Allstate 2008 Annual Report Download - page 88

Appendix B
The Annual Executive Incentive Plan
1. Purposes.
The purpose of the Plan is to enhance the Company’s ability to attract and retain highly qualified executives,
link compensation with the Company’s annual financial goals, and provide such executives with cash incentive
compensation to promote the success of the Company and its Subsidiaries. The Plan is intended to permit the
granting of Awards that will constitute ‘‘performance-based compensation’’ under Section 162(m) of the Code and
the regulations promulgated thereunder.
2. Definitions.
The following terms when used in the Plan shall, for the purposes of the Plan, have the following meanings:
a. ‘‘Award’’ means the cash amount payable to a Participant for a Fiscal Year pursuant to the terms of
the Plan.
b. ‘‘Board’’ means the Board of Directors of The Allstate Corporation.
c. ‘‘Business Unit’’ means any operating unit of The Allstate Corporation or any of its Subsidiaries,
including but not limited to, the property and casualty business, the life business, the investments business,
or the international business.
d. ‘‘Code’’ means the Internal Revenue Code of 1986, as amended.
e. ‘‘Committee’’ means the committee designated pursuant to Section 3 that administers the Plan.
f. ‘‘Company’’ means The Allstate Corporation.
g. ‘‘Covered Employee’’ shall have the meaning set forth in Section 4.b.
h. ‘‘Fiscal Year’’ means the calendar year.
i. ‘‘Participant’’ means each employee of the Company or a Subsidiary who is selected by the
Committee to be a participant in the Plan.
j. ‘‘Performance Measures’’ means one or more of the following measures of performance: sales,
revenues, premiums, financial product sales, earnings per share, stockholder return and/or value, funds from
operations, operating income, gross income, net income, combined ratio, underwriting income, cash flow,
return on equity, return on capital, return on assets, values of assets, market share, net earnings, earnings
before interest, operating ratios, stock price, customer satisfaction, customer retention, customer loyalty,
strategic business criteria based on meeting specified revenue goals, market penetration goals, investment
performance goals, business expansion goals or cost targets, accomplishment of mergers, acquisitions,
dispositions or similar extraordinary business transactions, profit returns and margins, financial return ratios,
market performance and/or risk-based capital goals or returns. Performance Measures may be based solely
on a corporate, Subsidiary, Business Unit or other grouping basis, or a combination thereof. Performance
Measures may reflect absolute entity performance or a relative comparison of entity performance to the
performance of a peer group of entities or other external measure.
k. ‘‘Plan’’ means the Annual Executive Incentive Plan, as may be amended from time to time.
l. ‘‘Qualified Performance-Based Award’’ means any Award or portion of an Award that is intended to
qualify as performance-based compensation under Section 162(m) of the Code.
m. ‘‘Person’’ means any individual, sole proprietorship, partnership, joint venture, limited liability
company, trust, unincorporated organization, association, corporation, institution, public benefit corporation,
entity or government instrumentality, division, agency, body or department.
n. ‘‘Retirement’’ shall have the meaning given to it by the Company or the Subsidiary with which the
Participant is employed on the date of termination of employment, provided that such termination of
employment is voluntary and occurs on or after the date the Participant attains age fifty-five (55) with twenty
(20) years of service.
B-1
Proxy Statement