allstate stock for each of the named executives is reflected in the table. The actual amount received by the named executives would
be based on the market close price on the date the stock restriction lapses.
(12) If the named executive’s termination of employment is a result of death, restricted stock units granted in February, 2006, 2007, and
2008 immediately become nonforfeitable and the restrictions expire. The December 31, 2008 market close price of $32.76 per share of
Allstate stock was used to value the unvested and nonforfeitable awards.
(13) Mr. Civgin was not a member of the ARP or SRIP as of December 31, 2008.
(14) The present value of the non-qualified pension benefits for Ms. Mayes earned through December 31, 2008, based on a 7.5% discount
rate is disclosed in the Pension Benefits Table. The present value of Ms. Mayes’ non-qualified pension benefits earned through
December 31, 2008 is $69,764 ($3,150 SRIP benefit, plus a $66,614 pension benefit enhancement). Ms. Mayes’ pension benefit
enhancement is payable 6 months after separation from service under each of the employment termination scenarios. The benefits
earned under the SRIP would be payable upon reaching age 65, and, if vested, upon earlier voluntary termination, involuntary
termination or retirement. Ms. Mayes will turn 65 on July 9, 2014. SRIP benefits would become payable immediately upon death.
(15) The present value of the non-qualified pension benefits for Mr. Ruebenson earned through December 31, 2008, based on a 7.5%
discount rate is disclosed in the Pension Benefits table. The present value of Mr. Ruebenson’s non-qualified pension benefits (SRIP),
$5,169,790, earned through December 31, 2008 is based on the lump sum methodology (i.e., interest rate and mortality table) used by
the Allstate pension plans in 2009, as required under the Pension Protection Act. Specifically, the interest rate for 2009 is based on
60% of the average August 30-year Treasury Bond rate from the prior year, and 40% of the average corporate bond segmented yield
curve from August of the prior year. The mortality table for 2009 is the 2009 combined static Pension Protection Act funding mortality
table with a blend of 50% males and 50% females, as published by the IRS. The benefits earned under the SRIP would be payable
upon reaching age 65 and if termination is a result of a voluntary termination, involuntary termination or retirement. Mr. Ruebenson
will turn 65 on May 31, 2013. SRIP benefits would become payable immediately upon death or disability.
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Proxy Statement