Form of Option Award Agreement for awards granted on or after February 19, 2020, under The Allstate Corporation 2019 Equity Incentive Plan to officers subject to reporting obligations under Section 16 of the Securities Exchange Act of 1934 or an executive vice president

[Name]

In accordance with the terms of The Allstate Corporation 2019 Equity Incentive Plan (the "Plan"), pursuant to action of the Compensation and Succession Committee of the Board of Directors, The Allstate Corporation (the "Company") hereby grants to you (the "Participant"), subject to the terms and conditions set forth in this Option Award Agreement (including Annexes A and B hereto and all documents incorporated herein by reference) the right and option (the "Option") to purchase from the Company the number of shares of its common stock, par value $.01 per share, set forth below:

Type of Option Granted:     Nonqualified    

Number of Shares to

which Option Pertains:        [_________]

Date of Grant:            [_________]

(subject to Section 2 of Annex A)

THIS OPTION IS SUBJECT TO FORFEITURE AS PROVIDED IN THIS OPTION AWARD AGREEMENT AND THE PLAN.

Further terms and conditions of the Award are set forth in Annexes A and B hereto, which is an integral part of this Option Award Agreement.

All terms, provisions, and conditions applicable to the Option Award Agreement set forth in the Plan and not set forth herein are hereby incorporated by reference. To the extent any provision hereof is inconsistent with a provision of the Plan, the provision of the Plan will govern. A copy of the Plan is available at the Fidelity NetBenefits® website at www.NetBenefits.com. By accepting this Award as provided in the following sentence, the Participant hereby acknowledges the receipt of a copy of this Option Award Agreement including Annexes A and B and a copy of the Prospectus and agrees to be bound by all the terms and provisions hereof and thereof. This Award will be deemed accepted if the Participant does not decline this Award by accessing the Fidelity NetBenefits® website at www.NetBenefits.com and selecting the “Decline Grant” option for this Award within 30 days of the Date of Grant.

Attachment: Annexes A and B

                            

Further Terms and Conditions of Award. It is understood and agreed that the Award of the Option evidenced by this Option Award Agreement to which this is annexed is subject to the following additional terms and conditions:

1.    Exercise of Option. To the extent vested and subject to Section 2 below, the Option may be exercised in whole or in part from time to time by delivery of written notice (or other method acceptable to the Company) of exercise and payment to the Equity Plan Administration Office, The Allstate Corporation, 2775 Sanders Road, Ste A1E, Northbrook, Illinois 60062, unless the Company advises the Participant to send the notice and payment to a different address or a designated representative. Such notice and payment must be received not later than the Expiration Date, specifying the number of shares of Stock to be purchased. The minimum number of shares to be purchased in a partial exercise shall be the lesser of 25 shares and the number of shares remaining unexercised under this Award.

The Option Exercise Price shall be payable: (a) in cash or its equivalent, (b) by tendering previously acquired Stock (owned for at least six months) having an aggregate Fair Market Value at the time of exercise equal to the total Option Exercise Price, (c) by broker-assisted cashless exercise, (d) by share withholding, or (e) by a combination of (a), (b), (c) and/or (d).

With respect to tax withholding required upon exercise of the Option, the Participant may elect to satisfy such withholding requirements by tender of previously acquired shares of Stock or by having Stock with a Fair Market Value equal to the minimum statutory total tax which could be imposed on the transaction withheld from the shares due upon Option exercise in accordance with Article 16 of the Plan.

2.    Termination of Employment. Upon the Participant’s Termination of Employment (as defined in the Plan), the following provisions of this Section 2 shall apply.

(A)    If the Participant's Termination of Employment is on account of death or Disability, then the Option, to the extent not vested, shall vest, and the Option may be exercised, in whole or in part, by the Participant (or the Participant’s personal representative, Beneficiary, estate, or transferee, as the case may be) at any time on or before the earlier to occur of the Expiration Date and the second anniversary of the date of such Termination of Employment.

(B)    If the Participant’s Termination of Employment is on account of Retirement, to the extent the Option is vested on the date of Termination of Employment, it may be exercised, in whole or in part, by the Participant at any time on or before the earlier to occur of the Expiration Date and the fifth anniversary of the date of such Termination of Employment.

(D)    If the Termination of Employment occurs during the Post-Change Period and

(i) the Participant’s Termination of Employment is initiated by the Employer other than for Cause, death, or Disability, or

(ii) the Participant is a participant in The Allstate Corporation Change in Control Severance Plan (the “CIC Plan”) and the Participant’s Termination of Employment is initiated by the Participant for Good Reason,

the Option, to the extent not vested, shall vest and may be exercised, in whole or in part, by the Participant at any time on or before the earlier to occur of the Expiration Date and the fifth anniversary of the date of such Termination of Employment.

(E)    If the Termination of Employment occurs as a result of conduct leading to immediate termination pursuant to Company or Subsidiary policy based on:

(i)dishonesty, such as theft, fraud, embezzlement, or falsification of Company or Subsidiary documents;

(ii)conviction of, or entering of a plea of nolo contendere to, a crime that constitutes a felony;

(iii)acts of physical harm or violence to the property or assets of the Company, to any employee or customer of the Company or any Subsidiary, or to any independent contractor or service provider who provides services to the Company or any Subsidiary; or

(iv)harassment or discriminatory conduct based on sex, race, color, religion, age, disability, citizenship, national origin, sexual orientation, or status as a veteran involving any employee or customer of the Company or any Subsidiary, or any independent contractor or service provider who provides services to the Company or any Subsidiary;

then any portion of the Option that is not vested shall be forfeited, and the Option, to the extent it is vested on the date of Termination of Employment, may be exercised, in whole or in part, by the Participant at any time on or before the earlier to occur of the Expiration Date and three months after the date of such Termination of Employment.

 

A Participant whose Termination of Employment occurs as a result of conduct leading to immediate termination for the conduct outlined in this subsection 2(E), is not eligible for the post-termination equity treatment outlined in subsections 2(B) and 2(C).

(F)     If the Participant's Termination of Employment is for any other reason, including Termination of Employment for violation of the Allstate Global Code of Conduct

which results in a recovery under The Allstate Corporation Clawback Policy, any portion of the Option that is not vested shall be forfeited, and the Option, to the extent it is vested on the date of Termination of Employment, may be exercised, in whole or in part, by the Participant at any time on or before the earlier to occur of the Expiration Date and three months after the date of such Termination of Employment.

(G)     If the Participant’s Termination of Employment is on account of Retirement, or in accordance with subsection (D) above, and if the Participant dies after such Termination of Employment but before the date the Option must be exercised as set forth in subsections (C) and (D) above, any portion of the Option that is not vested, and has not been forfeited or expired in accordance with subsections (C) or (D), shall vest and the Option may be exercised, in whole or in part, by the Participant’s personal representative, Beneficiary, estate, or transferee, as the case may be, at any time on or before the earliest to occur of the Expiration Date, the second anniversary of the date of death, and the fifth anniversary of the date of such Termination of Employment. If the Participant's Termination of Employment is for any reason other than death, Disability, Retirement, or Termination of Employment described in subsection (D) above, and if the Participant dies after such Termination of Employment but before the date the Option must be exercised as set forth in subsection (E and F) above, the Option, to the extent it is vested on the date of the Participant's death, may be exercised, in whole or in part, by the Participant's personal representative, Beneficiary, estate, or transferee, as the case may be, at any time on or before the earlier to occur of the Expiration Date of the Option and three months after the date of Termination of Employment.

6.    No Limitation on Other Rights; Blue Pencil. Nothing contained in Sections 4 and 4 shall be deemed to (i) limit any additional legal or equitable rights or remedies the Company may have under applicable law with respect to any Participant who may have violated the non-solicitation or non-competition provisions in the Plan or in any other plan, policy, agreement, or arrangement or (ii) affect any other non-solicitation, non-competition, or other restrictive covenants to which a Participant is

subject. If any of the covenants contained in Sections 4 and 5 or any part thereof, are held to be unenforceable, the court making such determination shall have the power to revise or modify such provision to make it enforceable to the maximum extent permitted by applicable law and, in its revised or modified form, said provision shall then be enforceable.

7.    Transferability of Options. Except as set forth in this Section 7, the Option shall be exercisable during the Participant’s lifetime only by the Participant and may not be assigned or transferred other than by will or the laws of descent and distribution. The Option, to the extent vested, may be transferred by the Participant during his lifetime to any "Family Member." A transfer of the Option pursuant to this Section 7 may only be effected by the Company at the written request of a Participant and shall be effective only when recorded in the Company’s record of outstanding Options. Such transferred Option may not be subsequently transferred by the transferee except by will or the laws of descent and distribution. A transferred Option shall continue to be governed by and subject to the terms and limitations of the Plan and this Option Award Agreement, and the transferee shall be entitled to the same rights as the Participant, as if no transfer had taken place. In no event shall an Option be transferred for consideration.

8.    Ratification of Actions. By accepting the Award or other benefit under the Plan, the Participant and each person claiming under or through him shall be conclusively deemed to have indicated the Participant's acceptance and ratification of, and consent to, any action taken under the Plan or the Award by the Company, the Board, or the Compensation and Succession Committee.

9.    Notices. Any notice hereunder to the Company shall be addressed to its Equity Plan Administration Office, and any notice hereunder to the Participant shall be addressed to the Participant at his or her most recent home address on file with the Company, subject to the right of either party to designate at any time hereafter in writing some other address.

10.    Governing Law and Severability. To the extent not preempted by Federal law, this Option Award Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflicts of law provisions. In the event any provision of the Option Award Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Option Award Agreement, and this Option Award Agreement shall be construed and enforced as if the illegal or invalid provision had not been included.

11.    Definitions. In addition to the following definitions, capitalized terms not otherwise defined herein shall have the meanings given them in the Plan.

"Board Turnover" – see clause (c) of the definition of “Change in Control.”

“Cause” for those Participants who are not eligible to participate in the CIC Plan, means a Participant’s Termination of Employment for actions which would constitute conduct leading to immediate termination pursuant to Company policy. If a Participant is a participant in the CIC Plan, “Cause” means “Cause” as that term is defined in the CIC Plan on the Date of Grant.

 

"Change in Control" means, except as otherwise provided at the end of this definition, the occurrence of any one or more of the following:

Notwithstanding anything contained herein to the contrary: (i) no transaction or event shall constitute a Change in Control for purposes of this Agreement unless the transaction or event constituting the Change in Control also constitutes a change in the ownership of a corporation (as defined in Treasury Regulation Section 1.409A-3(i)(5)(v)), a change in effective control of a corporation (as defined in Treasury Regulation Section 1.409A-3(i)(5)(vi)) or a change in the ownership of a substantial portion of the assets of a corporation (as defined in Treasury Regulation Section 1.409A-3(i)(5)(vii)); and (ii) no sale or disposition of one or more Subsidiaries (“Sale Subsidiary”) or the assets thereof shall constitute a Change in Control for purposes of this Agreement if the investments in and advances by the Company and its Subsidiaries (other than the Sale Subsidiaries) to such Sale Subsidiary as of immediately prior to the sale or disposition determined in accordance with Generally Accepted Accounting Principles (“GAAP”) (but after intercompany eliminations and net of the effect of intercompany reinsurance) are less than 51% of the Consolidated Total Shareholders’ Equity of the Company as of immediately prior to the sale or disposition. Consolidated Total Shareholders’ Equity means, at any date, the total shareholders’ equity of the Company and its Subsidiaries at such date, as reported in the consolidated financial statements prepared in accordance with GAAP.

"Exempt Reorganization Transaction" means a Reorganization Transaction that fails to result in (a) any Person or group (as such term is defined in Treasury Regulation Section 1.409A-3(i)(5)(v)(B)) becoming a More than 30% Owner or a Majority Owner, (b) Board

Turnover, or (c) a sale or disposition to any Person or group (as such term is defined in Treasury Regulation Section 1.409A-3(i)(5)(v)(B)) of the assets of the Company that have a total Gross Fair Market Value (as defined below) equal to at least forty percent (40%) of the total Gross Fair Market Value of all of the assets of the Company immediately before such transaction.

“CIC Plan” – see subsection 2(D).

“Good Reason” means “Good Reason” as that term is defined in the CIC Plan on the Date of Grant.

"Gross Fair Market Value" means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

"Majority Owner" – see clause (b) of the definition of “Change in Control.”

"More than 30% Owner" – see clause (a) of the definition of “Change in Control.”

“Post-Change Period” means the period commencing on the date on which a Change in Control first occurs and ending on the earlier of (a) the second anniversary of the date on which a Change in Control first occurs, and (b) the Expiration Date.

"Reorganization Transaction" -- see clause (d) of the definition of “Change in Control.”

“Similarly Owned Company" -- see clause (a) of the definition of “Change in Control.”

The Compensation and Succession Committee of the Board of Directors of The Allstate Corporation believes that it is appropriate to have a policy regarding the recoupment of incentive compensation from Award Recipients. The Allstate Corporation Clawback Policy (the “Policy”) reads as follows: 

1)    If the Company is required to undertake a Restatement, then the Committee may seek to recover all or any portion of the Recoverable Incentive received by any Award Recipient during the Applicable Period; or

2)    If an Award Recipient is terminated for Improper Conduct and such Improper Conduct either has resulted in, or could reasonably be expected to result in, a Material Adverse Impact, then the Committee may seek to recover all or any portion of the Recoverable Incentive paid to such Award Recipient during the Applicable Period.

For purposes of this Policy, the following terms shall have the following meanings:

1) “Applicable Period” means (i) in the case of any Restatement, the three-year period preceding the date of the Restatement and (ii) in the case of any Improper Conduct, the three-year period preceding the date of the Award Recipient’s termination of employment.

7)  “Material Adverse Impact” means any material adverse impact on the reputation of, or a material adverse economic consequence for, the Company or any subsidiaries, including direct harm to shareholders, reputational harm that adversely affects customer or investor confidence, damage to the Company’s competitiveness, stock price or long-term shareholder value.

• The likelihood of success of recouping the compensation under governing law relative to the effort involved;

• Whether the recoupment may prejudice the Company’s or any subsidiary’s interest in any related proceeding or investigation;

• Whether the expense required to recoup the compensation is likely to exceed the Recoverable Incentive;

• The passage of time since the occurrence of the Improper Conduct;

• Any pending legal action related to the Improper Conduct; and

• Any other factors the Committee may deem appropriate under the circumstances.

 

Subject to applicable law, the Committee may seek to recoup such Recoverable Incentive in the manner it chooses including by requiring any affected Award Recipient to repay such amount to the Company or any subsidiary; by set-off; by reducing future compensation; or by such other means or combination of means as the Committee determines to be appropriate. In addition, the Committee may determine whether and to what extent additional action is appropriate to address the circumstances surrounding such Restatement or such Termination for Improper Conduct so as to minimize the likelihood of any recurrence and to impose such other discipline as it determines appropriate.

The return of the Recoverable Incentive is in addition to and separate from any other relief available to the Company or any other actions as may be taken by the Committee in its sole discretion.

This Policy, and all determinations made and actions taken pursuant to this Policy, shall be governed by the laws of the state of Delaware and applicable federal laws, excluding any conflicts or choice of law rule or principle.

In the event that any provision of this Policy is unenforceable under applicable law, the validity or enforceability of the remaining provisions will not be affected. To the extent any provision of this Policy is determined by a court or arbitrator to be unenforceable, a court or arbitrator shall interpret or modify the Policy, to the extent necessary, for it to be enforceable to the maximum extent possible.  The provisions of this Policy will, where possible, be interpreted so as to sustain its legality and enforceability.

All aspects of any dispute between an Award Recipient and the Company (including a dispute with any of its subsidiaries) that includes a controversy or claim arising out of or relating to this Policy or the breach thereof (including any aspects of such dispute that are in addition to those relating to this Policy or breach thereof) shall be settled by final, binding and non-appealable arbitration in accordance with the terms of the Mutual Arbitration Agreement entered into by and between the Award Recipient and the Company or any subsidiary.