As filed with the Securities and Exchange Commission on May 31, 1996
                                                      Registration No. ________

===============================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                         -------------------------------

                                    FORM S-8
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933




                            THE ALLSTATE CORPORATION
               (Exact Name of Issuer as Specified in its Charter)

    DELAWARE                                          36-3871531
(State of Incorporation)                 (I.R.S. Employer Identification No.)

                                Allstate Plaza
                         Northbrook, Illinois  60062
            (Address and Zip Code of principal executive offices)


                            THE ALLSTATE CORPORATION
                EQUITY INCENTIVE PLAN FOR NON-EMPLOYEE DIRECTORS
                           (Full title of the Plan)
                                 -------------

                                 ROBERT W. PIKE
                  Vice President, Secretary and General Counsel
                             The Allstate Corporation
                                Allstate Plaza
                         Northbrook, Illinois  60062
                                (708) 402-6075
          (Name, address, and telephone number of agent for service)
                                --------------


<PAGE>

<TABLE>
<CAPTION>

                       CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------

<S>   <C>                       <C>                       <C>                         <C>                     <C>

                                                           Proposed                    Proposed
       Title of                                             Maximum                     Maximum
      Securities                  Amount                   Offering                    Aggregate                Amount of
         to be                     to be                     Price                     Offering               Registration
      Registered                Registered                Per Share (1)                 Price (1)                 Fee
      ----------                ----------                ---------                     -----                     ---


Common                            300,000                  $41.6875                   $12,506,250             $4,312.53
Stock, par                        shares
value $.01 per
share


================================================================================

<FN>
(1)      Estimated pursuant to Rule 457(h) solely for the purpose of calculating
         the aggregate  offering  price and the amount of the  registration  fee
         based  upon the  average of the high and low  prices  reported  for the
         shares on the New York Stock Exchange on May 29, 1996.

</FN>
</TABLE>



                                    - 2 -

<PAGE>



                                        PART I

                  INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS

                  The documents containing information specified in Part I (plan
information  and registrant  information)  will be sent or given to directors of
The Allstate  Corporation  ("Allstate" or the "Company") eligible to participate
in Allstate's  Equity Incentive Plan for Non-Employee  Directors (the "Plan") as
specified by Rule  428(b)(1)  under the  Securities Act of 1933, as amended (the
"Securities  Act").  Such  documents  need not be filed with the  Securities and
Exchange  Commission  (the  "Commission")  either  as part of this  Registration
Statement or as  prospectuses  or  prospectus  supplements  pursuant to Rule 424
under the Securities  Act.  These  documents and the documents  incorporated  by
reference in this Registration  Statement  pursuant to Item 3 of Part II of this
Registration Statement,  taken together,  constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act.





                                    - 3 -

<PAGE>



                                    PART II

              INFORMATION REQUIRED IN THE REGISTRATION STATEMENT


ITEM 3:  INCORPORATION OF DOCUMENTS BY REFERENCE

         The  following  documents  filed by Allstate  with the  Commission  are
incorporated in and made a part of this Registration Statement by reference,  as
of their respective dates:

         (1)  Allstate's  Annual  Report on Form 10-K for the fiscal  year ended
         December 31, 1995 and Allstate's  Proxy  Statement dated March 30, 1996
         relating to the Annual Meeting of Stockholders on May 21, 1996 at which
         the Plan was approved;

         (2) Allstate's Quarterly Report on Form 10-Q for the quarter ended
         March 31, 1996;

         (3) the  description  of  Allstate's  common  shares  under the caption
         "Description of Capital Stock" contained in Allstate's prospectus dated
         June 2, 1993,  filed with the  Commission  on June 4, 1993  pursuant to
         Rule  424(b)  under  the  Securities  Act  and  deemed  to be a part of
         Allstate's Registration Statement on Form S-1 (File No. 33- 59676); and

         (4) from the date of filing of such  documents,  all documents filed by
         Allstate with the Commission  pursuant to Section 13(a),  13(c),  14 or
         15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
         Act"),  subsequent to the date of this Registration Statement and prior
         to the  filing  of a  post-effective  amendment  to  this  Registration
         Statement which indicates that all securities  offered hereby have been
         sold or which deregisters all securities then remaining unsold.

         Any  statement  contained  in a document  incorporated  or deemed to be
incorporated  by reference  herein shall be deemed to be modified or  superseded
for  purposes  of this  Registration  Statement  to the extent  that a statement
contained  herein or in any  subsequently  filed  document  which  also is or is
deemed  to be  incorporated  by  reference  herein  modifies  or  replaces  such
statement.  Except as so modified or  superseded,  such  statement  shall not be
deemed to constitute a part of this Registration Statement.


ITEM 4:  DESCRIPTION OF SECURITIES

         Not applicable.


ITEM 5:  INTERESTS OF NAMED EXPERTS AND COUNSEL



                                    - 4 -

<PAGE>




         The validity of the Company's Common Stock being registered  hereby has
been  passed  upon by Joseph T.  Kane,  Counsel,  Corporate  Law  Department  of
Allstate Insurance Company, a wholly-owned subsidiary of the Company.


ITEM 6:  INDEMNIFICATION OF DIRECTORS AND OFFICERS

         Section 145 of the Delaware General Corporation Law (the "DGCL"), inter
alia,  empowers a Delaware  corporation  to indemnify any person who was or is a
party  or is  threatened  to be  made a  party  to any  threatened,  pending  or
completed action, suit or proceeding (other than an action by or in the right of
the  corporation)  by reason of the fact that such  person is or was a director,
officer,  employee  or  agent of the  corporation  or is or was  serving  at the
request of the corporation as a director,  officer, employee or agent of another
corporation or other enterprise,  against expenses (including  attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in  connection  with such action,  suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests  of the  corporation,  and,  with  respect to any  criminal  action or
proceeding, had no reasonable cause to believe his conduct was unlawful. Similar
indemnity is authorized for such persons against expenses (including  attorneys'
fees)  actually  and  reasonably  incurred  in  connection  with the  defense or
settlement of any such  threatened,  pending or completed action or suit if such
person  acted in good faith and in a manner he  reasonably  believed to be in or
not opposed to the best interests of the corporation,  and provided further that
(unless a court of competent  jurisdiction otherwise provides) such person shall
not have been adjudged liable to the corporation.  Any such  indemnification may
be made only as authorized in each  specific  case upon a  determination  by the
shareholders  or  disinterested  directors or by independent  legal counsel in a
written  opinion that  indemnification  is proper because the indemnitee has met
the applicable standard of conduct.

         Section 145 further  authorizes a corporation  to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director,  officer, employee or agent of another corporation or enterprise,
against  any  liability  asserted  against  him and  incurred by him in any such
capacity,  or arising out of his status as such,  whether or not the corporation
would  otherwise  have the power to indemnify him under Section 145. The Company
maintains  policies  insuring its and its  subsidiaries'  officers and directors
against  certain  liabilities  for actions taken in such  capacities,  including
liabilities under the Securities Act.

         Article IV of the By-laws of the Company  provides for  indemnification
of the directors and officers of the Company to the fullest extent  permitted by
law, as now in effect or later  amended.  In addition,  the By-laws  provide for
indemnification against expenses incurred by a director or officer to be paid by
the  Company  in  advance  of the  final  disposition  of such  action,  suit or



                                    - 5 -

<PAGE>



        
proceeding; provided, however, that an advancement of expenses will be made only
upon  receipt of an  undertaking  by or on behalf of the  director or officer to
repay such amount unless it shall be ultimately  determined  that he is entitled
to be indemnified by the Company.  The By-laws further provide for a contractual
cause of  action on the part of  directors  and  officers  of the  Company  with
respect to indemnification claims which have not been paid by the Company.

         The Company also has provided liability insurance for each director and
officer for certain  losses  arising  from claims or charges  made  against them
while acting in their capacities as directors or officers of the Company.

         Article Ninth of the Company's  Restated  Certificate of  Incorporation
limits,  to the fullest extent  permitted by the DGCL, as the same exists or may
be amended,  the personal liability of the Company's directors to the Company or
its  stockholders  for monetary  damages for a breach of their fiduciary duty as
directors. Section 102(b)(7) of the DGCL currently provides that such provisions
do not eliminate the liability of a director (i) for a breach of the  director's
duty of loyalty to the Company or its  stockholders,  (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law,  (iii) under  Section 174 of the DGCL  (relating to the  declaration  of
dividends  and purchase or  redemption  of shares in violation of the DGCL),  or
(iv) for any transaction  from which the director  derived an improper  personal
benefit.


ITEM 7:  EXEMPTION FROM REGISTRATION CLAIMED

         Not applicable.

ITEM 8:  EXHIBITS

         The Exhibits to this  Registration  Statement are listed in the Exhibit
Index of this  Registration  Statement,  which Index is  incorporated  herein by
reference.


ITEM 9:  UNDERTAKINGS

         The Company hereby undertakes:

         (1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:

                  (i)      to include any prospectus required by Section 10(a)
                           (3) of the Securities Act;



                                    - 6 -

<PAGE>




                  (ii)     to  reflect  in the  prospectus  any  facts or events
                           arising after the effective date of the  Registration
                           Statement   (or  the   most   recent   post-effective
                           amendment  thereof)  which,  individually  or in  the
                           aggregate,  represent  a  fundamental  change  in the
                           information set forth in the Registration Statement;

                  (iii)    to include any material  information  with respect to
                           the plan of distribution not previously  disclosed in
                           the Registration  Statement or any material change to
                           such information in the Registration Statement;

provided,  however,  that  paragraphs  (1)(i)  and  (1)(ii)  do not apply if the
information  required  to be  included in a  post-effective  amendment  by those
paragraphs  is contained in periodic  reports  filed by the Company  pursuant to
Section  13 or  Section  15(d) of the  Exchange  Act that  are  incorporated  by
reference in this Registration Statement

         (2) That,  for the  purpose  of  determining  any  liability  under the
Securities Act, each such  post-effective  amendment shall be deemed to be a new
registration  statement  relating to the  securities  offered  therein,  and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

         (3) To remove from registration by means of a post-effective  amendment
any of the securities being registered which remain unsold at the termination of
the offering.

         The Company hereby  undertakes  that,  for purposes of determining  any
liability under the Securities  Act, each filing of the Company's  annual report
pursuant  to  Section  13(a)  or  Section  15(d)  of the  Exchange  Act  that is
incorporated by reference in the Registration  Statement shall be deemed to be a
new registration  statement relating to the securities offered therein,  and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

         Insofar as indemnification for liabilities arising under the Securities
Act may be  permitted to  directors,  officers  and  controlling  persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Commission  such  indemnification  is against
public  policy  as  expressed  in  the   Securities   Act  and  is,   therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by the Company of expenses incurred or
paid  by a  director,  officer  or  controlling  person  of the  Company  in the
successful  defense of any  action,  suit or  proceeding)  is  asserted  by such
director,  officer or controlling person in connection with the securities being
registered,  the Company  will,  unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as  expressed  in the  Securities  Act and will be  governed by the final
adjudication of such issue.


                                    - 7 -

<PAGE>




                                  SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, the Company
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in Cook County, State of Illinois, on May 21, 1996.


                           THE ALLSTATE CORPORATION

                                        By: /s/Robert W. Pike
                                        Name:  Robert W. Pike
                                        Title: Vice President, Secretary
                                                and General Counsel



         Pursuant to the requirements of the Securities Act of 1933, this report
has been signed below by the  following  persons on behalf of the  Registrant in
the capacities and on the dates indicated.  Each person whose signature  appears
below  constitutes  and appoints Jerry D. Choate,  Edward M. Liddy and Robert W.
Pike, and each of them, his true and lawful attorney-in-fact and agent with full
power of substitution  and  resubstitution,  for him and in his name,  place and
stead,  in any  and  all  capacities,  to  sign  any or all  amendments  to this
Registration  Statement,  and to file the same, with all exhibits  thereto,  and
other  documents  in  connection  therewith,  with the  Securities  and Exchange
Commission,  granting  unto said  attorneys-in-fact  and  agents  full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person,  thereby  ratifying  and  confirming  all that said
attorneys-in-fact and agents, or their substitutes,  may lawfully do or cause to
be done by virtue hereof.

<TABLE>
<CAPTION>

SIGNATURE                           TITLE                                                    DATE

<S>                                 <C>                                                      <C>

/s/Jerry D. Choate                  Director, Chairman of the Board of                       May 21, 1996
- ------------------
Jerry D. Choate                     Directors, and Chief Executive Officer
                                    (Principal Executive Officer)


</TABLE>




                                    - 8 -

<PAGE>


<TABLE>
<S>                                 <C>                                                      <C>
/s/Thomas J. Wilson                 Vice President and Chief Financial                       May 21, 1996
- -------------------
Thomas J. Wilson                    Officer (Principal Financial Officer)

- -------------------------------------------------------------------------------
/s/Samuel H. Pilch                  Controller (Principal Accounting Officer)                May 21, 1996
- ------------------
Samuel H. Pilch

- -------------------------------------------------------------------------------
/s/James G. Andress                 Director                                                 May 21, 1996
James G. Andress

- -------------------------------------------------------------------------------
/s/Warren L. Batts                  Director                                                 May 21, 1996
Warren L. Batts

- -------------------------------------------------------------------------------
/s/Edward A. Brennan                Director                                                 May 21, 1996
Edward A. Brennan

- -------------------------------------------------------------------------------
/s/James M. Denny                   Director                                                 May 21, 1996
James M. Denny

- -------------------------------------------------------------------------------
/s/Christopher F. Edley             Director                                                 May 21, 1996
Christopher F. Edley

- -------------------------------------------------------------------------------
/s/William E. LaMothe               Director                                                 May 21, 1996
William E. LaMothe

- -------------------------------------------------------------------------------
/s/Michael A. Miles                 Director                                                 May 21, 1996
Michael A. Miles

- -------------------------------------------------------------------------------
/s/Nancy C. Reynolds                Director                                                 May 21, 1996
Nancy C. Reynolds

- -------------------------------------------------------------------------------
/s/Mary Alice Taylor                Director                                                 May 21, 1996
Mary Alice Taylor
- -------------------------------------------------------------------------------

</TABLE>




                                    - 9 -

<PAGE>

<TABLE>
<CAPTION>


Exhibit                             EXHIBIT INDEX                                    Sequentially
Number                                                                               Numbered Page
                                                                                     -------------

                                    Description of Exhibit
                                    ----------------------


<S>               <C>                                                                      <C>
4(a)              Restated   Certificate   of   Incorporation   of  the  Company
                  (incorporated  by reference  to Exhibit 3(a) of the  Company's
                  Quarterly  Report on Form 10-Q for the quarter ended September
                  30, 1995).

4(b)              By-Laws of the Company  (incorporated  by reference to Exhibit
                  3(b) of the Company's  Annual Report on Form 10-K for the year
                  ended December 31, 1995).

4(c)              The Allstate Corporation Equity Incentive Plan for
                  Non-Employee Directors.

5                 Opinion of Joseph T. Kane.

15                Acknowledgment of Deloitte & Touche LLP
                  regarding unaudited interim financial
                  information.

23(a)             Consent of Joseph T. Kane (included in Exhibit 5).

23(b)             Consent of Deloitte & Touche LLP.

28                Information from Reports Furnished to State Insurance
                  Regulatory Authorities (incorporated by reference to Exhibit
                  28 of the Company's Annual Report on Form 10-K for the year
                  ended December 31, 1995).


</TABLE>










                                     E-1

<PAGE>



                                                                  Exhibit 4(c)



                           THE ALLSTATE CORPORATION

               EQUITY INCENTIVE PLAN FOR NON-EMPLOYEE DIRECTORS

I.       PURPOSE.

         The  purpose of The  Allstate  Corporation  Equity  Incentive  Plan for
Non-Employee  Directors (the "Plan") is to promote the interests of The Allstate
Corporation  (the "Company") by providing an inducement to obtain and retain the
services of  qualified  persons as members of the  Company's  Board of Directors
(the  "Board") and to align more closely the  interests of such persons with the
interests of the Company's  stockholders  by providing a significant  portion of
the  compensation  provided to such persons in the form of equity  securities of
the Company.

II.      ADMINISTRATION.

         The Plan shall be  administered  by the Committee.  The Committee shall
have full power to  construe  and  interpret  the Plan and  Shares  and  Options
granted  hereunder,  to establish and amend rules for its  administration and to
correct any defect or omission and to reconcile any inconsistency in the Plan or
in any Share or Option  granted  hereunder  to the  extent the  Committee  deems
desirable  to carry  the Plan or any  Share or  Option  granted  hereunder  into
effect.  Any decisions of the Committee in the  administration of the Plan shall
be final and  conclusive.  The  Committee  may  authorize any one or more of its
members, the secretary of the Committee or any officer of the Company to execute
and deliver documents on behalf of the Committee.  Each member of the Committee,
and, to the extent provided by the Committee, any other person to whom duties or
powers shall be delegated in connection with the Plan,  shall incur no liability
with  respect to any action taken or omitted to be take in  connection  with the
Plan and shall be fully  protected  in  relying in good faith upon the advice of
counsel, to the fullest extent permitted under applicable law.

III.     ELIGIBILITY.

         Each  Non-Employee  Director  shall be eligible to  participate  in the
Plan.

IV.      LIMITATION ON AGGREGATE SHARES.

         A. Maximum  Number of Shares.  The aggregate  maximum  number of Shares
that may be granted  pursuant  to the Plan or issued  upon  exercise  of Options
granted  pursuant to the Plan shall be 300,000  shares.  Such maximum  number of
Shares is subject to adjustment under the provisions of Section IV.B. The Shares
to be granted or issued upon exercise of Options may be authorized  but unissued
Shares or Shares previously issued which have been reacquired by the Company. In
the event any Option or Reload Option shall, for any reason, terminate or expire
or be  surrendered  without having been exercised in full, the Shares subject to
such Option or Reload Option but not


<PAGE>



purchased  thereunder shall be available for future Options or Reload Options to
be granted under the Plan.

         B.       Adjustment.  The  maximum  number  of  Shares  referred  to in
Section IV.A of the Plan, the number of Shares granted pursuant to Section VI of
the Plan, the number of Options granted pursuant to Section VII of the Plan, and
the  option  price and the  number of Shares  which may be  purchased  under any
outstanding   Option   granted   under   Section   VII  of  the  Plan  shall  be
proportionately  adjusted  for any  increase or decrease in the number of issued
and  outstanding  Shares as the result of (i) the  declaration  and payment of a
dividend  payable  in  Common  Stock,  or  the  division  of  the  Common  Stock
outstanding at the date hereof (or the date of the grant of any such outstanding
Option,  as  applicable)  into a greater number of Shares without the receipt of
consideration  therefor by the Company,  or any other  increase in the number of
such  Shares of the Company  outstanding  at the date hereof (or the date of the
grant of any such outstanding  Option, as applicable) which is effective without
the receipt of  consideration  therefor by the Company  (exclusive of any Shares
granted by the Company to  employees  of the Company or any of its  Subsidiaries
without  receipt  of  separate  consideration  by  the  Company),  or  (ii)  the
consolidation  of the Shares  outstanding at the date hereof (or the date of the
grant of any such  outstanding  Option,  as applicable) into a smaller number of
Shares without the payment of consideration thereof by the Company, or any other
decrease  in the number of such  Shares  outstanding  at the date hereof (or the
date of the  grant of any  such  outstanding  Option,  as  applicable)  effected
without the payment of consideration by the Company; provided, however, that the
total option  price for all Shares  which may be purchased  upon the exercise of
any Option granted  pursuant to the Plan (computed by multiplying  the number of
Shares originally purchasable  thereunder,  reduced by the number of such Shares
which have theretofore been purchased  thereunder,  by the original option price
per share  before  any of the  adjustments  herein  provided  for)  shall not be
changed.

         In the event of a change in the Common Stock as  presently  constituted
which is limited to a change of the Company's authorized shares with a par value
into the same number of shares with a different  par value or without par value,
the shares  resulting from any such change will be deemed to be the Common Stock
within the meaning of this Plan and no adjustment  will be required  pursuant to
this Section IV.B.

         The  foregoing  adjustments  shall  be  made  by the  Committee,  whose
determination in that respect shall be final, binding and conclusive.  Except as
expressly  provided in this Section IV.B, a Non-Employee  Director shall have no
rights by reason of any subdivision or  consolidation  of shares of stock of any
class or the payment of any stock  dividend or any other increase or decrease in
the number of shares of stock of any class.

V.       DEFINITIONS.

         The  following  terms shall have the meanings set forth below when used
herein:

         "Code" means the Internal Revenue Code of 1986, as amended.

                                       2

<PAGE>




         "Committee"  means the  Compensation  and  Nominating  Committee of the
Board, any successor  committee of the Board performing similar functions or, in
the absence of such a committee, the Board.

         "Common Stock" means the Common Stock, par value $.01 per share, of the
Company.

         "Disability" means a mental or physical condition which, in the opinion
of the Committee, renders a Non-Employee Director unable or incompetent to carry
out his or her  duties as a member of the  Board  and  which is  expected  to be
permanent or for an indefinite duration.

         "Election  Shares" means any Shares issued to a  Non-Employee  Director
pursuant to the  election of such person to receive  such Shares in lieu of cash
compensation made in accordance with Section VIII.B.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Fair Market Value" of any Share means, as of any applicable  date, the
mean  between  the high and low prices of the Shares as reported on the New York
Stock  Exchange-Composite  Tape, or if no such reported sale of the Shares shall
have occurred on such date, on the next  succeeding date on which there was such
a reported sale.

         "Initial  Election Date" means,  for each  Non-Employee  Director,  the
later to occur of (i) the date the Plan is approved and adopted by the Company's
stockholders  pursuant  to Section  XIII of the Plan,  and (ii) the date of such
member's initial election or appointment to the Board.

         "Non-Employee  Director"  means each  member of the Board who is not an
officer or employee of the Company or any of its Subsidiaries.

         "Option" means an option to purchase shares of Common Stock.

         "Shares" means shares of Common Stock.

         "Subsidiary" means any partnership,  corporation,  association, limited
liability company,  joint stock company,  trust,  joint venture,  unincorporated
organization or other business entity of which (i) if a corporation,  a majority
of the total voting  power of shares of stock  entitled  (without  regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled,  directly or indirectly, by
the  Company  or one or more  of the  other  Subsidiaries  of the  Company  or a
combination  thereof, or (ii) if a partnership,  association,  limited liability
company, joint stock company, trust, joint venture,  unincorporated organization
or other business  entity, a majority of the partnership or other similar equity
ownership  interest  thereof is at the time  owned or  controlled,  directly  or
indirectly, by the Company or one or more

                                       3

<PAGE>



Subsidiaries of the Company or a combination  thereof.  For purposes hereof, the
Company or a Subsidiary shall be deemed to have a majority ownership interest in
a partnership,  association,  limited  liability  company,  joint stock company,
trust,  joint venture,  unincorporated  organization or other business entity if
the Company or such  Subsidiary  shall be  allocated a majority of  partnership,
association,  limited  liability  company,  joint stock  company,  trust,  joint
venture, unincorporated organization or other business entity gains or losses or
shall be or control  the  managing  director,  the  trustee,  the manager or the
general partner of such partnership,  association,  limited  liability  company,
joint stock company, trust, joint venture,  unincorporated organization or other
business entity.

VI.      FORMULA RESTRICTED STOCK GRANTS FOR NON-EMPLOYEE DIRECTORS.

         A.       Annual  Grant  of  Shares.  Beginning  December  1,  1996,  on
December  1 of each year 500  Shares  shall  automatically  be  granted  to each
Non-Employee  Director  serving on the Board on such date who has served in such
capacity  since June 1 of such year.  If any person  serving as a Non-  Employee
Director  on June 1 of any year  ceases to serve as a  director  of the  Company
prior to December 1 of such year, such director shall be  automatically  granted
on his or her last day of service a number of Shares equal to (i) 500 multiplied
by (ii) a fraction, the numerator of which is the number of full calendar months
such  Non-Employee  Director has served on the Board during the period beginning
on such  June 1 and  ending on such  director's  last  date of  service  and the
denominator of which is 6.

         B.       Grant for Newly Appointed  Directors.  If after June 1, 1996 a
Non-Employee  Director is initially  elected or appointed to the Board effective
on any date other than June 1, such Non- Employee  Director shall  automatically
be granted,  on the June 1 following the date he or she joins the Board (or such
earlier  date as he or she  ceases to serve as a  director),  a number of Shares
equal to (i) 500  multiplied  by (ii) a fraction,  the numerator of which is the
number of full  calendar  months such  Non-Employee  Director  has served on the
Board during the period beginning on the date such director joined the Board and
ending on the  following  May 31 (or such  earlier  date as he or she  ceases to
serve as a  director)  and the  denominator  of which is 6;  provided  that such
fraction shall in no event be greater than one.

         C.       Transition   Grant  for   Existing   Directors.   Subject   to
stockholder  approval and adoption  pursuant to Section XIII of the Plan, on May
31, 1996, each  Non-Employee  Director who was serving on the Board on March 12,
1996  shall  be  automatically  granted  a  number  of  Shares  equal to (i) 200
multiplied  by (ii) a  fraction,  the  numerator  of which is the number of full
calendar  months of  service  by such  Non-Employee  Director  during the period
beginning on the later of (a) such director's last  anniversary date for service
on the  Board  and (b) the date  such  director  first  attained  the  status of
Non-Employee  Director  and ending on May 31, 1996 (or such earlier date as such
director ceases to serve as a director) and the denominator of which is 12.


                                       4

<PAGE>



         D.       Rounding of Share Amounts.  To the extent that  application of
the foregoing  formulas would result in fractional  Shares being issuable,  such
Non-Employee  Director  shall be granted a number of Shares equal to the nearest
whole number of Shares.

         E.       Payment for Estimated  Taxes.  In addition,  the Company shall
pay to each Non- Employee  Director,  in cash, as soon as practicable after each
issuance of Shares pursuant to this Section VI, an amount equal to the estimated
increase  in  such  Non-Employee   Director's  federal,   state  and  local  tax
liabilities as a result of such grant of Shares,  assuming the maximum statutory
tax rates applicable to such Non-Employee Director.

         F.       Restrictions.  The Non-Employee Directors shall have no rights
as a  shareholder  with  respect to any Shares to be  granted  pursuant  to this
Section  VI prior to the time such  Shares are  granted.  Upon such  grant,  the
Shares shall be represented by a stock certificate registered in the name of the
holder.  The Shares  granted  pursuant to this Section VI shall be fully vested,
but shall be  subject  to  certain  restrictions  during  the six  month  period
following the date of grant (the  "Restriction  Period").  The holder shall have
the  right to  enjoy  all  shareholder  rights  during  the  Restriction  Period
(including  the right to vote the Shares  and the right to  receive  any cash or
other dividends paid in respect  thereof) with the exception that (i) the holder
may not sell,  transfer,  pledge or assign  the Shares  during  the  Restriction
Period,   and  (ii)  the  Company  shall  retain  custody  of  the  certificates
representing the Shares during the Restriction Period.

         All  restrictions  shall  lapse and the holder of the  Shares  shall be
entitled to the delivery of a stock certificate or certificates representing the
Shares  (and  to the  removal  of any  restrictive  legend  set  forth  on  such
certificates) upon the earliest of (i) six months from the date of grant of such
Shares, (ii) the date of the holder's death or Disability, and (iii) the date on
which the holder is no longer serving as a director of the Company.

VII.     FORMULA STOCK OPTION GRANTS FOR NON-EMPLOYEE DIRECTORS.

         A.   Annual Grant of Options. On June 1 of each year, beginning June 1,
1996,  Options to purchase 1,500 Shares shall  automatically  be granted to each
Non-Employee   Director  serving  on  the  Board  on  such  date.  If  any  such
Non-Employee  Director  will be required to retire  (pursuant to the policies of
the Board) during the 12 month period  beginning on the date of any grant (or if
any such Non-Employee  Director has notified the Board that he or she intends to
resign from the Board for any reason during the 12 month period beginning on the
date of any  grant),  such  director  shall  instead be granted on June 1 of the
relevant  year  Options  to  purchase  a number  of Shares  equal to (i)  1,500,
multiplied  by (ii) a  fraction,  the  numerator  of which is the number of full
calendar  months such  Non-Employee  Director will serve on the Board during the
period  beginning  on such  June 1 and  ending on such  director's  last date of
service and the denominator of which is 12.

         B.       Grant for Newly Appointed  Directors.  If after June 1, 1996 a
Non-Employee  Director is initially  elected or appointed to the Board effective
on any date other than June 1, such Non- Employee  Director shall  automatically
be granted, on the date he or she joins the Board, Options to

                                       5

<PAGE>



purchase a number of Shares equal to (i) 1,500,  multiplied  by (ii) a fraction,
the numerator of which is the number of full calendar  months such  Non-Employee
Director  will serve on the Board  during the period  beginning on the date such
director joins the Board and ending on the following May 31 and the  denominator
of which is 12.

         C.       Option Exercise  Price.  The exercise price per Share for each
Option  shall be 100% of the Fair Market  Value of a Share on the date of grant,
subject to Section IV.B.

         D.       Term of Options.  Each Option shall be exercisable for ten
years after the date of grant, subject to Section VII.F.

         E.       Conditions and Limitations on Exercise.

                  (i)   Vesting.   Each   Option   shall  vest  in  three  equal
         installments on the first,  second and third  anniversaries of the date
         of grant. Upon a Non-Employee  Director's mandatory retirement pursuant
         to the policies of the Board, the unvested  portions of any outstanding
         Options held by such  Non-Employee  Director shall fully vest. Upon the
         termination of a Non-Employee  Director's  tenure for any other reason,
         the unvested  portions of any  outstanding  Options shall expire and no
         Options  granted  to such  Non-Employee  Director  shall vest after the
         termination of such director's tenure on the Board.

                  (ii) Exercise. Each Option shall be exercisable in one or more
         installments  and shall not be  exercisable  for less than 100  Shares,
         unless the exercise represents the entire remaining exercisable balance
         of a grant or grants. Each Option shall be exercised by delivery to the
         Company of written  notice of intent to  purchase a specific  number of
         Shares  subject to the  Option.  The  option  price of any Shares as to
         which an Option shall be exercised shall be paid in full at the time of
         the  exercise.  Payment  may,  at  the  election  of  the  Non-Employee
         Director, be made in any one or any combination of the following forms:

                       (a)          check or wire transfer of funds in such form
as may be satisfactory to the Committee;

                       (b) delivery of Shares  valued at their Fair Market Value
                  on the date of  exercise  or, if the date of exercise is not a
                  business day, the next succeeding business day;

                       (c)          through  simultaneous  sale through a broker
                  of  unrestricted  Shares  acquired on  exercise,  as permitted
                  under Regulation T of the Federal Reserve Board; or

                       (d) by  authorizing  the  Company  in his or her  written
                  notice of  exercise  to  withhold  from  issuance  a number of
                  Shares  issuable  upon  exercise  of such Option  which,  when
                  multiplied  by the Fair  Market  Value of Common  Stock on the
                  date of

                                       6

<PAGE>



                  exercise  (or, if the date of exercise is not a business  day,
                  the next  succeeding  business day), is equal to the aggregate
                  exercise   price   payable  with  respect  to  the  Option  so
                  exercised.

         In the event a Non-Employee  Director  elects to pay the exercise price
payable with respect to an Option pursuant to clause (b) above, (i) only a whole
number of Share(s) (and not fractional Shares) may be tendered in payment,  (ii)
such Non-Employee  Director must present evidence acceptable to the Company that
he or she has owned any such Shares  tendered in payment of the  exercise  price
(and that such Shares tendered have not been subject to any substantial  risk of
forfeiture) for at least six months prior to the date of exercise, and (iii) the
certificate(s)  for all such Shares  tendered in payment of the  exercise  price
must  be  accompanied  by  duly  executed  instruments  of  transfer  in a  form
acceptable to the Company.  When payment of the Option exercise price is made by
the tender of Shares,  the difference,  if any,  between the aggregate  exercise
price  payable with respect to the Option  being  exercised  and the Fair Market
Value of the Share(s)  tendered in payment (plus any applicable  taxes) shall be
paid by check or wire  transfer of funds.  No  Non-Employee  Director may tender
Shares having a Fair Market Value exceeding the aggregate exercise price payable
with respect to the Option being exercised.

         In the event a Non-Employee  Director  elects to pay the exercise price
payable with respect to an Option pursuant to clause (d) above, (i) only a whole
number of Share(s)  (and not  fractional  Shares) may be withheld in payment and
(ii) such Non-Employee  Director must present evidence acceptable to the Company
that he or she has  owned a number of  Shares  at least  equal to the  number of
Shares to be  withheld  in  payment of the  exercise  price (and that such owned
Shares have not been subject to any substantial risk of forfeiture) for at least
six months  prior to the date of exercise.  When payment of the Option  exercise
price is made by the withholding of Shares, the difference,  if any, between the
aggregate  exercise price payable with respect to the Option being exercised and
the Fair Market Value of the Share(s)  withheld in payment (plus any  applicable
taxes)  shall  be paid by check  or wire  transfer  of  funds.  No  Non-Employee
Director may  authorize  the  withholding  of Shares  having a Fair Market Value
exceeding the aggregate  exercise price payable with respect to the Option being
exercised. Any withheld Shares shall no longer be issuable under such Option.

         F.       Additional Provisions.

                  (i)  Accelerated  Expiration  of Options Upon  Termination  of
         Directorship.  Upon the termination of a Non-Employee Director's tenure
         for any reason,  each  outstanding  vested and  previously  unexercised
         Option shall  expire  three months after the date of such  termination;
         provided that (a) upon the  termination  of a  Non-Employee  Director's
         tenure as a result of death or Disability,  each outstanding vested and
         previously  unexercised Option shall expire two years after the date of
         his or her  termination  as a  director,  and (b)  upon  the  mandatory
         retirement of a Non-Employee  Director  pursuant to the policies of the
         Board, each outstanding vested and previously  unexercised Option shall
         expire  five  years  after  the  date  of his or her  termination  as a
         director.  In no event  shall  the  provisions  of this  Section  VII.F
         operate to extend the original expiration date of any Option.

                                       7

<PAGE>




                  (ii)  Sale of the  Company.  In the  event of a merger  of the
         Company  with or into  another  corporation  constituting  a change  of
         control  of the  Company,  a sale  of all or  substantially  all of the
         Company's  assets or a sale of a majority of the Company's  outstanding
         voting securities (a "Sale of the Company"), the Options may be assumed
         by the successor  corporation or a parent of such successor corporation
         or substantially equivalent options may be substituted by the successor
         corporation  or a  parent  of such  successor  corporation,  and if the
         successor  corporation  does  not  assume  the  Options  or  substitute
         options,  then  all  outstanding  and  unvested  Options  shall  become
         immediately  exercisable and all outstanding Options shall terminate if
         not  exercised  as of the date of the  Sale of the  Company  (or  other
         prescribed  period of time). The Company shall provide at least 30 days
         prior  written  notice of the Sale of the Company to the holders of all
         outstanding  Options,  which notice shall state whether (a) the Options
         will  be  assumed  by  the  successor   corporation  or   substantially
         equivalent options will be substituted by the successor corporation, or
         (b)  the  Options  are  thereafter  vested  and  exercisable  and  will
         terminate  if not  exercised  as of the date of the Sale of the Company
         (or other prescribed period of time).

                  (iii)  Liquidation  or  Dissolution.   In  the  event  of  the
         liquidation  or  dissolution  of the Company,  Options shall  terminate
         immediately prior to the liquidation or dissolution.

         G. Grant of Reload Options.  A Non-Employee  Director who exercises all
or any portion of an Option by the tender or  withholding of Shares which have a
Fair  Market  Value equal to not less than 100% of the  exercise  price for such
Options (the "Exercised  Options")  shall be granted,  subject to Section IV, an
additional option (a "Reload Option") for a number of Shares equal to the sum of
the number of Shares  tendered or withheld in payment of the exercise  price for
the Exercised Options.

         Reload Options shall be subject to the following terms and conditions:

                  (i)   the grant date for each Reload Option shall be the date
of exercise of the Exercised Option to which it relates;

                  (ii) subject to clause (iii) below,  the Reload  Option may be
         exercised at any time during the unexpired term of the Exercised Option
         (subject to earlier termination thereof as provided in the Plan); and

                  (iii) the other terms of the Reload  Option  shall be the same
         as the terms of the  Exercised  Option to which it relates and shall be
         subject to the provisions of the Plan, except that (a) the option price
         shall be the Fair  Market  Value of the Shares on the grant date of the
         Reload Option,  (b) no Reload Option may be exercised within six months
         from the grant date  thereof,  and (c) no other Reload  Option shall be
         granted upon exercise of such Reload Option.


                                       8

<PAGE>



         H.       Non-Qualified  Stock  Options.  All Options  granted under the
Plan shall be non-qualified  options not entitled to special tax treatment under
Code Section 422, as may be amended from time to time.

VIII.    ELECTION TO RECEIVE STOCK IN LIEU OF CASH COMPENSATION.

         A.       General. A Non-Employee  Director may elect to reduce the cash
compensation  otherwise  payable for  services to be rendered by him or her as a
director for any period  beginning on June 1 and continuing to the following May
31 (or such other period for which cash  compensation is payable to Non-Employee
Directors pursuant to the policies of the Board),  beginning June 1, 1996 and to
receive in lieu thereof Shares as provided in this Section VIII.

         B.  Election.  By the later of (i) the November 30 preceding the June 1
to which such election  relates and (ii) such  Non-Employee  Director's  Initial
Election  Date,  each  Non-Employee  Director  may,  subject  to any  subsequent
approval by the stockholders of the Company  required by Rule 16b-3  promulgated
under  Section  16(b) of the  Exchange  Act,  make an  irrevocable  election  to
receive, in lieu of all or a specified  percentage (which percentage shall be in
10% increments) of the cash  compensation to which such director would otherwise
be entitled as a member of the Board and any committee  thereof  (including  the
annual  retainer  fee and any meeting or other fees  payable for services on the
Board  or  any  committee   thereof,   but  excluding  any   reimbursement   for
out-of-pocket  expenses) for the year  beginning  the following  June 1 (or such
other  period  for which  cash  compensation  is  payable  to such  Non-Employee
Director  pursuant to the policies of the Board),  an equivalent value in Shares
granted in accordance with this Section VIII. An election shall be effective (i)
if made by the November 30 preceding the June 1 to which such election  relates,
beginning  on the  June 1  following  such  election;  and  (ii) if made on such
Non-Employee  Director's Initial Election Date,  immediately (or, if later, June
1, 1996).

         Each such election shall (i) be in writing in a form  prescribed by the
Company, (ii) specify the amount of cash compensation to be received in the form
of Election  Shares  (expressed  as a percentage of the  compensation  otherwise
payable in cash),  and (iii) be delivered to the Secretary of the Company.  Such
election may not be revoked or changed  thereafter except as to compensation for
services to be rendered in any 12 month period  beginning on any June 1 at least
six months following such revocation or new election.

         C. Issuance of Common Stock. If a Non-Employee Director elects pursuant
to  Section  VIII.B  above to  receive  Shares,  there  shall be  issued to such
director  promptly  following each  subsequent June 1 for which such election is
effective  (or promptly  following  the first day of such other period for which
such  election  is  effective)  a  number  of  Shares  equal  to the  amount  of
compensation  otherwise payable for the 12 month period beginning on such June 1
(or the other period for which such election is  effective)  divided by the Fair
Market  Value of the  Shares on such  June 1 (or on the first day of such  other
period).  To the extent that the  application  of the  foregoing  formula  would
result in fractional shares of Common Stock being issuable, cash will be paid to
the

                                       9

<PAGE>



Non-Employee  Director  in lieu of such  fractional  Shares  based upon the Fair
Market Value of such fractional Share.

         D.  Compliance  with  Exchange  Act. The  election to receive  Election
Shares is intended to comply in all respects with Rule  16b-3(d)(1)  promulgated
under  Section  16(b) of the  Exchange  Act such that the  issuance  of Election
Shares  under the Plan on a grant date  occurring  at least six months after the
election shall be exempt from Section 16(b) of the Exchange Act.

         E.       Grant  Date.  The grant date for each  Election  Share for the
Non-Employee  Director electing such option shall be the first day of the period
to which such election relates and is effective.

IX.      MISCELLANEOUS PROVISIONS.

         A.       Rights of Non-Employee Directors.  No Non-Employee Director
shall be entitled under the Plan to voting rights, dividends or other rights of
a stockholder prior to the issuance of Common Stock.  Neither the Plan nor any
action taken hereunder shall be construed as giving any Non-Employee Director

any right to be retained in the service of the Company.

         B. Limitations on Transfer and Exercise.  All Options granted under the
Plan shall not be transferable by the Non-Employee Director,  other than by will
or the laws of descent and  distribution  or  pursuant  to a qualified  domestic
relations order, as defined by ss.1 et seq, of the Code, Title I of ERISA or the
rules and  regulations  thereunder,  and shall be  exercisable  during  the Non-
Employee  Director's  lifetime  only by such  Non-Employee  Director  or by such
Non-Employee Director's guardian or other legal representative.

         C.  Compliance  with Laws.  No shares of Common  Stock  shall be issued
hereunder  unless  counsel for the Company shall be satisfied that such issuance
will  be in  compliance  with  applicable  federal,  state,  local  and  foreign
securities, securities exchange and other applicable laws and requirements. Each
Share  granted  pursuant to Section VI or Section  VIII and each Option  granted
pursuant to Section VII shall be subject to the requirement  that if at any time
the Committee shall determine, in its discretion, that the listing, registration
or  qualification  of the Shares  granted  or  subject  to the  Option  upon any
securities  exchange  or under any state or federal  securities  or other law or
regulation,  or the consent or approval of any governmental  regulatory body, is
necessary or desirable as a condition to or in  connection  with the granting of
such Share,  such Option or the  issuance or purchase of Shares  thereunder,  no
such Share may be issued and no Option may be exercised or paid in Common Stock,
in whole or in part, unless such listing, registration,  qualification,  consent
or approval  shall have been  effected or obtained  free of any  conditions  not
acceptable to the Committee.  The holder of such Share or Option will supply the
Company with such certificates,  representations  and information as the Company
shall request and shall  otherwise  cooperate with the Company in obtaining such
listing, registration,  qualification, consent or approval. The Committee may at
any time impose any  limitations  upon the sale of a Share or the exercise of an
Option or the sale of the Common Stock  issued upon  exercise of an Option that,
in the  Committee's  discretion,  are  necessary or desirable in order to comply
with Section 16(b) of the

                                        10

<PAGE>



Exchange Act and the rules and regulations thereunder.  The Committee may at any
time  impose  additional  limitations,  or may  amend  or  delete  the  existing
limitations, upon the exercise of Options by the tender or withholding of Shares
in  accordance  with Section  VII.E  (including  an amendment or deletion of the
related  ownership  period  for  Shares  specified  in  such  Section),  if such
additional, amended or deleted limitations are necessary, desirable or no longer
required (as the case may be) to remain in compliance with applicable accounting
pronouncements  relating  to the  treatment  of the  plan  as a fixed  plan  for
accounting purposes.

         D.  Payment  of  Withholding  Tax.  Whenever  Shares  are to be  issued
pursuant to Section VI or Section  VIII of the Plan or upon  exercise of Options
issued  pursuant  to Section VII of the Plan,  the Company  shall be entitled to
require as a condition  of  delivery  (i) that the  participant  remit an amount
sufficient to satisfy all federal,  state and local withholding tax requirements
related thereto, (ii) the withholding of Shares due to the participant under the
Plan with a Fair Market Value equal to such amount,  or (iii) any combination of
the foregoing.

         E.  Expenses.  The expenses of the Plan shall be borne by the Company
and its Subsidiaries.

         F. Deemed Acceptance, Ratification and Consent. By accepting any Common
Stock hereunder or other benefit under the Plan, each Non-Employee  Director and
each person claiming under or through him or her shall be conclusively deemed to
have indicated his or her acceptance  and  ratification  of, and consent to, any
action taken under the Plan by the Company, the Board or the Committee.

         G.  Securities Act Registration. The Company shall use its best efforts
to cause to be filed under the Securities Act of 1933, as amended, a
registration statement covering the Shares issued, and issuable upon exercise
of options granted, under the Plan.

         H.  Governing Law.  The provisions of the Plan shall be governed by and
construed in accordance with the laws of the State of Delaware.

         I. Election Shares. Pending the grant of Election Shares hereunder, all
compensation earned by a Non-Employee Director with respect to which an election
to receive the grant of Election Shares pursuant to Section VIII.B has been made
shall be the  property of such  director and shall be paid to him or her in cash
in the event that Election Shares are not granted by the Company hereunder.

         J.  Headings; Construction.  Headings are given to the sections of the
Plan solely as a convenience to facilitate reference.  Such headings, numbering
and paragraphing shall not in any case be deemed tn any way material or relevant
to the construction of the Plan or any provisions hereof.  The use of the
singular shall also include within its meaning the plural, where appropriate,
and vice versa.


                                        11

<PAGE>


XI.      AMENDMENT.

         The Plan may be amended at any time and from time to time by resolution
of the Board as the Board  shall  deem  advisable;  provided,  however,  that no
amendment  shall  become  effective   without   stockholder   approval  if  such
stockholder  approval is  required  by law,  rule or  regulation;  and  provided
further,  that to the  extent  required  by Rule 16b-3  under  Section 16 of the
Exchange  Act,  Plan  provisions  shall not be amended  more than once every six
months,  except that the  foregoing  shall not preclude any amendment to comport
with  changes in the Code,  ERISA or the rules  thereunder.  No amendment of the
Plan shall  materially and adversely  affect any right of any  participant  with
respect to any Options or Shares theretofore granted under the Plan without such
participant's written consent, except for any modifications required to maintain
compliance with any federal or state statute or regulation.

XII.     TERMINATION.

         The Plan shall  terminate  upon the earlier of the  following  dates or
events to occur:

                  (i)   upon the adoption of a resolution of the Board
terminating the Plan; and

                  (ii) ten years  from the date the Plan is  initially  approved
         and  adopted by the  stockholders  of the  Company in  accordance  with
         Article XIII.

         Except as  specifically  provided  herein,  no  termination of the Plan
shall  materially  and adversely  affect any of the rights or obligations of any
person  without  his or her  consent  with  respect  to any  Options  or  Shares
theretofore granted under the Plan.

XIII.    STOCKHOLDER APPROVAL AND ADOPTION.

         The Plan is dated  March 12,  1996,  which is the date  upon  which the
Board adopted the Plan. The Plan shall be submitted to the  stockholders  of the
Company for their  approval and adoption at the meeting of  stockholders  of the
Company  to be held May 21,  1996.  The Plan shall not be  effective  unless and
until the Plan has been so  approved  and  adopted.  The  stockholders  shall be
deemed to have  approved and adopted the Plan only if it is approved and adopted
at a meeting of the  stockholders  duly held on that date (or any adjournment of
said  meeting  occurring  subsequent  to such  date) by vote taken in the manner
required by the laws of the State of Delaware.



                                        12

<PAGE>




                                                             Exhibit 5

                                                      THE ALLSTATE CORPORATION



                                                      2775 Sanders Road
                                                      Northbrook, Illinois
                                                                    60062-6127
                                                      ------------------------
                                                      Joseph T. Kane
                                                      Counsel



                                            May 31, 1996



The Allstate Corporation
Allstate Plaza
Northbrook, IL  60062

Ladies and Gentlemen:

         A  Registration  Statement on Form S-8  ("Registration  Statement")  is
being filed on or about the date of this letter with the Securities and Exchange
Commission to register  300,000 shares of common stock, par value $.01 per share
(the "Common Stock"), of The Allstate Corporation (the "Company") which may from
time to time be offered  in  connection  with The  Allstate  Corporation  Equity
Incentive  Plan  for  Non-Employee  Directors  (the  "Plan").  This  opinion  is
delivered in accordance  with the  requirements  of Item 601(b)(5) of Regulation
S-K under the Securities Act of 1933, as amended.

         In connection  with this opinion,  I have examined and am familiar with
originals or copies,  certified or otherwise  identified to my satisfaction,  of
(i) the Registration Statement,  ((ii) the Restated Certificate of Incorporation
of the  Company as  currently  in effect,  (iii) the  By-laws of the  Company as
currently  in effect,  and (iv)  resolutions  of the Board of  Directors  of the
Company  relating  to the  filing  of the  Registration  Statement  and  related
matters.  I have also  examined  originals  or copies,  certified  or  otherwise
identified  to my  satisfaction,  of such  records of the Company and such other
agreements,  instruments, and documents of the Company, and have made such other
investigations,  as I have deemed  necessary or  appropriate  as a basis for the
opinions set forth herein.

         I  have  assumed  the  legal  capacity  of  all  natural  persons,  the
genuineness of all signatures, the authenticity of all documents submitted to me
as originals, the conformity to



<PAGE>

original documents of all documents  submitted to me as certified to photostatic
copies and the authenticity of the originals of such latter documents. In making
my examination of documents  executed by parties other than the Company,  I have
assumed that such parties had the power, corporate and otherwise,  to enter into
and perform their  respective  obligations  thereunder and have also assumed the
due  authorization  by all requisite  action,  corporate and otherwise,  and the
execution  and delivery by such parties of such  documents  and the validity and
binding  effect  thereof.  As to any facts  material  to the  opinion  expressed
herein,  I have relied upon oral or written  statements and  representations  of
officers and other representatives of the Company and others.

         Based upon and  subject  to the  foregoing,  it is my opinion  that the
shares of Common Stock have been duly  authorized  and, when issued  pursuant to
the Plan, will be validly issued, fully paid and non-assessable.

         I  consent  to the  inclusion  of this  opinion  as an  exhibit  to the
Registration  Statement  referred  to above and to the  reference  to me in such
Registration Statement.


                                            Very truly yours,





                                            Joseph T. Kane




<PAGE>




                                                             Exhibit 15




The Allstate Corporation
Allstate Plaza
Northbrook, IL


We have  reviewed,  in accordance  with  standards  established  by the American
Institute of Certified  Public  Accountants,  the  unaudited  interim  financial
information  of The Allstate  Corporation  and  subsidiary for the periods ended
March 31, 1996 and 1995, as indicated in our report dated May 13, 1996;  because
we did not perform an audit, we expressed no opinion on that information.

We are aware that our  report  referred  to above,  which was  included  in your
Quarterly  Report on Form 10-Q for the quarter  ended March 31,  1996,  is being
used in this Registration Statement.

We are also aware that the aforementioned report,  pursuant to Rule 436(c) under
the  Securities  Act of  1933,  is not  considered  a part  of the  Registration
Statement  prepared  or  certified  by an  accountant  or a report  prepared  or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.

Deloitte & Touche LLP

Chicago, Illinois
May 30, 1996




<PAGE>

                                                             Exhibit 23(b)






                        INDEPENDENT AUDITORS' CONSENT



We consent to the incorporation by reference in this  Registration  Statement of
The  Allstate  Corporation  on Form S-8 of our  reports  dated  March  1,  1996,
appearing in and  incorporated by reference in the Annual Report on Form 10-K of
The Allstate Corporation for the year ended December 31, 1995.


Deloitte & Touche LLP

Chicago, Illinois
May 30, 1996


<PAGE>
[{"type": "S-8", "sequence": "1", "description": "THE ALLSTATE CORPORATION", "secsgml_size_bytes": 67376}]
{"company-data": {"conformed-name": "ALLSTATE CORP", "cik": "0000899051", "assigned-sic": "6351", "irs-number": "363871531", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-04919", "film-number": "96575568"}, "business-address": {"street1": "ALLSTATE PLZ", "city": "NORTHBROOK", "state": "IL", "zip": "60062", "phone": "7084026075"}, "mail-address": {"street1": "1209 ORANGE STREET", "city": "NEW CASTLE COUNTY", "state": "DE", "zip": "19801"}}
As filed with the Securities and Exchange Commission on May 31, 1996
                                                      Registration No. ________

===============================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                         -------------------------------

                                    FORM S-8
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933

                            THE ALLSTATE CORPORATION
               (Exact Name of Issuer as Specified in its Charter)

    DELAWARE                                          36-3871531
(State of Incorporation)                 (I.R.S. Employer Identification No.)

                                Allstate Plaza
                         Northbrook, Illinois  60062
            (Address and Zip Code of principal executive offices)

                            THE ALLSTATE CORPORATION
                EQUITY INCENTIVE PLAN FOR NON-EMPLOYEE DIRECTORS
                           (Full title of the Plan)
                                 -------------

                                 ROBERT W. PIKE
                  Vice President, Secretary and General Counsel
                             The Allstate Corporation
                                Allstate Plaza
                         Northbrook, Illinois  60062
                                (708) 402-6075
          (Name, address, and telephone number of agent for service)
                                --------------
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
Proposed                    Proposed
       Title of                                             Maximum                     Maximum
      Securities                  Amount                   Offering                    Aggregate                Amount of
         to be                     to be                     Price                     Offering               Registration
      Registered                Registered                Per Share (1)                 Price (1)                 Fee
      ----------                ----------                ---------                     -----                     ---

Common                            300,000                  $41.6875                   $12,506,250             $4,312.53
Stock, par                        shares
value $.01 per
share

================================================================================
(1)      Estimated pursuant to Rule 457(h) solely for the purpose of calculating
         the aggregate  offering  price and the amount of the  registration  fee
         based  upon the  average of the high and low  prices  reported  for the
         shares on the New York Stock Exchange on May 29, 1996.
- 2 -
PART I

                  INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS

                  The documents containing information specified in Part I (plan
information  and registrant  information)  will be sent or given to directors of
The Allstate  Corporation  ("Allstate" or the "Company") eligible to participate
in Allstate's  Equity Incentive Plan for Non-Employee  Directors (the "Plan") as
specified by Rule  428(b)(1)  under the  Securities Act of 1933, as amended (the
"Securities  Act").  Such  documents  need not be filed with the  Securities and
Exchange  Commission  (the  "Commission")  either  as part of this  Registration
Statement or as  prospectuses  or  prospectus  supplements  pursuant to Rule 424
under the Securities  Act.  These  documents and the documents  incorporated  by
reference in this Registration  Statement  pursuant to Item 3 of Part II of this
Registration Statement,  taken together,  constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act.

                                    - 3 -
PART II

              INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3:  INCORPORATION OF DOCUMENTS BY REFERENCE

         The  following  documents  filed by Allstate  with the  Commission  are
incorporated in and made a part of this Registration Statement by reference,  as
of their respective dates:

         (1)  Allstate's  Annual  Report on Form 10-K for the fiscal  year ended
         December 31, 1995 and Allstate's  Proxy  Statement dated March 30, 1996
         relating to the Annual Meeting of Stockholders on May 21, 1996 at which
         the Plan was approved;

         (2) Allstate's Quarterly Report on Form 10-Q for the quarter ended
         March 31, 1996;

         (3) the  description  of  Allstate's  common  shares  under the caption
         "Description of Capital Stock" contained in Allstate's prospectus dated
         June 2, 1993,  filed with the  Commission  on June 4, 1993  pursuant to
         Rule  424(b)  under  the  Securities  Act  and  deemed  to be a part of
         Allstate's Registration Statement on Form S-1 (File No. 33- 59676); and

         (4) from the date of filing of such  documents,  all documents filed by
         Allstate with the Commission  pursuant to Section 13(a),  13(c),  14 or
         15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
         Act"),  subsequent to the date of this Registration Statement and prior
         to the  filing  of a  post-effective  amendment  to  this  Registration
         Statement which indicates that all securities  offered hereby have been
         sold or which deregisters all securities then remaining unsold.

         Any  statement  contained  in a document  incorporated  or deemed to be
incorporated  by reference  herein shall be deemed to be modified or  superseded
for  purposes  of this  Registration  Statement  to the extent  that a statement
contained  herein or in any  subsequently  filed  document  which  also is or is
deemed  to be  incorporated  by  reference  herein  modifies  or  replaces  such
statement.  Except as so modified or  superseded,  such  statement  shall not be
deemed to constitute a part of this Registration Statement.

ITEM 4:  DESCRIPTION OF SECURITIES

         Not applicable.

ITEM 5:  INTERESTS OF NAMED EXPERTS AND COUNSEL

                                    - 4 -
The validity of the Company's Common Stock being registered  hereby has
been  passed  upon by Joseph T.  Kane,  Counsel,  Corporate  Law  Department  of
Allstate Insurance Company, a wholly-owned subsidiary of the Company.

ITEM 6:  INDEMNIFICATION OF DIRECTORS AND OFFICERS

         Section 145 of the Delaware General Corporation Law (the "DGCL"), inter
alia,  empowers a Delaware  corporation  to indemnify any person who was or is a
party  or is  threatened  to be  made a  party  to any  threatened,  pending  or
completed action, suit or proceeding (other than an action by or in the right of
the  corporation)  by reason of the fact that such  person is or was a director,
officer,  employee  or  agent of the  corporation  or is or was  serving  at the
request of the corporation as a director,  officer, employee or agent of another
corporation or other enterprise,  against expenses (including  attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in  connection  with such action,  suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests  of the  corporation,  and,  with  respect to any  criminal  action or
proceeding, had no reasonable cause to believe his conduct was unlawful. Similar
indemnity is authorized for such persons against expenses (including  attorneys'
fees)  actually  and  reasonably  incurred  in  connection  with the  defense or
settlement of any such  threatened,  pending or completed action or suit if such
person  acted in good faith and in a manner he  reasonably  believed to be in or
not opposed to the best interests of the corporation,  and provided further that
(unless a court of competent  jurisdiction otherwise provides) such person shall
not have been adjudged liable to the corporation.  Any such  indemnification may
be made only as authorized in each  specific  case upon a  determination  by the
shareholders  or  disinterested  directors or by independent  legal counsel in a
written  opinion that  indemnification  is proper because the indemnitee has met
the applicable standard of conduct.

         Section 145 further  authorizes a corporation  to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director,  officer, employee or agent of another corporation or enterprise,
against  any  liability  asserted  against  him and  incurred by him in any such
capacity,  or arising out of his status as such,  whether or not the corporation
would  otherwise  have the power to indemnify him under Section 145. The Company
maintains  policies  insuring its and its  subsidiaries'  officers and directors
against  certain  liabilities  for actions taken in such  capacities,  including
liabilities under the Securities Act.

         Article IV of the By-laws of the Company  provides for  indemnification
of the directors and officers of the Company to the fullest extent  permitted by
law, as now in effect or later  amended.  In addition,  the By-laws  provide for
indemnification against expenses incurred by a director or officer to be paid by
the  Company  in  advance  of the  final  disposition  of such  action,  suit or

                                    - 5 -
proceeding; provided, however, that an advancement of expenses will be made only
upon  receipt of an  undertaking  by or on behalf of the  director or officer to
repay such amount unless it shall be ultimately  determined  that he is entitled
to be indemnified by the Company.  The By-laws further provide for a contractual
cause of  action on the part of  directors  and  officers  of the  Company  with
respect to indemnification claims which have not been paid by the Company.

         The Company also has provided liability insurance for each director and
officer for certain  losses  arising  from claims or charges  made  against them
while acting in their capacities as directors or officers of the Company.

         Article Ninth of the Company's  Restated  Certificate of  Incorporation
limits,  to the fullest extent  permitted by the DGCL, as the same exists or may
be amended,  the personal liability of the Company's directors to the Company or
its  stockholders  for monetary  damages for a breach of their fiduciary duty as
directors. Section 102(b)(7) of the DGCL currently provides that such provisions
do not eliminate the liability of a director (i) for a breach of the  director's
duty of loyalty to the Company or its  stockholders,  (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law,  (iii) under  Section 174 of the DGCL  (relating to the  declaration  of
dividends  and purchase or  redemption  of shares in violation of the DGCL),  or
(iv) for any transaction  from which the director  derived an improper  personal
benefit.

ITEM 7:  EXEMPTION FROM REGISTRATION CLAIMED

         Not applicable.

ITEM 8:  EXHIBITS

         The Exhibits to this  Registration  Statement are listed in the Exhibit
Index of this  Registration  Statement,  which Index is  incorporated  herein by
reference.

ITEM 9:  UNDERTAKINGS

         The Company hereby undertakes:

         (1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:

                  (i)      to include any prospectus required by Section 10(a)
                           (3) of the Securities Act;

                                    - 6 -
(ii)     to  reflect  in the  prospectus  any  facts or events
                           arising after the effective date of the  Registration
                           Statement   (or  the   most   recent   post-effective
                           amendment  thereof)  which,  individually  or in  the
                           aggregate,  represent  a  fundamental  change  in the
                           information set forth in the Registration Statement;

                  (iii)    to include any material  information  with respect to
                           the plan of distribution not previously  disclosed in
                           the Registration  Statement or any material change to
                           such information in the Registration Statement;

provided,  however,  that  paragraphs  (1)(i)  and  (1)(ii)  do not apply if the
information  required  to be  included in a  post-effective  amendment  by those
paragraphs  is contained in periodic  reports  filed by the Company  pursuant to
Section  13 or  Section  15(d) of the  Exchange  Act that  are  incorporated  by
reference in this Registration Statement

         (2) That,  for the  purpose  of  determining  any  liability  under the
Securities Act, each such  post-effective  amendment shall be deemed to be a new
registration  statement  relating to the  securities  offered  therein,  and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

         (3) To remove from registration by means of a post-effective  amendment
any of the securities being registered which remain unsold at the termination of
the offering.

         The Company hereby  undertakes  that,  for purposes of determining  any
liability under the Securities  Act, each filing of the Company's  annual report
pursuant  to  Section  13(a)  or  Section  15(d)  of the  Exchange  Act  that is
incorporated by reference in the Registration  Statement shall be deemed to be a
new registration  statement relating to the securities offered therein,  and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

         Insofar as indemnification for liabilities arising under the Securities
Act may be  permitted to  directors,  officers  and  controlling  persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Commission  such  indemnification  is against
public  policy  as  expressed  in  the   Securities   Act  and  is,   therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by the Company of expenses incurred or
paid  by a  director,  officer  or  controlling  person  of the  Company  in the
successful  defense of any  action,  suit or  proceeding)  is  asserted  by such
director,  officer or controlling person in connection with the securities being
registered,  the Company  will,  unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as  expressed  in the  Securities  Act and will be  governed by the final
adjudication of such issue.

                                    - 7 -
SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, the Company
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in Cook County, State of Illinois, on May 21, 1996.

                           THE ALLSTATE CORPORATION

                                        By: /s/Robert W. Pike
                                        Name:  Robert W. Pike
                                        Title: Vice President, Secretary
                                                and General Counsel

         Pursuant to the requirements of the Securities Act of 1933, this report
has been signed below by the  following  persons on behalf of the  Registrant in
the capacities and on the dates indicated.  Each person whose signature  appears
below  constitutes  and appoints Jerry D. Choate,  Edward M. Liddy and Robert W.
Pike, and each of them, his true and lawful attorney-in-fact and agent with full
power of substitution  and  resubstitution,  for him and in his name,  place and
stead,  in any  and  all  capacities,  to  sign  any or all  amendments  to this
Registration  Statement,  and to file the same, with all exhibits  thereto,  and
other  documents  in  connection  therewith,  with the  Securities  and Exchange
Commission,  granting  unto said  attorneys-in-fact  and  agents  full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person,  thereby  ratifying  and  confirming  all that said
attorneys-in-fact and agents, or their substitutes,  may lawfully do or cause to
be done by virtue hereof.
SIGNATURE                           TITLE                                                    DATE
/s/Jerry D. Choate                  Director, Chairman of the Board of                       May 21, 1996
- ------------------
Jerry D. Choate                     Directors, and Chief Executive Officer
                                    (Principal Executive Officer)
- 8 -
/s/Thomas J. Wilson                 Vice President and Chief Financial                       May 21, 1996
- -------------------
Thomas J. Wilson                    Officer (Principal Financial Officer)

- -------------------------------------------------------------------------------
/s/Samuel H. Pilch                  Controller (Principal Accounting Officer)                May 21, 1996
- ------------------
Samuel H. Pilch

- -------------------------------------------------------------------------------
/s/James G. Andress                 Director                                                 May 21, 1996
James G. Andress

- -------------------------------------------------------------------------------
/s/Warren L. Batts                  Director                                                 May 21, 1996
Warren L. Batts

- -------------------------------------------------------------------------------
/s/Edward A. Brennan                Director                                                 May 21, 1996
Edward A. Brennan

- -------------------------------------------------------------------------------
/s/James M. Denny                   Director                                                 May 21, 1996
James M. Denny

- -------------------------------------------------------------------------------
/s/Christopher F. Edley             Director                                                 May 21, 1996
Christopher F. Edley

- -------------------------------------------------------------------------------
/s/William E. LaMothe               Director                                                 May 21, 1996
William E. LaMothe

- -------------------------------------------------------------------------------
/s/Michael A. Miles                 Director                                                 May 21, 1996
Michael A. Miles

- -------------------------------------------------------------------------------
/s/Nancy C. Reynolds                Director                                                 May 21, 1996
Nancy C. Reynolds

- -------------------------------------------------------------------------------
/s/Mary Alice Taylor                Director                                                 May 21, 1996
Mary Alice Taylor
- -------------------------------------------------------------------------------
- 9 -
Exhibit                             EXHIBIT INDEX                                    Sequentially
Number                                                                               Numbered Page
                                                                                     -------------

                                    Description of Exhibit
                                    ----------------------
4(a)              Restated   Certificate   of   Incorporation   of  the  Company
                  (incorporated  by reference  to Exhibit 3(a) of the  Company's
                  Quarterly  Report on Form 10-Q for the quarter ended September
                  30, 1995).

4(b)              By-Laws of the Company  (incorporated  by reference to Exhibit
                  3(b) of the Company's  Annual Report on Form 10-K for the year
                  ended December 31, 1995).

4(c)              The Allstate Corporation Equity Incentive Plan for
                  Non-Employee Directors.

5                 Opinion of Joseph T. Kane.

15                Acknowledgment of Deloitte & Touche LLP
                  regarding unaudited interim financial
                  information.

23(a)             Consent of Joseph T. Kane (included in Exhibit 5).

23(b)             Consent of Deloitte & Touche LLP.

28                Information from Reports Furnished to State Insurance
                  Regulatory Authorities (incorporated by reference to Exhibit
                  28 of the Company's Annual Report on Form 10-K for the year
                  ended December 31, 1995).
E-1
Exhibit 4(c)

                           THE ALLSTATE CORPORATION

               EQUITY INCENTIVE PLAN FOR NON-EMPLOYEE DIRECTORS

I.       PURPOSE.

         The  purpose of The  Allstate  Corporation  Equity  Incentive  Plan for
Non-Employee  Directors (the "Plan") is to promote the interests of The Allstate
Corporation  (the "Company") by providing an inducement to obtain and retain the
services of  qualified  persons as members of the  Company's  Board of Directors
(the  "Board") and to align more closely the  interests of such persons with the
interests of the Company's  stockholders  by providing a significant  portion of
the  compensation  provided to such persons in the form of equity  securities of
the Company.

II.      ADMINISTRATION.

         The Plan shall be  administered  by the Committee.  The Committee shall
have full power to  construe  and  interpret  the Plan and  Shares  and  Options
granted  hereunder,  to establish and amend rules for its  administration and to
correct any defect or omission and to reconcile any inconsistency in the Plan or
in any Share or Option  granted  hereunder  to the  extent the  Committee  deems
desirable  to carry  the Plan or any  Share or  Option  granted  hereunder  into
effect.  Any decisions of the Committee in the  administration of the Plan shall
be final and  conclusive.  The  Committee  may  authorize any one or more of its
members, the secretary of the Committee or any officer of the Company to execute
and deliver documents on behalf of the Committee.  Each member of the Committee,
and, to the extent provided by the Committee, any other person to whom duties or
powers shall be delegated in connection with the Plan,  shall incur no liability
with  respect to any action taken or omitted to be take in  connection  with the
Plan and shall be fully  protected  in  relying in good faith upon the advice of
counsel, to the fullest extent permitted under applicable law.

III.     ELIGIBILITY.

         Each  Non-Employee  Director  shall be eligible to  participate  in the
Plan.

IV.      LIMITATION ON AGGREGATE SHARES.

         A. Maximum  Number of Shares.  The aggregate  maximum  number of Shares
that may be granted  pursuant  to the Plan or issued  upon  exercise  of Options
granted  pursuant to the Plan shall be 300,000  shares.  Such maximum  number of
Shares is subject to adjustment under the provisions of Section IV.B. The Shares
to be granted or issued upon exercise of Options may be authorized  but unissued
Shares or Shares previously issued which have been reacquired by the Company. In
the event any Option or Reload Option shall, for any reason, terminate or expire
or be  surrendered  without having been exercised in full, the Shares subject to
such Option or Reload Option but not
purchased  thereunder shall be available for future Options or Reload Options to
be granted under the Plan.

         B.       Adjustment.  The  maximum  number  of  Shares  referred  to in
Section IV.A of the Plan, the number of Shares granted pursuant to Section VI of
the Plan, the number of Options granted pursuant to Section VII of the Plan, and
the  option  price and the  number of Shares  which may be  purchased  under any
outstanding   Option   granted   under   Section   VII  of  the  Plan  shall  be
proportionately  adjusted  for any  increase or decrease in the number of issued
and  outstanding  Shares as the result of (i) the  declaration  and payment of a
dividend  payable  in  Common  Stock,  or  the  division  of  the  Common  Stock
outstanding at the date hereof (or the date of the grant of any such outstanding
Option,  as  applicable)  into a greater number of Shares without the receipt of
consideration  therefor by the Company,  or any other  increase in the number of
such  Shares of the Company  outstanding  at the date hereof (or the date of the
grant of any such outstanding  Option, as applicable) which is effective without
the receipt of  consideration  therefor by the Company  (exclusive of any Shares
granted by the Company to  employees  of the Company or any of its  Subsidiaries
without  receipt  of  separate  consideration  by  the  Company),  or  (ii)  the
consolidation  of the Shares  outstanding at the date hereof (or the date of the
grant of any such  outstanding  Option,  as applicable) into a smaller number of
Shares without the payment of consideration thereof by the Company, or any other
decrease  in the number of such  Shares  outstanding  at the date hereof (or the
date of the  grant of any  such  outstanding  Option,  as  applicable)  effected
without the payment of consideration by the Company; provided, however, that the
total option  price for all Shares  which may be purchased  upon the exercise of
any Option granted  pursuant to the Plan (computed by multiplying  the number of
Shares originally purchasable  thereunder,  reduced by the number of such Shares
which have theretofore been purchased  thereunder,  by the original option price
per share  before  any of the  adjustments  herein  provided  for)  shall not be
changed.

         In the event of a change in the Common Stock as  presently  constituted
which is limited to a change of the Company's authorized shares with a par value
into the same number of shares with a different  par value or without par value,
the shares  resulting from any such change will be deemed to be the Common Stock
within the meaning of this Plan and no adjustment  will be required  pursuant to
this Section IV.B.

         The  foregoing  adjustments  shall  be  made  by the  Committee,  whose
determination in that respect shall be final, binding and conclusive.  Except as
expressly  provided in this Section IV.B, a Non-Employee  Director shall have no
rights by reason of any subdivision or  consolidation  of shares of stock of any
class or the payment of any stock  dividend or any other increase or decrease in
the number of shares of stock of any class.

V.       DEFINITIONS.

         The  following  terms shall have the meanings set forth below when used
herein:

         "Code" means the Internal Revenue Code of 1986, as amended.

                                       2
"Committee"  means the  Compensation  and  Nominating  Committee of the
Board, any successor  committee of the Board performing similar functions or, in
the absence of such a committee, the Board.

         "Common Stock" means the Common Stock, par value $.01 per share, of the
Company.

         "Disability" means a mental or physical condition which, in the opinion
of the Committee, renders a Non-Employee Director unable or incompetent to carry
out his or her  duties as a member of the  Board  and  which is  expected  to be
permanent or for an indefinite duration.

         "Election  Shares" means any Shares issued to a  Non-Employee  Director
pursuant to the  election of such person to receive  such Shares in lieu of cash
compensation made in accordance with Section VIII.B.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Fair Market Value" of any Share means, as of any applicable  date, the
mean  between  the high and low prices of the Shares as reported on the New York
Stock  Exchange-Composite  Tape, or if no such reported sale of the Shares shall
have occurred on such date, on the next  succeeding date on which there was such
a reported sale.

         "Initial  Election Date" means,  for each  Non-Employee  Director,  the
later to occur of (i) the date the Plan is approved and adopted by the Company's
stockholders  pursuant  to Section  XIII of the Plan,  and (ii) the date of such
member's initial election or appointment to the Board.

         "Non-Employee  Director"  means each  member of the Board who is not an
officer or employee of the Company or any of its Subsidiaries.

         "Option" means an option to purchase shares of Common Stock.

         "Shares" means shares of Common Stock.

         "Subsidiary" means any partnership,  corporation,  association, limited
liability company,  joint stock company,  trust,  joint venture,  unincorporated
organization or other business entity of which (i) if a corporation,  a majority
of the total voting  power of shares of stock  entitled  (without  regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled,  directly or indirectly, by
the  Company  or one or more  of the  other  Subsidiaries  of the  Company  or a
combination  thereof, or (ii) if a partnership,  association,  limited liability
company, joint stock company, trust, joint venture,  unincorporated organization
or other business  entity, a majority of the partnership or other similar equity
ownership  interest  thereof is at the time  owned or  controlled,  directly  or
indirectly, by the Company or one or more

                                       3
Subsidiaries of the Company or a combination  thereof.  For purposes hereof, the
Company or a Subsidiary shall be deemed to have a majority ownership interest in
a partnership,  association,  limited  liability  company,  joint stock company,
trust,  joint venture,  unincorporated  organization or other business entity if
the Company or such  Subsidiary  shall be  allocated a majority of  partnership,
association,  limited  liability  company,  joint stock  company,  trust,  joint
venture, unincorporated organization or other business entity gains or losses or
shall be or control  the  managing  director,  the  trustee,  the manager or the
general partner of such partnership,  association,  limited  liability  company,
joint stock company, trust, joint venture,  unincorporated organization or other
business entity.

VI.      FORMULA RESTRICTED STOCK GRANTS FOR NON-EMPLOYEE DIRECTORS.

         A.       Annual  Grant  of  Shares.  Beginning  December  1,  1996,  on
December  1 of each year 500  Shares  shall  automatically  be  granted  to each
Non-Employee  Director  serving on the Board on such date who has served in such
capacity  since June 1 of such year.  If any person  serving as a Non-  Employee
Director  on June 1 of any year  ceases to serve as a  director  of the  Company
prior to December 1 of such year, such director shall be  automatically  granted
on his or her last day of service a number of Shares equal to (i) 500 multiplied
by (ii) a fraction, the numerator of which is the number of full calendar months
such  Non-Employee  Director has served on the Board during the period beginning
on such  June 1 and  ending on such  director's  last  date of  service  and the
denominator of which is 6.

         B.       Grant for Newly Appointed  Directors.  If after June 1, 1996 a
Non-Employee  Director is initially  elected or appointed to the Board effective
on any date other than June 1, such Non- Employee  Director shall  automatically
be granted,  on the June 1 following the date he or she joins the Board (or such
earlier  date as he or she  ceases to serve as a  director),  a number of Shares
equal to (i) 500  multiplied  by (ii) a fraction,  the numerator of which is the
number of full  calendar  months such  Non-Employee  Director  has served on the
Board during the period beginning on the date such director joined the Board and
ending on the  following  May 31 (or such  earlier  date as he or she  ceases to
serve as a  director)  and the  denominator  of which is 6;  provided  that such
fraction shall in no event be greater than one.

         C.       Transition   Grant  for   Existing   Directors.   Subject   to
stockholder  approval and adoption  pursuant to Section XIII of the Plan, on May
31, 1996, each  Non-Employee  Director who was serving on the Board on March 12,
1996  shall  be  automatically  granted  a  number  of  Shares  equal to (i) 200
multiplied  by (ii) a  fraction,  the  numerator  of which is the number of full
calendar  months of  service  by such  Non-Employee  Director  during the period
beginning on the later of (a) such director's last  anniversary date for service
on the  Board  and (b) the date  such  director  first  attained  the  status of
Non-Employee  Director  and ending on May 31, 1996 (or such earlier date as such
director ceases to serve as a director) and the denominator of which is 12.

                                       4
D.       Rounding of Share Amounts.  To the extent that  application of
the foregoing  formulas would result in fractional  Shares being issuable,  such
Non-Employee  Director  shall be granted a number of Shares equal to the nearest
whole number of Shares.

         E.       Payment for Estimated  Taxes.  In addition,  the Company shall
pay to each Non- Employee  Director,  in cash, as soon as practicable after each
issuance of Shares pursuant to this Section VI, an amount equal to the estimated
increase  in  such  Non-Employee   Director's  federal,   state  and  local  tax
liabilities as a result of such grant of Shares,  assuming the maximum statutory
tax rates applicable to such Non-Employee Director.

         F.       Restrictions.  The Non-Employee Directors shall have no rights
as a  shareholder  with  respect to any Shares to be  granted  pursuant  to this
Section  VI prior to the time such  Shares are  granted.  Upon such  grant,  the
Shares shall be represented by a stock certificate registered in the name of the
holder.  The Shares  granted  pursuant to this Section VI shall be fully vested,
but shall be  subject  to  certain  restrictions  during  the six  month  period
following the date of grant (the  "Restriction  Period").  The holder shall have
the  right to  enjoy  all  shareholder  rights  during  the  Restriction  Period
(including  the right to vote the Shares  and the right to  receive  any cash or
other dividends paid in respect  thereof) with the exception that (i) the holder
may not sell,  transfer,  pledge or assign  the Shares  during  the  Restriction
Period,   and  (ii)  the  Company  shall  retain  custody  of  the  certificates
representing the Shares during the Restriction Period.

         All  restrictions  shall  lapse and the holder of the  Shares  shall be
entitled to the delivery of a stock certificate or certificates representing the
Shares  (and  to the  removal  of any  restrictive  legend  set  forth  on  such
certificates) upon the earliest of (i) six months from the date of grant of such
Shares, (ii) the date of the holder's death or Disability, and (iii) the date on
which the holder is no longer serving as a director of the Company.

VII.     FORMULA STOCK OPTION GRANTS FOR NON-EMPLOYEE DIRECTORS.

         A.   Annual Grant of Options. On June 1 of each year, beginning June 1,
1996,  Options to purchase 1,500 Shares shall  automatically  be granted to each
Non-Employee   Director  serving  on  the  Board  on  such  date.  If  any  such
Non-Employee  Director  will be required to retire  (pursuant to the policies of
the Board) during the 12 month period  beginning on the date of any grant (or if
any such Non-Employee  Director has notified the Board that he or she intends to
resign from the Board for any reason during the 12 month period beginning on the
date of any  grant),  such  director  shall  instead be granted on June 1 of the
relevant  year  Options  to  purchase  a number  of Shares  equal to (i)  1,500,
multiplied  by (ii) a  fraction,  the  numerator  of which is the number of full
calendar  months such  Non-Employee  Director will serve on the Board during the
period  beginning  on such  June 1 and  ending on such  director's  last date of
service and the denominator of which is 12.

         B.       Grant for Newly Appointed  Directors.  If after June 1, 1996 a
Non-Employee  Director is initially  elected or appointed to the Board effective
on any date other than June 1, such Non- Employee  Director shall  automatically
be granted, on the date he or she joins the Board, Options to

                                       5
purchase a number of Shares equal to (i) 1,500,  multiplied  by (ii) a fraction,
the numerator of which is the number of full calendar  months such  Non-Employee
Director  will serve on the Board  during the period  beginning on the date such
director joins the Board and ending on the following May 31 and the  denominator
of which is 12.

         C.       Option Exercise  Price.  The exercise price per Share for each
Option  shall be 100% of the Fair Market  Value of a Share on the date of grant,
subject to Section IV.B.

         D.       Term of Options.  Each Option shall be exercisable for ten
years after the date of grant, subject to Section VII.F.

         E.       Conditions and Limitations on Exercise.

                  (i)   Vesting.   Each   Option   shall  vest  in  three  equal
         installments on the first,  second and third  anniversaries of the date
         of grant. Upon a Non-Employee  Director's mandatory retirement pursuant
         to the policies of the Board, the unvested  portions of any outstanding
         Options held by such  Non-Employee  Director shall fully vest. Upon the
         termination of a Non-Employee  Director's  tenure for any other reason,
         the unvested  portions of any  outstanding  Options shall expire and no
         Options  granted  to such  Non-Employee  Director  shall vest after the
         termination of such director's tenure on the Board.

                  (ii) Exercise. Each Option shall be exercisable in one or more
         installments  and shall not be  exercisable  for less than 100  Shares,
         unless the exercise represents the entire remaining exercisable balance
         of a grant or grants. Each Option shall be exercised by delivery to the
         Company of written  notice of intent to  purchase a specific  number of
         Shares  subject to the  Option.  The  option  price of any Shares as to
         which an Option shall be exercised shall be paid in full at the time of
         the  exercise.  Payment  may,  at  the  election  of  the  Non-Employee
         Director, be made in any one or any combination of the following forms:

                       (a)          check or wire transfer of funds in such form
as may be satisfactory to the Committee;

                       (b) delivery of Shares  valued at their Fair Market Value
                  on the date of  exercise  or, if the date of exercise is not a
                  business day, the next succeeding business day;

                       (c)          through  simultaneous  sale through a broker
                  of  unrestricted  Shares  acquired on  exercise,  as permitted
                  under Regulation T of the Federal Reserve Board; or

                       (d) by  authorizing  the  Company  in his or her  written
                  notice of  exercise  to  withhold  from  issuance  a number of
                  Shares  issuable  upon  exercise  of such Option  which,  when
                  multiplied  by the Fair  Market  Value of Common  Stock on the
                  date of

                                       6
exercise  (or, if the date of exercise is not a business  day,
                  the next  succeeding  business day), is equal to the aggregate
                  exercise   price   payable  with  respect  to  the  Option  so
                  exercised.

         In the event a Non-Employee  Director  elects to pay the exercise price
payable with respect to an Option pursuant to clause (b) above, (i) only a whole
number of Share(s) (and not fractional Shares) may be tendered in payment,  (ii)
such Non-Employee  Director must present evidence acceptable to the Company that
he or she has owned any such Shares  tendered in payment of the  exercise  price
(and that such Shares tendered have not been subject to any substantial  risk of
forfeiture) for at least six months prior to the date of exercise, and (iii) the
certificate(s)  for all such Shares  tendered in payment of the  exercise  price
must  be  accompanied  by  duly  executed  instruments  of  transfer  in a  form
acceptable to the Company.  When payment of the Option exercise price is made by
the tender of Shares,  the difference,  if any,  between the aggregate  exercise
price  payable with respect to the Option  being  exercised  and the Fair Market
Value of the Share(s)  tendered in payment (plus any applicable  taxes) shall be
paid by check or wire  transfer of funds.  No  Non-Employee  Director may tender
Shares having a Fair Market Value exceeding the aggregate exercise price payable
with respect to the Option being exercised.

         In the event a Non-Employee  Director  elects to pay the exercise price
payable with respect to an Option pursuant to clause (d) above, (i) only a whole
number of Share(s)  (and not  fractional  Shares) may be withheld in payment and
(ii) such Non-Employee  Director must present evidence acceptable to the Company
that he or she has  owned a number of  Shares  at least  equal to the  number of
Shares to be  withheld  in  payment of the  exercise  price (and that such owned
Shares have not been subject to any substantial risk of forfeiture) for at least
six months  prior to the date of exercise.  When payment of the Option  exercise
price is made by the withholding of Shares, the difference,  if any, between the
aggregate  exercise price payable with respect to the Option being exercised and
the Fair Market Value of the Share(s)  withheld in payment (plus any  applicable
taxes)  shall  be paid by check  or wire  transfer  of  funds.  No  Non-Employee
Director may  authorize  the  withholding  of Shares  having a Fair Market Value
exceeding the aggregate  exercise price payable with respect to the Option being
exercised. Any withheld Shares shall no longer be issuable under such Option.

         F.       Additional Provisions.

                  (i)  Accelerated  Expiration  of Options Upon  Termination  of
         Directorship.  Upon the termination of a Non-Employee Director's tenure
         for any reason,  each  outstanding  vested and  previously  unexercised
         Option shall  expire  three months after the date of such  termination;
         provided that (a) upon the  termination  of a  Non-Employee  Director's
         tenure as a result of death or Disability,  each outstanding vested and
         previously  unexercised Option shall expire two years after the date of
         his or her  termination  as a  director,  and (b)  upon  the  mandatory
         retirement of a Non-Employee  Director  pursuant to the policies of the
         Board, each outstanding vested and previously  unexercised Option shall
         expire  five  years  after  the  date  of his or her  termination  as a
         director.  In no event  shall  the  provisions  of this  Section  VII.F
         operate to extend the original expiration date of any Option.

                                       7
(ii)  Sale of the  Company.  In the  event of a merger  of the
         Company  with or into  another  corporation  constituting  a change  of
         control  of the  Company,  a sale  of all or  substantially  all of the
         Company's  assets or a sale of a majority of the Company's  outstanding
         voting securities (a "Sale of the Company"), the Options may be assumed
         by the successor  corporation or a parent of such successor corporation
         or substantially equivalent options may be substituted by the successor
         corporation  or a  parent  of such  successor  corporation,  and if the
         successor  corporation  does  not  assume  the  Options  or  substitute
         options,  then  all  outstanding  and  unvested  Options  shall  become
         immediately  exercisable and all outstanding Options shall terminate if
         not  exercised  as of the date of the  Sale of the  Company  (or  other
         prescribed  period of time). The Company shall provide at least 30 days
         prior  written  notice of the Sale of the Company to the holders of all
         outstanding  Options,  which notice shall state whether (a) the Options
         will  be  assumed  by  the  successor   corporation  or   substantially
         equivalent options will be substituted by the successor corporation, or
         (b)  the  Options  are  thereafter  vested  and  exercisable  and  will
         terminate  if not  exercised  as of the date of the Sale of the Company
         (or other prescribed period of time).

                  (iii)  Liquidation  or  Dissolution.   In  the  event  of  the
         liquidation  or  dissolution  of the Company,  Options shall  terminate
         immediately prior to the liquidation or dissolution.

         G. Grant of Reload Options.  A Non-Employee  Director who exercises all
or any portion of an Option by the tender or  withholding of Shares which have a
Fair  Market  Value equal to not less than 100% of the  exercise  price for such
Options (the "Exercised  Options")  shall be granted,  subject to Section IV, an
additional option (a "Reload Option") for a number of Shares equal to the sum of
the number of Shares  tendered or withheld in payment of the exercise  price for
the Exercised Options.

         Reload Options shall be subject to the following terms and conditions:

                  (i)   the grant date for each Reload Option shall be the date
of exercise of the Exercised Option to which it relates;

                  (ii) subject to clause (iii) below,  the Reload  Option may be
         exercised at any time during the unexpired term of the Exercised Option
         (subject to earlier termination thereof as provided in the Plan); and

                  (iii) the other terms of the Reload  Option  shall be the same
         as the terms of the  Exercised  Option to which it relates and shall be
         subject to the provisions of the Plan, except that (a) the option price
         shall be the Fair  Market  Value of the Shares on the grant date of the
         Reload Option,  (b) no Reload Option may be exercised within six months
         from the grant date  thereof,  and (c) no other Reload  Option shall be
         granted upon exercise of such Reload Option.

                                       8
H.       Non-Qualified  Stock  Options.  All Options  granted under the
Plan shall be non-qualified  options not entitled to special tax treatment under
Code Section 422, as may be amended from time to time.

VIII.    ELECTION TO RECEIVE STOCK IN LIEU OF CASH COMPENSATION.

         A.       General. A Non-Employee  Director may elect to reduce the cash
compensation  otherwise  payable for  services to be rendered by him or her as a
director for any period  beginning on June 1 and continuing to the following May
31 (or such other period for which cash  compensation is payable to Non-Employee
Directors pursuant to the policies of the Board),  beginning June 1, 1996 and to
receive in lieu thereof Shares as provided in this Section VIII.

         B.  Election.  By the later of (i) the November 30 preceding the June 1
to which such election  relates and (ii) such  Non-Employee  Director's  Initial
Election  Date,  each  Non-Employee  Director  may,  subject  to any  subsequent
approval by the stockholders of the Company  required by Rule 16b-3  promulgated
under  Section  16(b) of the  Exchange  Act,  make an  irrevocable  election  to
receive, in lieu of all or a specified  percentage (which percentage shall be in
10% increments) of the cash  compensation to which such director would otherwise
be entitled as a member of the Board and any committee  thereof  (including  the
annual  retainer  fee and any meeting or other fees  payable for services on the
Board  or  any  committee   thereof,   but  excluding  any   reimbursement   for
out-of-pocket  expenses) for the year  beginning  the following  June 1 (or such
other  period  for which  cash  compensation  is  payable  to such  Non-Employee
Director  pursuant to the policies of the Board),  an equivalent value in Shares
granted in accordance with this Section VIII. An election shall be effective (i)
if made by the November 30 preceding the June 1 to which such election  relates,
beginning  on the  June 1  following  such  election;  and  (ii) if made on such
Non-Employee  Director's Initial Election Date,  immediately (or, if later, June
1, 1996).

         Each such election shall (i) be in writing in a form  prescribed by the
Company, (ii) specify the amount of cash compensation to be received in the form
of Election  Shares  (expressed  as a percentage of the  compensation  otherwise
payable in cash),  and (iii) be delivered to the Secretary of the Company.  Such
election may not be revoked or changed  thereafter except as to compensation for
services to be rendered in any 12 month period  beginning on any June 1 at least
six months following such revocation or new election.

         C. Issuance of Common Stock. If a Non-Employee Director elects pursuant
to  Section  VIII.B  above to  receive  Shares,  there  shall be  issued to such
director  promptly  following each  subsequent June 1 for which such election is
effective  (or promptly  following  the first day of such other period for which
such  election  is  effective)  a  number  of  Shares  equal  to the  amount  of
compensation  otherwise payable for the 12 month period beginning on such June 1
(or the other period for which such election is  effective)  divided by the Fair
Market  Value of the  Shares on such  June 1 (or on the first day of such  other
period).  To the extent that the  application  of the  foregoing  formula  would
result in fractional shares of Common Stock being issuable, cash will be paid to
the

                                       9
Non-Employee  Director  in lieu of such  fractional  Shares  based upon the Fair
Market Value of such fractional Share.

         D.  Compliance  with  Exchange  Act. The  election to receive  Election
Shares is intended to comply in all respects with Rule  16b-3(d)(1)  promulgated
under  Section  16(b) of the  Exchange  Act such that the  issuance  of Election
Shares  under the Plan on a grant date  occurring  at least six months after the
election shall be exempt from Section 16(b) of the Exchange Act.

         E.       Grant  Date.  The grant date for each  Election  Share for the
Non-Employee  Director electing such option shall be the first day of the period
to which such election relates and is effective.

IX.      MISCELLANEOUS PROVISIONS.

         A.       Rights of Non-Employee Directors.  No Non-Employee Director
shall be entitled under the Plan to voting rights, dividends or other rights of
a stockholder prior to the issuance of Common Stock.  Neither the Plan nor any
action taken hereunder shall be construed as giving any Non-Employee Director

any right to be retained in the service of the Company.

         B. Limitations on Transfer and Exercise.  All Options granted under the
Plan shall not be transferable by the Non-Employee Director,  other than by will
or the laws of descent and  distribution  or  pursuant  to a qualified  domestic
relations order, as defined by ss.1 et seq, of the Code, Title I of ERISA or the
rules and  regulations  thereunder,  and shall be  exercisable  during  the Non-
Employee  Director's  lifetime  only by such  Non-Employee  Director  or by such
Non-Employee Director's guardian or other legal representative.

         C.  Compliance  with Laws.  No shares of Common  Stock  shall be issued
hereunder  unless  counsel for the Company shall be satisfied that such issuance
will  be in  compliance  with  applicable  federal,  state,  local  and  foreign
securities, securities exchange and other applicable laws and requirements. Each
Share  granted  pursuant to Section VI or Section  VIII and each Option  granted
pursuant to Section VII shall be subject to the requirement  that if at any time
the Committee shall determine, in its discretion, that the listing, registration
or  qualification  of the Shares  granted  or  subject  to the  Option  upon any
securities  exchange  or under any state or federal  securities  or other law or
regulation,  or the consent or approval of any governmental  regulatory body, is
necessary or desirable as a condition to or in  connection  with the granting of
such Share,  such Option or the  issuance or purchase of Shares  thereunder,  no
such Share may be issued and no Option may be exercised or paid in Common Stock,
in whole or in part, unless such listing, registration,  qualification,  consent
or approval  shall have been  effected or obtained  free of any  conditions  not
acceptable to the Committee.  The holder of such Share or Option will supply the
Company with such certificates,  representations  and information as the Company
shall request and shall  otherwise  cooperate with the Company in obtaining such
listing, registration,  qualification, consent or approval. The Committee may at
any time impose any  limitations  upon the sale of a Share or the exercise of an
Option or the sale of the Common Stock  issued upon  exercise of an Option that,
in the  Committee's  discretion,  are  necessary or desirable in order to comply
with Section 16(b) of the

                                        10
Exchange Act and the rules and regulations thereunder.  The Committee may at any
time  impose  additional  limitations,  or may  amend  or  delete  the  existing
limitations, upon the exercise of Options by the tender or withholding of Shares
in  accordance  with Section  VII.E  (including  an amendment or deletion of the
related  ownership  period  for  Shares  specified  in  such  Section),  if such
additional, amended or deleted limitations are necessary, desirable or no longer
required (as the case may be) to remain in compliance with applicable accounting
pronouncements  relating  to the  treatment  of the  plan  as a fixed  plan  for
accounting purposes.

         D.  Payment  of  Withholding  Tax.  Whenever  Shares  are to be  issued
pursuant to Section VI or Section  VIII of the Plan or upon  exercise of Options
issued  pursuant  to Section VII of the Plan,  the Company  shall be entitled to
require as a condition  of  delivery  (i) that the  participant  remit an amount
sufficient to satisfy all federal,  state and local withholding tax requirements
related thereto, (ii) the withholding of Shares due to the participant under the
Plan with a Fair Market Value equal to such amount,  or (iii) any combination of
the foregoing.

         E.  Expenses.  The expenses of the Plan shall be borne by the Company
and its Subsidiaries.

         F. Deemed Acceptance, Ratification and Consent. By accepting any Common
Stock hereunder or other benefit under the Plan, each Non-Employee  Director and
each person claiming under or through him or her shall be conclusively deemed to
have indicated his or her acceptance  and  ratification  of, and consent to, any
action taken under the Plan by the Company, the Board or the Committee.

         G.  Securities Act Registration. The Company shall use its best efforts
to cause to be filed under the Securities Act of 1933, as amended, a
registration statement covering the Shares issued, and issuable upon exercise
of options granted, under the Plan.

         H.  Governing Law.  The provisions of the Plan shall be governed by and
construed in accordance with the laws of the State of Delaware.

         I. Election Shares. Pending the grant of Election Shares hereunder, all
compensation earned by a Non-Employee Director with respect to which an election
to receive the grant of Election Shares pursuant to Section VIII.B has been made
shall be the  property of such  director and shall be paid to him or her in cash
in the event that Election Shares are not granted by the Company hereunder.

         J.  Headings; Construction.  Headings are given to the sections of the
Plan solely as a convenience to facilitate reference.  Such headings, numbering
and paragraphing shall not in any case be deemed tn any way material or relevant
to the construction of the Plan or any provisions hereof.  The use of the
singular shall also include within its meaning the plural, where appropriate,
and vice versa.

                                        11
XI.      AMENDMENT.

         The Plan may be amended at any time and from time to time by resolution
of the Board as the Board  shall  deem  advisable;  provided,  however,  that no
amendment  shall  become  effective   without   stockholder   approval  if  such
stockholder  approval is  required  by law,  rule or  regulation;  and  provided
further,  that to the  extent  required  by Rule 16b-3  under  Section 16 of the
Exchange  Act,  Plan  provisions  shall not be amended  more than once every six
months,  except that the  foregoing  shall not preclude any amendment to comport
with  changes in the Code,  ERISA or the rules  thereunder.  No amendment of the
Plan shall  materially and adversely  affect any right of any  participant  with
respect to any Options or Shares theretofore granted under the Plan without such
participant's written consent, except for any modifications required to maintain
compliance with any federal or state statute or regulation.

XII.     TERMINATION.

         The Plan shall  terminate  upon the earlier of the  following  dates or
events to occur:

                  (i)   upon the adoption of a resolution of the Board
terminating the Plan; and

                  (ii) ten years  from the date the Plan is  initially  approved
         and  adopted by the  stockholders  of the  Company in  accordance  with
         Article XIII.

         Except as  specifically  provided  herein,  no  termination of the Plan
shall  materially  and adversely  affect any of the rights or obligations of any
person  without  his or her  consent  with  respect  to any  Options  or  Shares
theretofore granted under the Plan.

XIII.    STOCKHOLDER APPROVAL AND ADOPTION.

         The Plan is dated  March 12,  1996,  which is the date  upon  which the
Board adopted the Plan. The Plan shall be submitted to the  stockholders  of the
Company for their  approval and adoption at the meeting of  stockholders  of the
Company  to be held May 21,  1996.  The Plan shall not be  effective  unless and
until the Plan has been so  approved  and  adopted.  The  stockholders  shall be
deemed to have  approved and adopted the Plan only if it is approved and adopted
at a meeting of the  stockholders  duly held on that date (or any adjournment of
said  meeting  occurring  subsequent  to such  date) by vote taken in the manner
required by the laws of the State of Delaware.

                                        12
Exhibit 5

                                                      THE ALLSTATE CORPORATION

                                                      2775 Sanders Road
                                                      Northbrook, Illinois
                                                                    60062-6127
                                                      ------------------------
                                                      Joseph T. Kane
                                                      Counsel

                                            May 31, 1996

The Allstate Corporation
Allstate Plaza
Northbrook, IL  60062

Ladies and Gentlemen:

         A  Registration  Statement on Form S-8  ("Registration  Statement")  is
being filed on or about the date of this letter with the Securities and Exchange
Commission to register  300,000 shares of common stock, par value $.01 per share
(the "Common Stock"), of The Allstate Corporation (the "Company") which may from
time to time be offered  in  connection  with The  Allstate  Corporation  Equity
Incentive  Plan  for  Non-Employee  Directors  (the  "Plan").  This  opinion  is
delivered in accordance  with the  requirements  of Item 601(b)(5) of Regulation
S-K under the Securities Act of 1933, as amended.

         In connection  with this opinion,  I have examined and am familiar with
originals or copies,  certified or otherwise  identified to my satisfaction,  of
(i) the Registration Statement,  ((ii) the Restated Certificate of Incorporation
of the  Company as  currently  in effect,  (iii) the  By-laws of the  Company as
currently  in effect,  and (iv)  resolutions  of the Board of  Directors  of the
Company  relating  to the  filing  of the  Registration  Statement  and  related
matters.  I have also  examined  originals  or copies,  certified  or  otherwise
identified  to my  satisfaction,  of such  records of the Company and such other
agreements,  instruments, and documents of the Company, and have made such other
investigations,  as I have deemed  necessary or  appropriate  as a basis for the
opinions set forth herein.

         I  have  assumed  the  legal  capacity  of  all  natural  persons,  the
genuineness of all signatures, the authenticity of all documents submitted to me
as originals, the conformity to
original documents of all documents  submitted to me as certified to photostatic
copies and the authenticity of the originals of such latter documents. In making
my examination of documents  executed by parties other than the Company,  I have
assumed that such parties had the power, corporate and otherwise,  to enter into
and perform their  respective  obligations  thereunder and have also assumed the
due  authorization  by all requisite  action,  corporate and otherwise,  and the
execution  and delivery by such parties of such  documents  and the validity and
binding  effect  thereof.  As to any facts  material  to the  opinion  expressed
herein,  I have relied upon oral or written  statements and  representations  of
officers and other representatives of the Company and others.

         Based upon and  subject  to the  foregoing,  it is my opinion  that the
shares of Common Stock have been duly  authorized  and, when issued  pursuant to
the Plan, will be validly issued, fully paid and non-assessable.

         I  consent  to the  inclusion  of this  opinion  as an  exhibit  to the
Registration  Statement  referred  to above and to the  reference  to me in such
Registration Statement.

                                            Very truly yours,

                                            Joseph T. Kane
Exhibit 15

The Allstate Corporation
Allstate Plaza
Northbrook, IL

We have  reviewed,  in accordance  with  standards  established  by the American
Institute of Certified  Public  Accountants,  the  unaudited  interim  financial
information  of The Allstate  Corporation  and  subsidiary for the periods ended
March 31, 1996 and 1995, as indicated in our report dated May 13, 1996;  because
we did not perform an audit, we expressed no opinion on that information.

We are aware that our  report  referred  to above,  which was  included  in your
Quarterly  Report on Form 10-Q for the quarter  ended March 31,  1996,  is being
used in this Registration Statement.

We are also aware that the aforementioned report,  pursuant to Rule 436(c) under
the  Securities  Act of  1933,  is not  considered  a part  of the  Registration
Statement  prepared  or  certified  by an  accountant  or a report  prepared  or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.

Deloitte & Touche LLP

Chicago, Illinois
May 30, 1996
Exhibit 23(b)

                        INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this  Registration  Statement of
The  Allstate  Corporation  on Form S-8 of our  reports  dated  March  1,  1996,
appearing in and  incorporated by reference in the Annual Report on Form 10-K of
The Allstate Corporation for the year ended December 31, 1995.

Deloitte & Touche LLP

Chicago, Illinois
May 30, 1996