Allstate (ALL)

LONG-TERM CASH INCENTIVE AWARDS, 2005-2007 CYCLE
PERFORMANCE MEASURES, WEIGHTING, AND TARGET GOALS⁽¹⁾

(1)

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.

(2)

Same weight applied for all named executives.

(3)

Stated as a percentage of target goals with a range from 0% to 300%, the actual performance comprises 200% for the average adjusted return on equity measure, 0% for the Allstate Protection measure and 0% for the Allstate Financial measure. The weighted results for all three measures stated as a percentage of the target goals for all the named executives was 100%.

        The target goal for the average adjusted return on equity was set at a level representing average projected industry performance. The target goals for Allstate Protection growth in policies in force over the 3-year cycle and Allstate Financial growth in retail premiums and deposits over the 3-year cycle were based on evaluations of our historical performance and plans to drive projected performance.

        The average adjusted return on equity measure compares Allstate's performance to the peer insurance companies listed on page 28. Allstate's ranked position relative to this peer group determines the percentage of the total target award for this performance measure to be paid, as indicated in the following table. However, no payment is made unless the average adjusted return on equity exceeds the average risk free rate of return on three-year Treasury notes over the three-year cycle, plus 200 basis points, regardless of Allstate's standing compared to the peer group. For the 2005-2007 cycle, we achieved the 4^th position and exceeded the target level of performance. In addition, the average adjusted return on equity exceeded the average risk free rate of return by 1,526 basis points.

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