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 shareholdersof Old Republic
International Corporation, a Delaware corporation(the "Company"), 307 North
Michigan Avenue, Chicago, Illinois60601, in connection with the solicitation of
proxies by itsBoard of Directors for use at the annual meeting of shareholders
to be held on May 13, 1994 and any adjournments thereof. Theapproximate date on
which this proxy statement and theaccompanying proxy are first being sent to the
shareholders isMarch 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 10,859 <F3> **
Anthony F. Colao 17,540 <F3> 0.1
Jimmy A. Dew 41,212 <F3> 0.2
Peter Lardner 13,656 <F3> 0.1
Spencer LeRoy III 730 <F3> **
William A. Simpson 42,477 <F3> 0.2
A. C. Zucaro 232,925 <F3> 1.0
All executive officers and directors, as
a group 359,399 <F3> 1.6
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 26,899 738 <F3> 19,650 47,287 0.1
executive officers' Anthony F. Colao 65,544 2,165 <F3> 2,238 69,947 0.1
beneficial John C. Collopy 63,506<F7> 63,506 0.1
ownership Jimmy A. Dew 23,124 1,819 <F3> 133,270<F8> 158,213 0.3
Darrel M. Holt 27,383 27,383 **
Kurt W. Kreyling 163,812<F9> 163,812 0.3
Peter Lardner 24,970 1,032<F3> 70,595<F10> 96,597 0.2
Wilbur S. Legg 21,552<F11> 21,552 **
Spencer LeRoy III 7,500 463<F3> 2,538<F12> 10,501 **
John W. Popp 2,000 2,000 **
William A. Simpson 23,624 1,875<F3> 102,350<F13> 127,849 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 23,523<F3> 176,654<F16><F18>306,389 0.5
All executive officers
and directors, as a group 277,873 31,615<F4> 1,810,255 2,119,743 3.7
<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 plur 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 major shares outstanding
who are entitled to vote, the vote of an abstention has 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:
[ ] Preliminary Proxy Statement
[x] 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
[x] 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:
$125.00
2) Form, Schedule or Registration Statement No.:
Preliminary Proxy Statement
3) Filing Party:
Old Republic International Corporation
4) Date Filed:
March 7, 1994
