This excerpt taken from the ALL DEF 14A filed Mar 27, 2006.
New Plan Benefits.
It is not possible at this time to determine the benefits or amounts of awards that will be made in the future under the plan. However, subject to stockholder approval of the new plan and consistent with past practices under the current plan, the Board at this time intends to provide each Non-Employee Director with equity compensation for 2006 consisting of an award on June 1, 2006 of a stock option,
with a ten-year option term, to purchase 4,000 shares of common stock with an option exercise price equal to the fair market value of a share of common stock on the grant date and an award on December 1, 2006 of 2,000 restricted stock units.
The table below sets forth the awards that will be received by the Company's Non-Employee Directors as a group during 2006 under the plan if the plan is approved and the Board proceeds with its planned awards. No other groups, such as executive officers or employees, are eligible to receive awards under the plan.
The Board unanimously recommends that stockholders vote for the approval of The Allstate Corporation 2006 Equity Compensation Plan for Non-Employee Directors. The text of the entire plan is set forth in Appendix D.
The Massachusetts Laborers' Pension Fund, 14 New England Executive Park, Suite 200, P.O. Box 4000, Burlington, Massachusetts, 01803, registered owner of 6,460 shares of Allstate common stock as of October 20, 2005, intends to propose the following resolution at the Annual Meeting.
Resolved: That the shareholders of Allstate Insurance ("Company") hereby request that the Board of Directors initiate the appropriate process to amend the Company's governance documents (certificate of incorporation or bylaws) to provide that director nominees shall be elected by the affirmative vote of the majority of votes cast at an annual meeting of shareholders.
Supporting Statement: Our Company is incorporated in Delaware. Delaware law provides that a company's certificate of incorporation or bylaws may specify the number of votes that shall be necessary for the transaction of any business, including the election of directors. (DGCL, Title 8, Chapter 1, Subchapter VII, Section 216). The law provides that if the level of voting support necessary for a specific action is not specified in a corporation's certificate or bylaws, directors "shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors."
Our Company presently uses the plurality vote standard to elect directors. This proposal requests that the Board initiate a change in the Company's director election vote standard to provide that nominees for the board of directors must receive a majority of the vote cast in order to be elected or re-elected to the Board.
We believe that a majority vote standard in director elections would give shareholders a meaningful role in the director election process. Under the Company's current standard, a nominee in a director election can be elected with as little as a single affirmative vote, even if a substantial majority of the votes cast are "withheld" from that nominee. The majority vote standard would require that a director receive a majority of the votes cast in order to be elected to the Board.
The majority vote proposal received high levels of support last year, winning majority support at Advanced Micro Devices, Freeport McMoRan, Marathon Oil, Marsh and McClennan, Office Depot, Raytheon, and others. Leading proxy advisory firms recommended voting in favor of the proposal.
Some companies have adopted board governance policies requiring director nominees that fail to receive majority support from shareholders to tender their resignations to the board. We believe that these policies are inadequate for they are based on continued use of the plurality standard and would allow director nominees to be elected despite only minimal shareholder support. We contend that changing the legal standard to a majority vote is a superior solution that merits shareholder support.
Our proposal is not intended to limit the judgment of the Board in crafting the requested governance change. For instance, the Board should address the status of incumbent director nominees who fail to receive a majority vote under a majority vote standard and whether a plurality vote standard may be appropriate in director elections when the number of director nominees exceeds the available board seats.
We urge your support for this important director election reform.