Allstate (ALL)

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Table of Contents

(6)

Within five business days after the effective date of a change-in-control, the named executives will receive a lump sum payment equal to the present value of the named executive's SRIP benefit, pension benefit enhancement, if applicable, and deferred compensation account balance. The present value of non-qualified pension benefits 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. Refer to the Retirement Benefits section beginning on page 60 for a discussion of the SRIP benefit and pension benefit enhancement. See the Potential Payments Upon Termination table and the corresponding footnotes on pages 65-67 for a breakdown of the present value of the SRIP and pension benefit enhancements for Ms. Mayes. See the Non-Qualified Deferred Compensation at Fiscal Year-End 2008 table on page 63 for additional information on the Deferred Compensation Plan and information regarding the named executive's account balances as of December 31, 2008.

(7)

For purposes of this table, the present value of non-qualified pension benefits earned through December 31, 2008 and the named executive's Deferred Compensation Plan account balance, if any, which would have been immediately payable upon a change-in-control regardless of termination of employment were assumed to have been paid immediately prior to termination upon the effective date of a change of control and are reflected in the "Immediately Payable Upon Change-in-Control" row.

(8)

The Welfare Benefits and Outplacement Services amount includes the cost to provide certain welfare benefits to the named executive and family during the period which the named executive is eligible for continuation coverage under applicable law. The amount shown reflects Allstate's costs for these benefits or programs assuming an 18-month continuation period.

(9)

Certain payments made as a result of a change in control are subject to a 20% excise tax imposed on the named executive by Section 4999 of the Code. The Excise Tax Reimbursement and Tax Gross-up is the amount Allstate would pay to the named executive as reimbursement for the 20% excise tax plus a tax gross-up for any taxes incurred by the named executive resulting from the reimbursement of such excise tax. The estimated amounts of reimbursement of any resulting excise taxes were determined without regard to the effect that restrictive covenants and any other facts and circumstances may have on the amount of excise taxes, if any, that ultimately might be payable in the event these payments were made to a named executive which is not subject to reliable advance prediction or a reasonable estimate.

Performance Measures

        Information regarding our performance measures is disclosed in the limited context of our annual and long-term cash incentive awards and should not be understood to be statements of management's expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.

        The following are descriptions of the performance measures used for our annual cash incentive awards for 2008 and our long-term cash incentive awards for the 2006-2008 and 2008-2010 cycles.

        These measures are not GAAP measures. They were developed uniquely for incentive compensation purposes and are not reported items in our financial statements. Some of these measures use non-GAAP measures and operating measures. The Compensation and Succession Committee has approved the use of non-GAAP and operating measures when appropriate to drive executive focus on particular strategic, operational, or financial factors or to exclude factors over which our executives have little influence or control, such as capital market conditions.

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(3)

This amount reflects:

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three times the named executive's base salary;

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three times the named executive's annual cash incentive award calculated at target;

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the named executive's pro-rata long-term cash incentive award for the 2006-2008 and 2007-2009 performance cycles calculated at target;

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three times the average of the annualized long-term incentive award for the 2006-2008 and 2007-2009 performance cycles calculated at target; and

•

a lump sum payment equal to the positive difference, if any, between: (a) the sum of the lump-sum values of each maximum annuity that would be payable to the named executive under any defined benefit plan (whether or not qualified under Section 401(a) of the Internal Revenue Code) if the named executive had: (i) become fully vested in all such benefits, (ii) attained as of the named executive's termination date an age that is three years greater than named executive's actual age, (iii) accrued a number of years of service that is three years greater than the number of years of service actually accrued by the named executive as of the named executive's termination date, and (iv) received a lump-sum severance benefit consisting of three times base salary, three times annual incentive cash compensation calculated at target, plus the 2007 annual incentive cash award as covered compensation in equal monthly installments during the three-year period following the named executive's termination date and (b) the lump-sum values of the maximum annuity benefits vested and payable to named executive under each defined benefit plan that is qualified under Section 401(a) of the Internal Revenue Code plus the aggregate amounts simultaneously or previously paid to the named executive under the defined benefit plans (whether or not qualified under Section 401(a)). The calculation of the lump sum amounts payable under this formula does not impact the benefits payable under the ARP, SRIP or Mr. Liddy's pension benefit enhancement. Mr. Liddy's pension benefit enhancement, which is payable upon termination, is described in the Retirement Benefits narrative.

The change-in-control agreements provide that if the after-tax benefit of all change of control payments are less than 110% of the after-tax benefit of the safe harbor benefit amount, then the change-in-control benefits are to be reduced to the safe harbor benefit amount. The safe harbor benefit amount is the highest level of benefits that can be paid before which an excise tax under section 4999 of the Internal Revenue Code would apply. Mr. Hale's change-in-control severance benefits were reduced by $363,922 in accordance with the terms of the change-in-control agreement.

(4)

The amounts reflected in the Change-in-Control Severance and the Welfare Benefits and Outplacement Services columns for Messrs. Wilson, Ruebenson and Simonson are based on the terms of the new replacement change-in-control agreements entered into on or after February 26, 2008. The Change-in-Control Severance amount is calculated as outlined in footnote (3) but does not include a payment equal to three times the annualized long-term cash incentive award. The Welfare Benefits and Outplacement Services amount reflects the cost to provide certain welfare benefits to the named executive and his family during the period which the named executive is eligible for continuation coverage under applicable law. The amount shown reflects Allstate's costs for these benefits or programs assuming an 18-month continuation period. There are no amounts reflected for Messrs. Hale and Liddy since on February 26, 2008 they elected to terminate their change-in-control agreements effective December 31, 2007.

(5)

Stock option values are based on a December 31, 2007 market close price of $52.23 per share of Allstate stock.

(6)

For purposes of this table, unvested stock options, restricted stock and RSUs, which would have been immediately payable upon a change-in-control regardless of termination of employment, were assumed to have been paid immediately prior to termination and are reflected in the "Immediately Payable Upon Change-in-Control" row.

(7)

The December 31, 2007 market close price of $52.23 per share of Allstate stock was used to value the unvested and nonforfeitable RSU and restricted stock awards.

(8)

Within five business days after the effective date of a change-in-control that is not a merger of equals, the named executives will receive a lump sum payment equal to the present value of the named executive's SRIP benefit, pension benefit enhancement, if applicable, and deferred compensation account balance. The present value of non-qualified pension benefits earned through December 31, 2007 is based on the lump sum methodology (i.e., interest rate and mortality table) used by the Allstate pension plans in 2008, as required under the Pension Protection Act. Specifically, the interest rate for 2008 is based on 80% of the average August 30-year Treasury Bond rate from the prior year, and 20% of the average corporate bond segmented yield curve from August of the prior year. The mortality table for 2008 is the 2008 combined static Pension Protection Act funding mortality table with a blend of 50% males and 50% females, as published by the IRS. Refer to the Retirement Benefits section beginning on page 54 for a discussion of the SRIP benefit and pension benefit enhancement. See the Potential Payments Upon Termination table on pages 59-61 and the corresponding footnotes for a breakdown of the present value of the SRIP and pension benefit enhancements for Mr. Liddy. See the Non-qualified Deferred Compensation at Fiscal Year-End 2007 table on page 57 for additional information on the deferred compensation plan and information regarding the named executive's account balances as of December 31, 2007.

(9)

For purposes of this table, the present value of non-qualified pension benefits earned through December 31, 2007 and the named executive's Deferred Compensation Plan account balance, if any, which would have been immediately payable upon a change-in-control regardless of termination of employment were assumed to have been paid immediately prior to termination upon the effective date of a change of control and are reflected in the "Immediately Payable Upon Change-in-Control" row.

(10)

Allstate will continue to provide welfare benefits, including medical, dental, vision, disability, group life, accidental death, and group legal, to the named executive and his family until the third anniversary of the named executive's termination date. The amount shown reflects Allstate's costs for these benefits or programs.

(11)

Certain payments made as a result of a change in control are subject to a 20% excise tax imposed on the named executive by Section 4999 of the Code. The Excise Tax Reimbursement and Tax Gross-up is the amount Allstate would pay to the named executive as reimbursement for the 20% excise tax plus a tax gross-up for any taxes incurred by the named executive resulting from the reimbursement of such excise tax. Mr. Liddy and Mr. Hale would not be subject to the 20% excise tax since any payments made to them as a result of a change-in-control and termination of employment on December 31, 2007 would not exceed three times their average taxable compensation over the last five years (see Footnote 3 regarding the reduction in Mr. Hale's change-in-control severance benefits). The estimated amounts of reimbursement of any resulting excise taxes were determined without regard to the effect that restrictive covenants and any other facts and circumstances may have on the amount of excise taxes, if any, that ultimately might be payable in the event these payments were made to a named executive which is not subject to reliable advance prediction or a reasonable estimate.

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Sylla's

pension benefit enhancements, which are payable upon termination, are described in the Retirement Benefits narrative.

(7)

Stock option values are based on a December 29, 2006 market close price of $65.11 per share of Allstate stock.

(8)

For purposes of this table, unvested stock options, restricted stock and RSUs, which would have been immediately payable upon a change-in-control regardless of termination of employment, were assumed to have been paid immediately prior to termination and are reflected in the "Amounts Immediately Payable Upon Effective Date of Change-in-Control" column.

(9)

The December 29, 2006 market close price of $65.11 per share of Allstate stock was used to value the RSU and restricted stock value of unvested and nonforfeitable awards.

(10)

Within five business days after the effective date of a change-in-control that is not a merger of equals, the named executives will receive a lump sum payment equal to the present value of the named executive's SRIP benefit, pension benefit enhancement, if applicable, and deferred compensation account balance. The present value of non-qualified pension benefits earned through December 31, 2006 is based on a 5% lump sum factor (the lump sum interest rate used by the Allstate pension plans in 2007). Refer to the Retirement Benefits section beginning on page 38 for a discussion of the SRIP benefit and pension benefit enhancement. See the Termination of Employment tables on pages 43-44 and the corresponding footnotes for a breakdown of the present value of the SRIP and pension benefit enhancements for Messrs. Liddy and Sylla. See the Nonqualified Deferred Compensation at Fiscal Year End 2006 table on page 42 for additional information on the deferred compensation plan and information regarding the named executive's account balances as of December 31, 2006. The amounts reflected for Messrs. Hale and Simonson reflect the immediate vesting and payment of SRIP benefits.

(11)

For purposes of this table, the present value of non-qualified pension benefits earned through December 31, 2006 and the named executive's Deferred Compensation Plan account balance, if any, which would have been immediately payable upon a change-in-control regardless of termination of employment were assumed to have been paid immediately prior to termination upon the effective date of a change of control and are reflected in the "Amounts Immediately Payable Upon Effective Date of Change-in-Control" column.

(12)

Allstate will continue to provide welfare benefits, including medical, dental, vision, disability, group life, accidental death, and group legal, to the named executive and his family until the third anniversary of the named executive's termination date. The amount shown reflects Allstate's costs for these benefits or programs.

(13)

Certain payments made as a result of a change in control are subject to a 20% excise tax imposed on the named executive by Section 4999 of the Code. The Excise Tax Reimbursement and Tax Gross-up is the amount Allstate would pay to the named executive as reimbursement for the 20% excise tax plus a tax gross-up for any taxes incurred by the named executive resulting from the reimbursement of such excise tax. Messrs. Liddy and Sylla would not be subject to the 20% excise tax since any payments made to them as a result of a change in control and termination of employment on December 31, 2006 would not exceed three times their average taxable compensation over the last five years. The estimated amounts of reimbursement of any resulting excise taxes were determined without regard to the effect that restrictive covenants and any other facts and circumstances may have on the amount of excise taxes, if any, that ultimately might be payable in the event these payments were made to a named executive officer which is not subject to reliable advance prediction or a reasonable estimate.

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