OLD REPUBLIC INTERNATIONAL CORPORATION
Notice of the Annual Meeting of Shareholders
To be held May 13, 1994
To the Shareholders of
OLD REPUBLIC INTERNATIONAL CORPORATION
NOTICE IS HEREBY GIVEN that the Annual Meeting of the
Shareholders of OLD REPUBLIC INTERNATIONAL CORPORATION will be
held in Room 2300 at the offices of the Company, 307 North
Michigan Avenue, Chicago, Illinois 60601, on Friday, May 13, 1994
at 3:00 P.M. Central Daylight Savings Time, for the purpose of
considering and acting upon the following matters:
1. To elect five Class 1 directors;
2. To consider and act upon a proposed amendment to the
Company's Restated Certificate of Incorporation to change
the par value of the authorized Preferred Stock to one cent
per share; and
3. To transact such other business as may properly come before
the meeting.
Shareholders of record at the close of business on March 21,
1994 will be entitled to vote, either in person or by proxy.
Shareholders who do not expect to attend in person are urged to
execute and return the accompanying proxy in the envelope
enclosed.
The annual report of the Company for the year 1993 is being
mailed to all shareholders of record with this Notice and the
Proxy Statement.
By order of the Board of Directors.
SPENCER LEROY III
Secretary
Chicago, Illinois
March 31, 1994
<PAGE>
Proxy Statement
OLD REPUBLIC INTERNATIONAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
May 13, 1994
GENERAL INFORMATION
This proxy statement is being furnished to the shareholders
of Old Republic International Corporation, a Delaware corporation
(the "Company"), 307 North Michigan Avenue, Chicago, Illinois
60601, in connection with the solicitation of proxies by its
Board of Directors for use at the annual meeting of shareholders
to be held on May 13, 1994 and any adjournments thereof. The
approximate date on which this proxy statement and the
accompanying proxy are first being sent to the shareholders is
March 31, 1994.
The proxy is revocable at any time before it is voted by
written notification to the persons named therein as proxies,
which may be mailed or delivered to the Company at the above
address. All shares represented by effective proxies will be
voted at the meeting and at any adjournments thereof.
If the enclosed proxy is properly executed and returned in
time for voting with a choice specified thereon, the shares
represented thereby will be voted as indicated thereon. If no
specification is made, the proxy will be voted by the proxy
committee for the election as directors of the nominees named
below (or substitutes therefor if any nominees are unable or
refuse to serve), for the proposed amendment to the Company's
Restated Certificate of Incorporation to change the par value of
the Company's Preferred Stock, and in its discretion upon such
matters not presently known or determined which may properly come
before the meeting.
The Company has two classes of stock outstanding, Preferred
Stock, without par value ("Preferred Stock"), and Common Stock,
$1.00 par value per share ("Common Stock"). The voting Preferred
Stock is composed of Series B Cumulative Convertible Preferred
Stock ("Series B Preferred Stock"), Series D Cumulative
Convertible Preferred Stock ("Series D Preferred Stock"), Series
E Cumulative Convertible Preferred Stock ("Series E Preferred
Stock"), and Series G Convertible Preferred Stock ("Series G
Preferred Stock"). On February 28, 1994, 386,075 shares of Series
B Preferred Stock, 22,874,402 shares of Series D Preferred Stock,
112,955 shares of Series E Preferred Stock, 51,546 shares of
Series G Preferred Stock and 56,310,689 shares of Common Stock
were outstanding and entitled to one vote each on all matters
considered at the meeting. Shareholders of record as of the close
of business on March 21, 1994 are entitled to notice of and to
vote at the meeting. On February 28, 1994, the Company also had
outstanding 2,300,000 shares of 8-3/4% Series H Cumulative
Preferred Stock ("Series H Preferred Stock") which is not
entitled to vote at the meeting. There are no cumulative voting
rights with respect to the election of directors.
PRINCIPAL HOLDERS OF SECURITIES
The following tabulation shows with respect to (i) each
person who is known to be the beneficial owner of more than 5% of
any series of the voting Preferred Stock or the Common Stock of
the Company; (ii) each dr of the Company; and (iii) all executive
officers and directors, as a group: (a) the total number of
shares of Preferred Stock or Common Stock beneficially owned as
of February 28, 1994; and (b) the percent of the class of stock
so owned as of the same date:
<TABLE>
Amount and
Nature of Percent
Name Beneficial of
Title of Class of Beneficial Owner Ownership Class(*)
<S> <S> <C> <C>
Series B Preferred ............. Inter West Assurance Company, Ltd. 386,075 <F1> 100.0
P.O. Box HM 1022
Hamilton HM DX, Bermuda
Series D Preferred ............. Old Republic International Corporation 22,256,682 <F2> 97.3
Employees Savings and Stock
Ownership Plan
Messrs. Sursa, Stover and Zucaro
as members of The Administration
Committee
307 North Michigan Avenue
Chicago, Illinois 60601
Paul D. Adams 7,627 <F3> **
Anthony F. Colao 12,659 <F3> 0.1
John C. Collopy 39,625 <F3> 0.2
Jimmy A. Dew 30,982 <F3> 0.1
Peter Lardner 9,734 <F3> **
William A. Simpson 31,935 <F3> 0.1
A. C. Zucaro 174,858 <F3> 0.8
All executive officers and directors, as
a group 406,755 <F3> 1.8
Series G Preferred ............. John C. Collopy 3,242 <F4> 6.3
William R. Stover 33,974 <F4> 65.9
All executive officers and directors, as
a group 37,216 <F4> 72.2
Series H Preferred ............. Anthony F. Colao 300 **
William R. Stover 8,000 0.3
A. C. Zucaro 800 **
All executive officers and directors, as
a group 9,100 0.4
Common Stock
Shareholders' beneficial
ownership of more than 5% of the
Common Stock (excluding direc-
tors) ............... Old Republic International Corporation 5,290,215 <F4> 9.4
Employees Savings and Stock
Ownership Plan
Messrs. Sursa, Stover and Zucaro
as members of The Administration
Committee
307 North Michigan Avenue
Chicago, Illinois 60601
American Business & Mercantile 4,493,640 <F5> 8.0
Insurance Group, lnc.
307 North Michigan Avenue
Chicago, Illinois 60601
lnvesco, PLC 3,062,654 (6) 5.4
11 Devonshire Square
London EC2M 4YR N.E.
England
</TABLE>
<TABLE>
Name of Shares Subject to Shares Held by Beneficially of
Title of Class Beneficial Owner Stock Options(*) Employee Plan(*) Owned(*) Total Class*
<S> <S> <C> <C> <C> <C> <C>
Directors' and Paul D. Adams 26,899 786 <F3> 19,650 47,335 0.1
executive officers' Anthony F. Colao 65,544 1,843 <F3> 2,238 69,625 0.1
beneficial John C. Collopy 3,110 <F3> 63,506<F7> 66,616 0.1
ownership Jimmy A. Dew 23,124 2,432 <F3> 133,270<F8> 158,826 0.3
Darrel M. Holt 27,383 27,383y **
Kurt W. Kreyling 163,812<F9> 163,812 0.3
Peter Lardner 24,970 7,927<F3> 70,595<F10> 103,492 0.2
Wilbur S. Legg 21,552<F11> 21,552 **
Spencer LeRoy III 7,500 2,538<F12> 10,038 **
John W. Popp 2,000 2,000 **
William A. Simpson 23,624 2,506<F3> 102,350<F13> 128,480 0.2
Arnold L. Steiner 456,098<F14> 456,098 0.8
William R. Stover 285,773<F15><F16>285,773 0.5
David Sursa 263,888<F16><F17>263,888 0.5
William G. White, Jr. 19,693 19,693 **
A. C. Zucaro 106,212 19,278<F3> 176,654<F16><F18>302,144 0.5
All executive officers
and directors, as a group 277,873 37,882<F4> 1,810,255 2,126,010 3.8
<FN>
* Calculated pursuant to Rule 13d-3(d) of the Securities Exchange Act of 1934. Unless otherwise stated below, each
such person has sole voting and investment power with respect to all such shares. Under Rule 13d-3(d), shares not
outstanding which are subject to options, warrants, rights or conversion privileges exercisable within 60 days are
deemed outstanding for the purpose of calculating the number and percentage owned by such person, but are not
deemed outstanding for the purpose of calculating the percentage owned by each other person listed. Common shares
used for calculation purposes include 4,493,640 shares held by American Business & Mercantile Insurance Group, Inc.
and its subsidiary (See Note 4), and equivalent common shares to be issued upon conversion of all series of
Preferred Stock convertible within 60 days.
** Less than one-tenth of one percent.
<F1>Inter West Assurance Company, Ltd. ("Inter West") is wholly owned by Ridgefield International Corporation
("Ridgefield"), an insurance holding company in which the Company and several affiliated companies combined own
approximately 30.3% of the voting stock (and 99.6% of the total voting and non-voting equity securites). Mr.
Zucaro is a director of Inter West and Ridgefield. Inter West also owns 424,683 shares of Series D Preferred Stock
and 48,594 shares of Common Stock of the Company.
<F2>22,256,682 shares of Series D Preferred Stock and 838,879 shares of Common Stock are held by the Old Republic
International Corporation Employees Savings and Stock Ownership Plan. Under the terms of the Plan, a participant is
entitled to vote the Company stock held by the Plan the value of which has been allocated to the participant's
account. The Administration Committee appointed pursuant to the Plan is authorized to vote the Company stock held
by the Plan until such time as the value of such stock has been allocated to a participant's account or where a
participant fails to exercise his or her voting rights. The value of a portion of the shares of the Series D
Preferred Stock and Common Stock has been allocated to the accounts of Plan participants. Additionally, the
Administration Committee may be deemed to have investment power with respect to stock held by the Plan. The
Administration Committee is composed of Messrs. Sursa, Stover, and Zucaro, all directors of the Company. Under the
rules of the Securities and Exchange Commission, each of them may be deemed to be the beneficial owner of such
shares of Series D Preferred Stock and Common Stock by virtue of such shared voting and investment power.
The Series D Preferred Stock held by the Old Republic International Corporation Employees Savings and Stock
Ownership Plan is convertible at any time into 4,451,336 shares of Company Common Stock. Accordingly, under the
rules of the Securities and Exchange Commission, Messrs. Sursa, Stover, and Zucaro each may be deemed to be the
beneficial owners of 5,290,215 shares of Common Stock (The shares that would be obtained on the conversion of the
Series D Preferred Stock plus the 838,879 shares of Common Stock actually owned by the Plan). The foregoing
presentation should not be construed as an admission of beneficial ownership, and such persons disclaim beneficial
ownership of shares held by the Plan.
<F3>Includes only the shares that have been allocated to the account of the director or the executive officer as a Plan
participant. Excludes those shares for which the director may be deemed to have investment and voting power as a
result of being a member of the Administration Committee of the Plan.
<F4>Each share of Series G Preferred Stock is convertible at any time after six months from the date of issuance into
0.95 share of Common Stock, and accordingly, under the rules of the Securities and Exchange Commission, Messrs.
Collopy and Stover are deemed to be the beneficial owners of 3,079 and 32,275 shares, respectively, of Common Stock
issuable upon conversion of their Series G Preferred Stock.
<F5>American Business & Mercantile Insurance Group, Inc. ("AB&M Group") and its wholly-owned subsidiary, American
Business & Mercantile REassurance Company, own 4,493,640 shares of the Company's Common Stock. Voting control of
AB&M Group is divided between American Business & Mercantile Insurance Mutual, Inc. ("AB&M Mutual"), which through
a subsidiary, owns 60% of AB&M Group's voting stock, and the Company, which through a subsidiary, owns 40% of AB&M
Group's voting stock. At February 28, 1994, the Company held 98.8%, AB&M Mutual .1%, and public shareholders 1.1%
of the total voting and non-voting equity securities of AB&M Group. AB&M Mutual is a property and liability mutual
insurer affiliated with the Company through management agreements, and is owned by its policyholders. Mr. Zucaro is
Chairman, President and Chief Executive Officer of AB&M Mutual and AB&M Group. Messrs. Colao, Holt, Kreyling, Legg,
Steiner, Stover, Sursa, and Zucaro are directors of AB&M Group. Through subsidiaries, AB&M Mutual also owns 193,037
shares of Series D Preferred Stock and 48,567 shares of Common Stock of the Company.
<F6>Reflects number of shares, adjusted for stock dividends and splits, shown in the most recent Schedule 13-G filings
with the Securities and Exchange Commission through February 28, 1994. Invesco, PLC has shared voting power with
regard to all shares of Common Stock reported.
<F7>Includes 3,938 shares owned jointly by Mr. Collopy and his daughter and 3,079 shares that would be issued if Mr.
Collopy converted his Series G Preferred Stock to Common Stock.
<F8>Includes 24,024 shares owned by Mr. Dew's wife.
<F9>Includes 158,730 shares owned by or in trust for Mr. Kreyling's wife of which Mr. Kreyling disclaims beneficial
ownership and 4,100 shares owned by Mr. Kreyling's son of which Mr. Kreyling disclaims beneficial ownership.
<F10>
Includes 56,974 shares held in a living trust of which Mr. Lardner's wife is the trustee. Mr. Lardner disclaims
beneficial ownership of the shares owned by this trust.
<F11>
Includes 18,490 shares owned jointly by Mr. Legg and his wife and 1,968 shares owned by Mr. Legg's wife of which
Mr. Legg disclaims beneficial ownership.
<F12>
Includes 1,688 shares held in trust for Mr. LeRoy's benefit.
<F13>
Includes 11,210 shares owned by Mr. Simpson's wife.
<F14>
Includes 5,298 shares owned by Mr. Steiner's wife, 217,714 shares held in a trust of which Mr. Steiner is a
co-trustee, 54,436 shares held in trust for Mr. Steiner's children and 17,618 shares held by a foundation of which
Mr. Steiner is a trustee.
<F15>
Includes 74,082 shares owned jointly by Mr. Stover and his wife and 32,275 shares that would be issued if Mr.
Stover converted his Series G Preferred Stock to Common Stock.
<F16>
Messrs. Sursa, Stover and Zucaro are members of the Administration Committee of the Old Republic International
Corporation Salaried Employees Restated Retirement Plan ("Retirement Plan"). As such, they are entitled to vote
163,494 shares of Common Stock owned by the Retirement Plan. Under the rules of the Securities and Exchange
Commission each of them may be deemed to be the beneficial owner of this Common Stock by virtue of such shared
voting power. However, the foregoing presentation should not be construed as an admission of beneficial ownership.
The members of the Administration Committee disclaim beneficial ownership of the Common Stock held by the
Retirement Plan and these shares are not reflected in this table as shares beneficially owned by each of them.
<F17>
Includes 135,854 shares owned by E.F.S. Investments, Inc., in which Mr. Sursa and his wife have a beneficial
interest.
<F18>
Includes 176,654 shares owned jointly by Mr. Zucaro and his wife.
</TABLE>
THE BOARD OF DIRECTORS AND ITS STANDING COMMITTEES
The Company's Board of Directors has the responsibility to
review the overall operations of the Company. The Board members
are kept informed of the Company's results of operations and
proposed plans and business objectives through periodic reports
sent to them by the Company's management or presented at Board
and Committee meetings. The Board met four times last year, once
each quarter.
Mr. Clarence L. Coleman retired as a director in May of 1993
after 47 years of service as a director. Mr. John W. Popp was
elected at the Board's May meeting to fill the unexpired term of
Mr. Coleman which runs until the Company's 1995 Annual Meeting of
Shareholders. The Board at its May meeting also amended the
Company's By-laws concerning the number of Company directors.
Following this amendment, the number of directors of the Company
was increased to 14 and Mr. William G. White was elected a Class
1 director. The term of the Class 1 directors expires at the
Company's 1994 Annual Meeting of Shareholders. Thus, Mr. White
is standing for reelection as a director. Mr. Popp has been a
director of the Company's Bituminous and Great West insurance
subsidiaries for more than the past five years and continues as
such. Mr. White has been a director of the Republic Mortgage
Insurance Company subsidiary for more than the past five years
and continues as such.
Directors' Compensation
Directors of the Company (other than full time employees)
receive an annual retainer of $9,600 plus $900 for each Board or
Committee meeting they attend. Directors of the Company or any of
its subsidiaries who are full time employees receive $900 for
each meeting they attend of the Board or a Committee of the
Company (other than meetings of the Executive Committee). Mr.
Collopy, who is the retired Chairman of the Board of one of the
Company's subsidiaries, has a consulting agreement with that
subsidiary whereby he is paid $74,400 per year through 1997.
Board Committees
The Board of Directors has three principal standing
committees.
The Executive Committee is empowered to exercise the
authority of the Board of Directors in the management of the
business and affairs of the Company between the meetings of the
Board, except as provided in the By-laws or limited by the
provisions of the General Corporation Law of the State of
Delaware. The Committee, which is composed of Messrs. Kreyling,
Legg, Stover, Steiner, Sursa and Zucaro, met four times during
1993 and took action by unanimous written consent on one
occasion. Mr. Stover is Chairman of the Committee.
The Company has no standing nominating committee of the
Board of Directors. This function is performed by the Executive
Committee of the Board of Directors itself. The Executive
Committee has not established any formal policy or procedure for
considering nominees recommended by shareholders.
The Audit Committee recommends to the Executive Committee
the appointment of the independent certified public accountants
for the following year. The Committee reviews with the
accountants the scope of the Company's annual audit, the annual
financial statements of the Company, and the auditors' comments
relative to the adequacy of the Company's system of internal
controls and accounting systems. The Committee, which reports
directly to the Executive Committee, is currently composed of
five non-employee directors, Messrs. Holt, Popp, Steiner, Sursa
and White. The Committee met twice during 1993. Mr Steiner is
Chairman of the Committee.
The Compensation Committee, whose Report follows, is
composed of five non-employee directors, reports directly to the
Executive Committee, and is currently composed of five directors,
Messrs. Holt, Kreyling, Popp, Sursa and White. Mr. Sursa is
chairman of the Committee. The Committee met once during 1993.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Compensation Committee has ever
served as an officer or employee of the Company or any of its
subsidiaries nor has any executive officer of the Company served
as a director or member of a compensation committee for any
company that employs any director of the Company or member of the
Compensation Committee.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE MANAGEMENT
COMPENSATION
The Compensation Committee of the Board of Directors (the
"Committee") evaluates and approves the overall policies which
govern the annual base salaries of the Company's management,
including its Chief Executive Officer ("CEO") and other executive
officers, and the Company's incentive programs including the Key
Employees Performance Recognition Plan ("KEPRP"), the Stock
Option Plan, and the Employees Savings and Stock Ownership Plan
("ESSOP").
The Committee reviews and evaluates Old Republic's corporate
performance and executive management compensation once each year.
In making its evaluations, the Committee considers a large number
of factors including those set forth under "Compensation
Policies" herein, together with other matters such as the
inflation rate, and the Company's past performance, generally
over consecutive five-year time frames.
Compensation Policies
Old Republic's compensation policies, particularly as they
apply to its executive officers, including the CEO, are designed
to achieve the following major objectives:
1. To set base annual salaries (base income) for key executive
officers which are deemed reasonably competitive in the
context of American industry generally, and the insurance
industry specifically. Business size, level of
responsibility, complexity of operations, and long term
performance and prospects are among the factors considered.
The Company, however, does not necessarily seek to set base
salaries above, below or equal to the medium base salaries
of the insurance industry.
2. To afford personnel an opportunity and incentive to increase
their base income over time through participation in
incentive compensation and related stock option and savings
programs. With respect to all such programs the Committee
approves various criteria, the objectives of which are to:
a) Establish tangible means of evaluating the overall
financial performance of the Company or individual profit
centers;
b) Align performance criteria with shareholders' interests
by establishing minimum requirements relative to such
performance indicators as return on equity, return or profit
margin on revenues, and increases in earnings;
c) Encourage a long-term commitment to the organization.
In addition, the Committee considers a variety of intangible
and other subjective factors such as each person's likely future
contribution to the Company's successful growth, the current
state and prospects of the industry or segment(s) thereof, and
the Company's long-term goals and strategies which might from
time to time require temporary investment in personnel resources
in the absence of immediate positive results. Further, the
Committee considers the compensation and benefits previously paid
to its executive officers.
In making its performance evaluations, the Committee takes
the shareholders' interests into account from the standpoints of
both total market return for the Common Stock as well as the
Company's intrinsic performance as such and relative to the
Company's Peer Group. However, the Committee places greater
emphasis on the latter two factors since total market return is
influenced materially by the vagaries of the securities markets.
The Company's Peer Group referred to in this report and used for
comparison purposes are those companies that are listed in the
footnote in the Company's performance graph on page 13 as "The
Peer Group".
Compensation of the Chief Executive Officer
With specific reference to the CEO's compensation, the
Committee takes into account all of the factors and objectives
discussed above. In addition, special emphasis is also placed on
such other considerations as the CEO's vision and planning for
the Company's future and the strategies implemented for their
realization, his leadership qualities and judgment, and his
commitment to and abilities in setting and promoting the
character of the organization in the best interests of its
insurance subsidiaries, insurance beneficiaries, and
shareholders. The Committee's evaluation of the CEO's performance
takes place without his presence.
Mr. Zucaro joined the Company in 1976 as Executive Vice
President and Chief Financial Officer. He was promoted to
President in 1981, to Chief Executive Officer in 1990, and to
Chairman on January 1, 1993 while retaining his offices as
President and Chief Executive Officer. Until 1989, Mr. Zucaro's
cash compensation consisted solely of a base annual salary and a
small amount of fees earned in his capacity as a director of a
number of the Company's subsidiaries. His other compensation was
fully deferred pursuant to his participation in the Company's
KEPRP, ESSOP, and stock option plans. Since 1990, his cash
compensation has been enhanced by 50% of the awards granted to
him under the Company's KEPRP pursuant to the revised terms of
that plan.
<PAGE>
<TABLE>
The following table reflects certain key data pertaining to the Company's performance during the past three years
together with the CEO's compensation during the period. In comparing this data, it should be noted that the CEO's and
other executives' cash and deferred compensation is to a significant degree based on prior year(s)' performance of the
Company. Accordingly, trends in the CEO's compensation to some extent lag, up or down, the performance trends for the
Company.
Summary of Company Performance Indicators
VS.
CEO Compensation
1991 to 1993
Amounts
% of Change
1993 1992 1991 '93 vs '92 '92 vs '91'93 vs '91
Company Performance Indicators (a)
($ in Millions)
<S> <C> <C> <C> <C> <C> <C>
Consolidated assets $ 6,098.3 $ 4,141.6 $ 3,713.2 47.2% 11.5% 64.2%
Common shareholders'
equity $ 1,256.9 $ 1,084.9 $ 881.7 15.9% 23.0% 42.6%
Net revenue $ 1,736.3 $ 1,617.0 $ 1,374.5 7.4% 17.6% 26.3%
Net operating income $ 140.6 $ 129.9 $ 112.1 8.2% 15.9% 25.4%
Net income $ 175.1 $ 174.7 $ 131.0 0.2% 33.4% 33.7%
Percent return on equity 16.1% 19.8% 17.1%
Primary Per Share Data:
(in dollars and cents)
Book value $ 24.25 $ 21.40 $ 18.81 13.3% 13.8% 28.9%
Net operating income $ 2.38 $ 2.28 $ 2.12 4.4% 7.5% 12.3%
Net income $ 2.98 $ 3.09 $ 2.48 3.6% 24.6% 20.2%
<FN>
CEO Compensation (b)
1. Cash compensation $ 658,536 $ 607,053 $ 515,769 8.5% 17.7% 27.7%
2. Deferred incentive compensation $ 201,800 $ 183,728 $ 133,100 9.8% 38.0% 51.6%
Incentive stock options:
3. Valued at 5% appreciation: $ 791,438 $ $ 174,844 -- -- 352.7%
4. Valued at 10% appreciation: $1,997,438 $ $ 441,273 -- -- 352.7%
5. Total cash & deferred incentive
compensation with options, if any,
valued at:
6. 5% appreciation (1 +2+3) $1,651,774 $ 790,781 $ 823,713 108.9% (4.0%) 100.5%
7. 10% appreciation (1 +2+4) $2,857,774 $ 790,781 $1,090,142 261.4% (27.5%) 162.1%
(a) Data taken from the Company's audited financial statements and stock market tables as applicable. Return on equity
is calculated by dividing each year's net income by the common shareholders' equity balance at the beginning of the
year. Net operating income excludes fresh start tax credits and realized capital gains which are a part of net
income; both net operating income and net income per share are shown after deduction of Preferred Stock dividend.
(b) In this table, Cash Compensation includes annual salary, the cash portion of awards under the KEPRP, the amount of
premium for group term life insurance attributed to the CEO's compensation, and directors' fees; Deferred Incentive
Compensation includes the deferred portion, which is non-interest bearing, of awards granted under the Company's
KEPRP and the employer matching contribution to the ESSOP; Incentive Stock Options have been valued alternatively
by assuming that the market value of the Common Stock subject to options will compound at a 5% and a 10% annual
rate (or 63% and 159%, respectively, in the aggregate) over the 10-year term of the options. The actual future
value of such options may be higher or lower than these arbitrary estimates. Also see "Summary Compensation Table".
/TABLE
<PAGE>
Employee Benefit Plans
In addition to determining base salaries, the Committee also
administers the Company's employee benefit plans. The employee
benefit plans are an important part of the Company's compensation
structure and provide employees, including the CEO and other
executive officers, with an opportunity and incentive to increase
their base income.
Key Employee Performance Recognition Plan ("KEPRP"): Under the
Company's KEPRP, the Company establishes a performance
recognition pool each year for allocation among key employees of
the Company and its participating subsidiaries, including the CEO
and other executive officers. Employees eligible to share in this
pool are selected annually by the Committee in consultation with
the CEO. However, the CEO does not consult with the Committee
with regard to the performance, eligibility or award for himself.
After prior plan participants are credited with a certain
portion, if any, of each year's pool the CEO may recommend the
allocation of the balance of the pool to participants in the
plan, other than himself, or may recommend to carry forward up to
50% of such amount for up to three years for later allocation. In
designating eligible employees and determining amounts to be
allocated, the Committee in consultation with the CEO considers
the positions and responsibilities of the employees, the
perceived value of their accomplishments to the Company, their
expected future contributions to Old Republic and other relevant
factors.
The pool amount is established in accordance with a complex
formula which takes into account (a) the eligible participating
employees' annual salaries, (b) the current year's earnings of
the Company in excess of the prior year's earnings (excluding
income from capital gains or losses), multiplied by a factor
determined by the increase in the Company's earnings per share,
and (c) the latest year's return on equity in excess of an amount
determined by taking into account the latest five years' average
inflation rate (as measured by the Consumer Price Index) and the
average return on equity for the same five year period reported
by ten major publicly held insurance organizations. Each year's
pool is in turn limited to no more than 25% of plan participants'
aggregate annual base salaries.
There is an immediate payment in cash of 50% of any award
made; the balance of the award vests at the rate of 10% per year
of participation. The deferred balance(s) do not bear interest.
Pursuant to the plan, participants become vested in their account
balances upon total and permanent disability or death, or upon
the earlier of attaining age 55 or being employed for 10 years
after first becoming eligible. Benefits are payable in
installments, beginning no earlier than age 55 and/or following
termination of employment, death, disability or retirement.
In addition to the KEPRP, the Company also maintains a
number of separate plans for several individual subsidiaries or
separate profit centers. Such plans similarly provide for the
achievement of certain financial results and objectives as to
each such subsidiary or profit center.
Stock Option Plan: To encourage growth in shareholder value and a
long-term commitment to the business, the Company believes that
key employees, including the CEO and other executive officers,
who are in a position to make a substantial contribution to the
long-term success of the Company should have a stake in its
on-going success. As a result, the Company maintains a
non-qualified stock option plan (the "Plan") for key employees of
the Company and its participating subsidiaries. The decision to
award stock options pursuant to the Plan and the performance
factors that contribute to the amount of such awards are based on
the same factors as set forth under "Compensation Policies"
herein. The primary reason for granting options is to encourage
long-term commitments to the Company by key employees so they
will have a greater incentive to promote the Company's success.
The performance factors the Committee considers include the
achievements of the individual key employee, the overall
performance of the Company and the likelihood of future
contributions to the Company's successful growth by the
individual key employee. The Plan provides for the issuance of
options for up to 5% of the Common Stock issued and outstanding
at any one time. The purchase price per share of Common Stock
subject to an option under the Plan is fixed by the Committee.
However, such purchase price may not be less than the mean high
and low sale price or the last reported sale price of the
Company's Common Stock as reported on the New York Stock Exchange
on the date immediately preceding the date the option is granted.
Optionees may exercise their options for shares of either Common
Stock or Series G Preferred Stock. The term of each option may
not be for more than 10 years from the date of grant. Under
ordinary circumstances, options may be exercised to the extent of
10% of the number of shares covered thereby on and after the date
of grant and cumulatively to the extent of an additional 10% on
and after each of the first through ninth years after the date of
grant. Under the Plan and certain other previously granted
options with vesting acceleration prices, optionees may exercise
their options to the extent of 10% of the number of shares
covered by the option for each year that the optionee has been
employed by the Company or its subsidiaries once the vesting
acceleration price is reached. The vesting acceleration price is
established by the Committee at the time of grant at 150% of the
option purchase price per share.
Under certain options previously granted, the Company may
extend 15 year loans at a prevailing market rate of interest for
a portion of the exercise price. Under certain options, but not
under options granted in accordance with the Company's 1992
Option Plan, the employee's right to exercise options is
accelerated if the Company is dissolved or liquidated, merged, or
consolidated with another company and the Company is not the
surviving corporation, or more than 50% of the members of the
Board of Directors of the Company change in any one year unless
one or more of the new directors was nominated by the Board of
Directors of the Company.
Employees Savings and Stock Ownership Plan ("ESSOP"): The
Company's ESSOP allows eligible employees with one or more years
of service with the Company or participating subsidiaries
("employers") to save a minimum of 1% up to a maximum of 15% of
their total compensation. Employees' savings up to 6% are matched
by employer contributions ranging from 20% to 140% of such
savings in accordance with a formula based upon the percentages
saved and the increase in the Company's average net operating
earnings per share for the five years ending with the calendar
year immediately prior to the year for which the contribution is
being made. Under the terms of the ESSOP, employer contributions
are invested exclusively in Preferred or Common Stock of the
Company and employee savings may be invested at the employee's
direction in either a fund providing for a diversified investment
portfolio or in a fund established for more speculative
investments. A participant becomes vested in the account balance
allocated from employer contributions upon being totally and
permanently disabled, dying, or upon the earlier of attaining age
65 or being employed for 7 years. Vesting also occurs in
increments of 20% a year, beginning after two years of service.
Benefits are payable upon termination of service, death or
disability, or following retirement. At the election of the
participant, benefits derived from employer contributions are
payable either in cash or in Common Stock.
RMIC Profit-Sharing Plan: Mr. Simpson also participates in the
RMIC profit sharing plan. The RMIC profit-sharing plan covers
substantially all employees of RMIC and its subsidiaries.
Contributions to the plan are determined annually by RMIC's Board
of Directors, and voluntary contributions of up to 10% of annual
income are permitted. Plan participants' interests vest in
increments of 10% of contributed amounts beginning with 40% after
one year and extending to 100% after seven years. Account
balances are payable upon death or permanent disability. Normal
retirement is at age 65 and the plan provides for early
retirement at age 50 with ten years of service. With the consent
of RMIC, retirement may be deferred. Benefits upon retirement may
be received as a monthly annuity, periodic cash payments, or in a
lump-sum distribution at the participant's election.
Compensation Committee
David Sursa, Chairman
Darrel M. Holt,
Kurt W. Kreyling
John W. Popp
William G. White. Jr.
The foregoing Report of the Compensation Committee on
Executive Management Compensation shall not be deemed to be
incorporated by reference into any filing of the Company under
the Securities Act of 1933 or the Securities Exchange Act of
1934, except to the extent that the Company specifically
incorporates such information by reference.
<TABLE>
Executive Compensation
The following table sets forth certain information regarding the compensation paid or accrued by the Company to or
for the account of the Chief Executive Officer and each of the three other executive officers of the Company for
services rendered in all capacities during each of the Company's fiscal years ended December 31, 1993, 1992 and 1991:
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
(a) (b) (c) (d) (e) (f)
Securities
Name and Underlying
Principal Option All Other
Position Year Salary(1) Bonus(2) Awards(3) Compensation(4)
<S> <C> <C> <C> <C> <C>
A.C. Zucaro 1993 454,850 400,000 50,000 5,486
President 1992 428,367 350,000 -- 11,786
Chief Executive 1991 387,083 250,000 22,000 11,786
Officer
Paul D. Adams 1993 235,000 110,000 15,000 3,262
Senior Vice 1992 226,833 95,000 -- 9,504
President, 1991 217,000 75,000 16,500 6,711
Chief
Financial
Officer & Treasurer
Spencer 1993 251,800 62,500 -- 3,366
LeRoy Ill 1992 127,600 (5) -- 25,000 783
Senior Vice 1991 -- -- -- --
President,
Secretary & General
Counsel
William A. 1993 223,978 (6) 200,000 20,000 21,800 (7)
Simpson 1992 208,475 (6) 125,000 -- 24,547 (7)
Senior Vice 1991 195,141 (6) 90,000 6,600 23,684 (7)
President
<FN>
(1) Includes fees paid for services as a director of certain of the Company's subsidiaries.
(2) This column includes combined cash and deferred incentive compensation awards granted under the Company's KEPRP and
similar plans maintained for different profit centers. Awards thereunder are typically made 50% in cash and 50%
deferred. The deferred amounts included in this column are usually not payable before the person retires at 55
years of age or later; the amount deferred does not accrue interest and it is included in this column without a
present value discount.
(3) Number of shares of Common Stock subject to options granted during the year indicated.
(4) Represents employer matching contribution to the Company's ESSOP and the amount of premium for the Company's group
term life insurance plan attributed to the compensation of executive officers of the Company. For 1993, the
Company's matching contribution for each was $1,800. For 1993, $3,686, $1,462, $1,566, and $0 were attributed to
the compensation of Messrs. Zucaro, Adams, LeRoy, and Simpson, respectively, for group term life insurance premiums
paid by the Company.
(5) Mr. LeRoy became an executive officer of the Company on July 1, 1992.
(6) Includes $6,600 paid under an agreement with the Company's subsidiary, Republic Mortgage Insurance Company
("RMIC"), which requires such a payment for each year through 1995 which Mr. Simpson is employed by RMIC at year
end.
(7) Includes $20,000 as the vested amount accrued for Mr. Simpson in the RMIC Profit Sharing Plan for 1993.
</TABLE>
Retirement Plans
The Company maintains the Old Republic International Corporation
Salaried Employees Restated Retirement Plan (the "Company Plan")
for its employees and those of participating subsidiaries. The
Company Plan, which is noncontributory, provides for benefits
based upon 1.5% of the participant's "Final Average Monthly
Earnings" (1/60th of the aggregate earnings of the employee
during the period of the five consecutive years of service out of
the last ten consecutive years of service which results in the
highest "Final Average Monthly Earnings") multiplied by the
participant's years of service. Earnings equal base salary and
commissions but excludes cash and deferred incentive compensation
awards granted under the Company's KEPRP.
The following table sets forth the estimated annual benefits
payable under the Company Plan to an employee, upon retirement at
December 31, 1993, at age 65 after specified years of service:
<TABLE>
Highest Average
Annual Earnings of
the 5 Consecutive Estimated Annual Retirement Income for
Plan Years Out of the Representative Years of Credited Service*
Last 10 Plan Years 15 20 25 30 35 40
<S> <C> <C> <C> <C> <C> <C>
$150,000 $33,750 $45,000 $56,250 $67,500 $78,750 $90,000
200,000 45,000 60,000 75,000 90,000 105,000 120,000
250,000 56,250 75,000 93,750 112,500 131,250 150,000
300,000 67,500 90,000 112,500 135,000 157,500 180,000
350,000 78,750 105,000 131,250 157,500 183,750 210,000
400,000 90,000 120,000 150,000 180,000 210,000 240,000
450,000 101,250 135,000 168,750 202,500 236,250 270,000
500,000 112,500 150,000 187,500 225,000 262,500 300,000
550,000 123,750 165,000 206,250 247,500 288,750 330,000
<FN>
*Maximum benefit is limited by law to $118,800 in 1994.
</TABLE>
The amounts shown in the chart are not subject to offsets
for any Social Security payments. At December 31, 1993, Mr.
Zucaro was credited with 17 years of service, Mr. Adams was
credited with 4 years of service and Mr. LeRoy was credited with
1 year of service, for purposes of the Company Plan. However, Mr.
LeRoy's participation under the Plan will not vest until July 1,
1997. Mr. Simpson did not participate because employees of RMIC
participate in the RMIC Profit-Sharing Plan instead of the
Company Plan. At December 31, 1993, the highest average annual
earnings for purposes of the above computations under the Company
Plan were approximately $382,667 for Mr. Zucaro, $221,375 for Mr.
Adams and $250,000 for Mr. LeRoy.
The Company also maintains the Old Republic International
Corporation Executives Excess Benefit Plan to provide certain key
executives with pension benefits in excess of the benefits
provided by the Company Plan. The plan is administered by the
Compensation Committee of the Board of Directors, which selects
the employees to participate in the plan from those who are
participants in the Company Plan. The benefits payable under this
plan equal the excess of the amount otherwise payable under the
terms of the Company Plan over the reduced benefits required by
applicable law. Benefits under this plan are payable at the time
benefits are payable under the Company Plan. The plan is unfunded
and no contributions are made to any separate funding vehicle.
Option Grants in 1993
The following table sets forth certain information regarding
options to purchase shares of Common Stock granted to the
executive officers of the Company listed in the Executive
Compensation Table during the Company's 1993 fiscal year:
<TABLE>
Option Grants in 1993
(a) (b) (c) (d) (e) (f)
Potential
Realizable Value at Assumed
Annual Rates of Stock Price
Appreciation for Option Term
Individual Grants
% of @ Annual Compounding
Number of Total Growth Rates Of:
Securities Options
Underlying Granted to Expira-
Options Employees Exercise tion
Name Granted(1) in 1993 Price Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
A. C. Zucaro 50,000 8.2 $ 25.125 12/31/02 $ 791,438 $ 1,997,438
Paul D. Adams 15,000 2.4 $ 25.125 12/31/02 $ 237,431 $ 599,231
Spencer LeRoy III None -- -- -- -- --
William A. Simpson 20,000 3.3 $ 25.125 12/31/02 $ 316,575 $ 798,975
<FN>
(1) See the Report of the Compensation Committee on Executive Management Compensation "Stock Option Plan"
regarding the vesting of stock options.
Aggregate Options Exercised in 1993 and Option Values at December 31, 1993
</TABLE>
<TABLE>
The following table sets forth certain information regarding options to purchase shares of Common Stock exercised
during the Company's 1993 fiscal year and the number and value of exercisable and unexercisable options to purchase
shares of Common Stock held of the end of the Company's 1993 fiscal year by the executive officers of the Company named
in the Executive Compensation Table:
Aggregated Option Exercises in 1993
and Option Values at December 31, 1993
(a) (b) (c)(d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised ln-the-Money
Options at Options at
12/31/93 12/31/93
Shares Acquired Exercisable/ Exercisable/
Name on Exercise Value Realized(1) Unexercisable Unexercisable(2)
<S> <C> <C> <C> <C> <C> <C>
A. C. Zucaro 144,372 $ 2,633,366(3) 101,212 / 45,000 $ 1,102,996 / $ 0
Paul D. Adams None -- 25,889 / 13,763 $ 253,411 / $ 3,322
Spencer LeRoy III None -- 5,000 / 20,000 $ 10,625 / $ 45,500
William A. Simpson 5,516 $ 74,541 21,624 / 18,000 $ 221,349 / $ 0
<FN>
<F1> Value realized is equal to the difference between the fair market value per share of Common Stock on the date of
exercise and the option exercise price per share multiplied by the number of shares acquired upon exercise of an
option.
<F2> Value of exercisable/unexercisable in-the-money options is equal to the difference between the fair market value
per share of Common Stock at December 31, 1993 and the option exercise price per share multiplied by the number of
shares subject to options.
<F3> Represents the exercise of options granted in 1979, 1981 and 1984. The value shown here is the difference between
the option price and market price on the day of the exercise of the option. Mr. Zucaro has not in fact realized any
gain on the exercise of these option shares since he has not sold them.
</TABLE>
Comparative Five-Year Total Market Returns
The following table, prepared on the basis of market and
related data furnished by Standard & Poor's Compustat Services,
reflects total market return data for the most recent five
calendar years ended December 31, 1993. For purposes of the
presentation the information is shown in terms of $100 invested
at the close of trading on the last trading day preceding the
first day of the fifth preceding year. The $100 investment is
deemed to have been made either in Old Republic Common Stock, in
the S&P 500 Index of common stocks, or in an aggregate of the
common shares of a Peer Group (*) of ten publicly held insurance
businesses selected by Old Republic. In each instance the
cumulative total return assumes reinvestment of cash dividends.
The information utilized to prepare this table has been
obtained from sources believed to be reliable, but no
representation is made that it is accurate or complete in all
respects.
<TABLE>
Comparison of Five Year Total Market Return
OLD REPUBLIC INTERNATIONAL CORPORATION vs. S&P 500 vs. Peer Group
(For the five years ended December 31, 1993)
$300
[GRAPH]
$200(With Legend)
$100
$0
_________________________________________________________________
ORI S&P Peer Group
<S> <C> <C> <C>
1988 $100.00 $100.00 $100.00
1989 $114.18 $131.69 $141.44
1990 $111.47 $127.60 $119.72
1991 $195.14 $166.47 $159.54
1992 $278.20 $179.15 $184.19
1993 $257.54 $197.21 $202.52
<FN>
(*) The Peer Group of companies selected by Old Republic
consists of: Aetna Life & Casualty Company, American
International Group, Inc., Chubb Corporation, CNA Financial
Corporation, CIGNA Corporation, Continental Corporation,
Lincoln National Corporation, Ohio Casualty Corporation, St.
Paul Companies, Inc., and The Travelers Corporation. The
companies in the Peer Group have been approved by the
Compensation Committee.
The foregoing table shall not be deemed to be incorporated
by reference into any filing of the Company under the
Securities Act of 1933 or the Securities Exchange Act of
1934, except to the extent that the Company specifically
incorporates such information by reference.
</TABLE>
<TABLE>
PROPOSAL I - ELECTION OF DIRECTORS
The following tabulation lists all nominees and continuing directors of the Company. Five Class 1 directors are to
be elected to hold office for a term of three years and until their successors are elected and qualified. The nominees
are presently Class 1 directors. It is intended that, in the absence of contrary specifications, votes will be cast
pursuant to the enclosed proxies for the election of such nominees. Should any of the nominees become unable or
unwilling to accept nomination or election, it is intended, in the absence of contrary specifications, that the proxies
will be voted for the balance of those named and for a substitute nominee or nominees. However, the Company now knows of
no reason to anticipate such an occurrence. All of the nominees have consented to be named as nominees and to serve as
directors if elected.
Positions with Company,
Business Experience, and
Name Age Other Directorships
Nominees for Election
CLASS 1 (Term expires in 1994)
<S> <C> <C>
Anthony F. Colao 66 Director since 1987; Senior Vice President of the Company since 1987;
formerly Partner of Coopers & Lybrand, accountants, for more than five
years prior to 1987, which firm has been retained by the Company as
independent accountants during more than the last two fiscal years.
John C. Collopy 73 Director since 1980; Consultant to Old Republic Title Holding, Inc.
(formerly Founders Title Group, Inc.), a subsidiary of the Company.
Formerly Chairman of the Board of Founders Title Group, Inc. for more than
the past five years.
Kurt W. Kreyling 72 Director since 1974; Retired; formerly President and Treasurer of Kreyling
Company, wholesaler of floor coverings, Evansville, Indiana.
William G. White, Jr. 65 Director since 1993; Retired; formerly President of The First Federal
Savings Bank, Winston-Salem, North Carolina; Consultant to Southern
National Bank, Winston-Salem, North Carolina; Director of Republic Mortgage
Insurance Company, a subsidiary of the Company for more than the past five
years. Director of Savers Life Insurance Company, Winston-Salem, North
Carolina.
A. C. Zucaro 54 Director since 1976; Chairman of the Board of the Company and various
subsidiaries since January, 1993; Chief Executive Officer of the Company
and various subsidiaries since August, 1990; President of the Company and
various subsidiaries for more than the past five years.
CLASS 2 (Term expires in 1995)
John W. Popp 71 Director since 1993; Retired; formerly Partner of KPMG Peat Marwick,
accountants. Director of Bituminous Casualty Corporation and Great West
Casualty Company, subsidiaries of the Company for more than the past five
years. Director of SCOR U.S. Corporation. Positions with Company,
Business Experience, and
Jimmy A. Dew 53 Director since 1980; Executive Vice President of Republic Mortgage
Insurance Company, a subsidiary of the Company, for more than the past five
years.
Darrel M. Holt 78 Director since 1978; Owner, Holt Properties; Retired Chairman, The Towle
Company, mortgage banking and real estate.
David Sursa 68 Director since 1969; Chairman of the Board, NBD Bank, N.A., Muncie,
Indiana, for more than the past five years.
CLASS 3 (Term expires in 1996)
Peter Lardner 62 Director since 1985; Chairman and President of Bituminous Casualty
Corporation, a subsidiary of the Company, for more than the past five
years.
Wilbur S. Legg 71 Director since 1969; Retired; formerly Partner of Lord, Bissell & Brook,
attorneys, Chicago, Illinois, which firm has been retained by the Company
as counsel during more than the last two fiscal years.
William A. Simpson 52 Director since 1980; Senior Vice President of the Company and President of
Republic Mortgage Insurance Company, a subsidiary of the Company, for more
than the past five years. Director of Salem Trust Bank, Winston-Salem,
North Carolina.
Arnold L. Steiner 56 Director since 1974; Retired; formerly President of Steiner Bank,
Birmingham, Alabama.
William R. Stover 71 Director since 1969; Retired; prior to January 1993, Chairman of the Board
of the Company and various subsidiaries for more than the preceding five
years; Chief Executive Officer of the Company and various subsidiaries
prior to August, 1990.
</TABLE>
Board of Directors Recommendation
The Board of Directors recommends a vote FOR the Class 1
directors that are listed as nominees. Proxies solicited by the
Board of Directors will be voted for the election of these
nominees unless shareholders specify to the contrary in their
proxies.
PROPOSAL 2 - AMENDMENT TO THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION
PROPOSAL NO. 2
This proposal is to amend the Company's Restated Certificate
of Incorporation to change the par value of the Company's
Preferred Stock.
Background
The Company's Board of Directors has approved and
recommended to the shareholders for their approval an amendment
to Article FOURTH of the Company's Restated Certificate of
Incorporation to change the par value of the Company's Preferred
Stock from non par value stock to par value stock with a par
value of one cent (1) a share. A copy of the proposed amendment
is attached hereto as Exhibit A.
Reasons for the Amending Article FOURTH
As a Delaware corporation, the Company is required to pay
certain Delaware franchise taxes which are based, in part, on the
number and the par value of shares authorized in the Company's
Restated Certificate of Incorporation. The Company's Common
Stock has a par value of One Dollar ($1.00) a share and the
Company's Preferred Stock is without par value. Under Delaware
law the computation of franchise taxes for shares without par
value is made by multiplying the number of authorized shares of
capital stock without par value by $100. Thus a change in the
Company's Preferred Stock so that it has a par value of one cent
(1) a share will result in a reduction of future Delaware
franchise taxes. Although the exact amount of future savings
cannot be determined, the management of the Company believes that
the anticipated savings warrant the adoption of this amendment.
The proposed amendment will have no effect on any of the
rights and privileges now possessed by holders of the Company's
Preferred Stock.
If approved by the shareholders, the proposed amendment to
Article FOURTH would become effective upon the filing with the
Secretary of State of Delaware of a Certificate of Amendment to
the Company's Restated Certificate of Incorporation, which filing
would take place shortly after the Annual Meeting.
Board of Directors Recommendation
The Board of Directors recommends a vote FOR the amendment
to Article FOURTH of the Company's Restated Certificate of
Incorporation. Proxies solicited by the Board of Directors will
be voted in favor of this proposed amendment unless shareholders
specify to the contrary in their proxies.
VOTING PROCEDURES
The General Corporation Law of the State of Delaware
specifies that in the absence of contrary requirements in a
corporation's Certificate of Incorporation or By-laws, the votes
on matters at Shareholders Meetings are decided as follows: (1)
Directors are elected by a plurality of the shares who are
present in person or by proxy at the meeting and who are entitled
to vote in the election, and (2) amendments to Restated
Certificates of Incorporation are determined by the affirmative
vote of the majority of shares of the Company's capital stock
outstanding who are entitled to vote.
The Company's Restated Certificate of Incorporation and By-
laws do not require any different treatment for any of the
proposals being considered at the Company's Annual Shareholders
Meeting.
The Company's Restated Certificate of Incorporation and its
By-laws are silent on the mechanics of voting. As a result, the
General Corporation Law of the State of Delaware is controlling.
Under Delaware law the votes at the Company's Annual Shareholders
Meeting will be counted by the inspectors of election required to
be appointed at the meeting. The inspectors are charged with
ascertaining the number of shares outstanding, the number of
shares present, whether in person or by proxy, and the validity
of all proxies. The inspectors are entitled to rule on any
voting challenges and are responsible for the tabulation of the
voting results.
Under Delaware law, abstentions are counted in determining
the quorum of the meeting and as having voted on any proposal on
which an abstention is voted. As a result, on those proposals
which require a plurality vote of the shares at the meeting who
are entitled to vote, the vote of an abstention has no effect.
However, on those proposals which require an affirmative vote of
the majority of shares outstanding who are entitled to vote, the
vote of an abstention has the effect of a vote against the
proposal.
Where brokers report a non-vote, the shares reported are
counted for the determination of a quorum for the meeting but
they are not counted as having voted on the proposal where there
is a non-vote. As a result, on those proposals which require a
plurality vote of the shares at the meeting who are entitled to
vote, a non-vote will have no effect. However, on those
proposals which require an affirmative vote of the majority of
shares outstanding who are entitled to vote, a non-vote has the
effect of a vote against the proposal.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company's consolidated financial statements for the year
ended December 31, 1993 were examined by Coopers & Lybrand,
independent certified public accountants. No decision has as yet
been made with respect to the selection of independent certified
public accountants for fiscal 1994. A member of Coopers & Lybrand
is expected to attend the annual meeting with an opportunity to
make an appropriate statement if the representative desires to do
so and will be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
In order for a proposal by a shareholder of the Company to
be included in the Company's proxy statement and form of proxy
for the 1995 Annual Meeting of Shareholders, the proposal must be
received by the Company no later than December 1, 1994.
OTHER MATTERS
The Company knows of no matters, other than those referred
to herein, which will be presented at the meeting. If, however,
any other appropriate business should properly be presented at
the meeting, the proxies named in the enclosed form of proxy will
vote the proxies in accordance with their best judgment.
EXPENSES OF SOLICITATION
All expenses incident to the solicitation of proxies by the
Company will be paid by the Company. In addition to solicitation
by mail, the Company has retained Georgeson & Co. (with respect
to street name holders) and D.F. King & Company, Inc. (with
respect to individual shareholders) both of New York City, to
assist in the solicitation of proxies, including delivery of
proxy materials. Fees and expenses for this solicitation are
expected to be approximately $13,000. The Company intends to
reimburse brokerage houses and other custodians, nominees and
fiduciaries for reasonable out-of-pocket expenses incurred in
forwarding copies of solicitation material to beneficial owners
of Common Stock held of record by such persons. In a limited
number of instances, regular employees of the Company may solicit
proxies in person or by telegraph or telephone.
By order of the Board of Directors.
SPENCER LEROY III
Secretary
Chicago, Illinois
March 31, 1994
Exhibit A
RESOLVED, that Article FOURTH of the Restated Certificate of
Incorporation of the Corporation be amended in the following
manner:
The first paragraph of Article FOURTH is amended to read as
follows:
"FOURTH: The total number of shares of all classes of
capital stock which the Corporation shall have authority to
issue is Three Hundred Seventy Five Million (375,000,000)
shares, divided into three classes as follows:
Seventy Five Million (75,000,000) shares of Preferred Stock
of the par value of one cent (1) per share (Preferred
Stock).
Two Hundred Fifty Million (250,000,000) shares of Common
Stock of the par value of $1.00 per share (Common Stock).
Fifty Million (50,000,000) shares of Class B Common Stock of
the par value of $1.00 per share (Class B Common Stock)."
OLD REPUBLIC INTERNATIONAL CORPORATION
Proxy Solicited on Behalf of the Board of Directors
P
R
O
X
Y The undersigned hereby appoints PAUL D. ADAMS, SPENCER LEROY
III and A. C. Zucaro or any one of them (with full power of
substitution in each) the proxy or proxies of the
undersigned to vote, as designated below, all shares of Old
Republic International Corporation Common and Preferred
Stock that the undersigned is entitled to vote at the annual
meeting of the shareholders to be held in Room 2300 at the
offices of Old Republic International Corporation, 307 North
Michigan Avenue, Chicago, Illinois 60601, on May 13, 1994,
at 3:00 P.M., Chicago Time, or at any adjournment thereof.
Election of five Class 1 Directors. Nominees:
Anthony L. Colao, John C. Collopy, Kurt W. Kreyling,
William G. White, Jr. and A. C. Zucaro
This proxy is revocable at any time before it is exercised.
This proxy when properly executed will be voted in the
manner directed herein by the undersigned shareholder. If
no direction is made, this proxy will be voted for proposals
1 and 2 and in the proxy's discretion upon such other
business as may properly come before the meeting or any
adjournment thereof.
(continued, and to be signed and dated, on reverse side)
Please mark your
votes as in this
example
This proxy when properly executed will be voted in
the manner directed herein by the undersigned
shareholder. If no direction is made, this proxy
will be voted FOR proposals 1 and 2.
The Board of Directors recommends a vote FOR Proposals 1
and 2.
FOR WITHHELD
1. Election of Directors ___ ___
FOR AGAINST ABSTAIN
2. To change the par value of
the Company's authorized
Preferred Stock ___ ___ ___
3. In their discretion upon
such other business as may
properly come before the
meeting or any adjournment
thereof. ___ ___ ___
_____________________________________________________
For, except vote withheld from the following nominee(s):
_______________________________________________________________________
Please sign exactly as your name or names appears hereon. Joint owners
should each sign personally. If signing in fiduciary or representative
capacity, give full title as such.
ESSOP EXPLANATION CARD
March 31, 1994
To Participants in the Old Republic International
Corporation Employees Savings and Stock Ownership Plan
Enclosed with this mailing is a copy of a proxy statement
relating to the Annual Meeting of Shareholders of Old Republic
International Corporation to be held May 13, 1994. The Old
Republic International Corporation Employees Savings and Stock
Ownership Plan, in which you are a participant, holds a number of
shares of Old Republic Series D Preferred Stock and Common Stock,
each of which is entitled to one (1) vote at the meeting. Under
the terms of the Plan, you as a participant are entitled to vote
a portion of this stock held by the Plan, the value of which has
been allocated to your account. By returning the enclosed proxy
card to us you will assure that this stock will be voted in
accordance with your instructions. If you fail to exercise these
voting rights, the shares will be voted by the Administration
Committee under this Plan.
The Administration Committee
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Old Republic International Corporation
(Name of Registrant as Specified In Its Charter)
Old Republic International Corporation
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0.11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:1
4) Proposed maximum aggregate value of transaction:
1 Set forth the amount on which the filing fee is calculated
and state how it was determined
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
