Allstate (ALL)

Long-term cash incentive awards 2008-2010 cycle—estimated future payouts

        The Estimated Future Payouts Under Non-Equity Incentive Plan Awards column of the Grants of Plan-Based Awards at Fiscal Year-End 2008 table also includes the threshold, target, and maximum award opportunities for the long-term cash incentive awards for the 2008-2010 cycle. The actual amount of long-term cash incentive awards earned for the 2008-2010 cycle will be reported in the Summary Compensation Table for the fiscal year ended December 31, 2010. The actual amount of long-term cash incentive awards earned for the 2007-2009 cycle will be reported in the Summary Compensation Table for the fiscal year ended December 31, 2009. For the 2008-2010 cycle, the amount of each named executive's award is the sum of the amounts calculated using the

55

Table of Contents

following calculation for all of the long-term cash incentive performance measures. For the 2008-2010 cycle, the target award opportunities for the named executives, stated as a percentage of salary, are as follows: Mr. Wilson—140% for the portion of his cycle prior to his promotion to chairman and 155% for the remainder of the cycle, Mr. Ruebenson—100%, Messrs. Civgin, Hale and Simonson—80%, Ms. Mayes—70%, and Mr. Pilch-40%.

*

Base salary in effect at the beginning of the cycle, as adjusted by any promotional increases granted during the course of the cycle on a prorated basis.

        The weighting for each named executive is provided below. The amount specified in the Grants of Plan Based Awards Table as the threshold, target, and maximum long-term cash incentive award for each named executive is the amount that will be earned if Allstate achieves the threshold, target, and maximum goals, respectively, on all of the performance measures.

        The performance measures, weighting, and goals for the 2008-2010 cycle are set forth in the following table. A description of each performance measure is provided under the "Performance Measures" caption at the end of this CD&A.

LONG-TERM CASH INCENTIVE AWARDS, 2008-2010 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.

        For the return on equity measure, Allstate's performance will be ranked relative to the peer insurance companies listed on page 38 as indicated in the following table. However, for the 2008-2010 cycle, Cincinnati Financial Corporation and Safeco Corporation were excluded. Cincinnati Financial Corporation was excluded because it pursues a buy-and-hold equity investment strategy different than the other peers that has resulted in a significant build up of unrealized capital gains in its equity portfolio, which impacts its adjusted return on equity making it less comparable to Allstate's performance, and Safeco Corporation was excluded due to its acquisition by the Liberty Mutual Group in 2008.

AVERAGE ADJUSTED RETURN ON EQUITY RELATIVE
TO PEER GROUP, 2008-2010 CYCLE

56

Table of Contents