NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
|
TIME
AND
DATE .................................................................................
|
3:00
P.M., Central Daylight Time, Friday,
May
23, 2008
|
|
PLACE
.....................................................................................................
|
Old
Republic Building
22nd
Floor Conference Center
307
N. Michigan Avenue
Chicago,
Illinois 60601
|
|
ITEMS
OF BUSINESS
...........................................................................
|
· To
elect five members of the Class 3
Board of
Directors, each for a term of three
years.
|
|
· To
ratify the selection of PricewaterhouseCoopers LLP
as the Company’s independent registered public
accounting firm for 2008.
|
||
· To
transact such other business as may properly
come before the Meeting and any adjournment or
postponement
thereof.
|
||
RECORD
DATE
.....................................................................................
|
You
can vote if you are a shareholder of record on
March
20, 2008.
|
|
ANNUAL
REPORT TO SHAREHOLDERS
.......................................
|
Our
annual report to shareholders for the year 2007 is printed together with
this proxy statement. The Company’s Forms 10-K and 10-Q may be also
accessed through our Website at www.oldrepublic.com
or by writing to Investors Relations at the above Company
address.
|
|
PROXY
VOTING
....................................................................................
|
It
is important that your shares be represented and voted at the Meeting. You
can vote your shares by completing and returning your proxy card or by
voting on the Internet or by telephone.
|
|
|
||
April 1, 2008 | By Order of the Board of Directors | |
Spencer
LeRoy III
Senior Vice
President, General Counsel
and
Secretary
|
Page
No.
|
Table
of Contents
|
|
1
|
General
Information
|
|
1
|
Voting
Procedures
|
|
1
|
Shareholder Proposals for the
2009 Annual Meeting
|
|
1
|
Other Matters for the
Shareholder Meeting
|
|
1
|
Electronic Delivery of Proxy
Material
|
|
2
|
Expenses of
Solicitation
|
|
2
|
Principal
Holders of Securities
|
|
3
|
Compliance with Section 16(a)
of the Securities Exchange Act of 1934
|
|
3
|
Item
1: Election of Directors
|
|
4
|
Continuing
Directors
|
|
4
|
Board of Directors’
Recommendation
|
|
4
|
Corporate
Governance Overview
|
|
4
|
Procedures for the Approval of
Related Person Transactions
|
|
5
|
Board of Directors’
Responsibilities and Independence
|
|
5
|
Board
and Committee Membership
|
|
6
|
Committees
of the Board
|
|
6
|
Executive
Committee
|
|
6
|
Audit
Committee
|
|
6
|
Nominating
Committee
|
|
7
|
Compensation
Committee
|
|
7
|
Item
2: Ratification of the Selection of an Independent Registered
Public Accounting Firm
|
|
8
|
Board of Directors
Recommendation
|
|
8
|
Audit Committee
Report
|
|
9
|
Compensation Committee
Interlocks and Insider Participation
|
|
9
|
Compensation Committee
Report
|
|
9
|
Directors’
Compensation
|
|
10
|
Compensation
Discussion and Analysis
|
|
10
|
Compensation Philosophy and
Objectives
|
|
10
|
Executive Behavior Considered
when Making Compensation Decisions
|
|
10
|
Elements of Compensation and
the Factors and Rationale in Determining Compensation
Amounts
|
|
10
|
Annual
Salary
|
|
11
|
Incentive
Awards
|
|
11
|
Stock
Options
|
|
12
|
Other
Benefits
|
|
12
|
Change of Control, Severance
or Retirement
|
|
12
|
Financial
Restatement
|
|
12
|
Tax Deductibility of
Compensation
|
|
12
|
Compensation
Consultant
|
|
12
|
Stock Ownership
Guidelines
|
|
13
|
March 2008 Compensation
Committee Annual Meeting
|
|
14-15
|
Summary
Compensation Table
|
|
15
|
Stock
Options
|
|
15
|
Grants of Plan Based
Awards
|
|
16
|
Exercise of Stock
Options
|
|
16
|
Equity Compensation Plan
Information
|
|
17
|
Outstanding Equity Awards at
Fiscal Year End
|
|
18
|
Performance
Recognition Plans
|
|
19
|
Nonqualified Deferred
Compensation
|
|
19
|
Pension
Plans
|
|
19
|
Pension
Benefits
|
|
20
|
Employee
Savings and Stock Ownership Plan
|
|
20
|
Republic
Mortgage Insurance Company (“RMIC”) Profit Sharing Plan
|
|
20
|
Great
West Casualty Company (“GWC”) Profit Sharing Plan
|
|
Amount
and
|
||||||
Nature
of
|
Percent
|
|||||
Name
of
|
Beneficial
|
Of
|
||||
Title
of Class
|
Beneficial
Owner
|
Ownership
|
Class(*)
|
|||
Common
Stock
|
||||||
Shareholders’
beneficial ownership
|
Franklin
Resources, Inc.
|
18,597,358
|
(1)
|
8.1
|
||
of
more than 5% of the Common
|
One
Franklin Parkway
|
|||||
Stock
(excluding directors)
|
San
Mateo, California 94403-1906
|
|||||
JP
Morgan Chase & Co.
|
16,462,449
|
(1)
|
7.1
|
|||
270
Park Ave
|
||||||
New
York, New York 10017
|
||||||
Franklin
Mutual Advisors, LLC.
|
16,428,510
|
(1)
|
7.1
|
|||
101
John F Kennedy Parkway
|
||||||
Short
Hills, NJ 07078
|
||||||
AXA
Financial, Inc.
|
13,795,186
|
(1)
|
6.0
|
|||
1290
Avenue of the Americas
|
||||||
New
York, New York 10104
|
Shares
|
|
Percent
|
||||||||||
|
Subject
|
Shares
Held by
|
Other
Shares
|
Of
|
||||||||
Common
Stock
|
Name
of
Beneficial
Owner
|
to
Stock
Options(*)
|
Employee
Plans
(*)(2)(3)
|
Benefically
Owned(*)
|
Total
|
Class
(*)
|
Directors’
and
|
Harrington
Bischof
|
-
|
-
|
20,239
|
20,239
|
(4)
|
**
|
|||||
Executive
Officers’
|
Jimmy
A. Dew
|
624,626
|
136,386
|
545,538
|
1,306,550
|
(5)
|
0.6
|
|||||
beneficial
|
John
M. Dixon
|
-
|
-
|
14,156
|
14,156
|
**
|
||||||
ownership
|
James
A. Kellogg
|
92,657
|
36,319
|
375,562
|
505,538
|
0.2
|
||||||
Leo
E. Knight, Jr.
|
-
|
-
|
11,500
|
11,500
|
**
|
|||||||
Spencer
LeRoy, III
|
343,044
|
13,371
|
76,716
|
433,131
|
(6)
|
0.2
|
||||||
Karl
W. Mueller
|
44,425
|
1,214
|
2,250
|
47,889
|
**
|
|||||||
Christopher
S. Nard
|
381,469
|
9,058
|
1,000
|
391,527
|
0.2
|
|||||||
John
W. Popp
|
-
|
-
|
20,000
|
20,000
|
**
|
|||||||
R.
Scott Rager
|
64,438
|
28,306
|
500
|
93,244
|
**
|
|||||||
William
A. Simpson
|
613,907
|
69,473
|
368,488
|
1,051,868
|
(7)
|
0.5
|
||||||
Arnold
L. Steiner
|
-
|
-
|
826,438
|
826,438
|
(8)
|
0.4
|
||||||
Fredricka
Taubitz
|
-
|
-
|
12,000
|
12,000
|
**
|
|||||||
Charles F.
Titterton
|
-
|
-
|
20,996
|
20,996
|
(9)
|
**
|
||||||
Dennis
Van Mieghem
|
-
|
-
|
14,050
|
14,050
|
(10)
|
**
|
||||||
Steven
R. Walker
|
-
|
-
|
14,000
|
14,000
|
(11)
|
**
|
||||||
Rande
K. Yeager
|
37,626
|
17,838
|
9,688
|
65,152
|
**
|
|||||||
Aldo
C. Zucaro
|
1,349,063
|
328,357
|
1,030,080
|
2,711,482
|
1.2
|
|||||||
Executive
Officer and
|
||||||||||||
Directors,
as a group (19)
|
3,631,405
|
675,679
|
3,372,326
|
7,679,410
|
3.3
|
*
|
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.
|
(1)
|
Reflects
the number of shares shown in the most recent Schedule 13G filings with
the Securities and Exchange Commission through February 15, 2008. Franklin
Resources, Inc. reports that Franklin Advisory Services, LLC and Franklin
Templeton Portfolio Advisors, Inc. have sole voting power for 18,501,283
shares and 3,875 shares respectively and sole dispositive power for
18,593,483 shares and 3,875 shares respectively. JP Morgan Chase & Co.
reports that it has sole and shared voting power for 13,096,235 and
2,094,206 shares, respectively, and sole and shared dispositive power for
13,989,170 and 2,471,238 shares, respectively. Franklin Mutual Advisers,
LLC reports that it has sole voting and dispositive power for all shares
reported. AXA Financial, Inc. reports that it has sole voting and
dispositive powers for 11,588,445 and 13,795,061 shares, respectively, and
shared voting and dispositive power for 34,875 and 125 shares,
respectively.
|
(2)
|
Under
the terms of the Old Republic International Corporation Employees
Savings and Stock Ownership Plan (“ESSOP”), a participant is entitled to
vote the Company stock held by the ESSOP, the shares of which have been
allocated to the participant's account. The Executive Committee of the
Company, pursuant to the ESSOP, is authorized to vote the Company stock
held by the ESSOP until such time as the shares of such stock has been
allocated to a participant's account or where a participant fails to
exercise his or her voting rights. Additionally, the Executive Committee
may be deemed to have investment power with respect to stock held by
the ESSOP. The Executive Committee is composed of Messrs. Bischof, Dixon,
Popp, Steiner and Zucaro. Under the rules of the Securities and Exchange
Commission, each of them may be deemed to be the beneficial owner of such
shares of Common Stock by virtue of such shared voting and investment
power.
|
(3)
|
Includes
only the shares that have been allocated to the employer matching and
employee savings accounts of the director or Executive Officer as a
participant in the ESSOP or other Profit Sharing Plans sponsored by
subsidiaries. Excludes those shares for which the director or Executive
Officer may be deemed to have investment and voting power as a result of
being a member of the Executive Committee. Includes shares of the
Company’s stock held by the RMIC Profit Sharing Plan for Messrs. Dew and
Simpson and shares of the Company’s stock held by the Great West Casualty
Corporation Profit Sharing Plan for Mr.
Rager.
|
(4)
|
Includes
8,437 shares held in trust for Mr. Bischof’s
benefit.
|
(5)
|
Includes
209,471 shares owned by Mr. Dew's
wife.
|
(6)
|
Includes
16,617 shares held in an IRA trust for Mr. LeRoy's
benefit.
|
(7)
|
Includes
134,648 shares owned by Mr. Simpson's
wife.
|
(8)
|
Includes
270,237 shares owned by Mr. Steiner directly, 465,000 shares held in trust
for Mr. Steiner's children, for which he is a co-trustee, and 91,201
shares held by the Steiner Foundation for which Mr. Steiner disclaims
beneficial ownership.
|
(9)
|
Includes
4,958 shares held in IRA and SEP-IRA trusts for Mr. Titterton’s
benefit.
|
(10)
|
Includes
1,250 shares owned by Mr. Van Mieghem’s wife and 6,125 shares held in
trust for Mr. Van Mieghem’s
benefit.
|
(11)
|
Includes
10,925 shares held in IRA and SEP-IRA trusts for Mr. Walker’s
benefit.
|
Positions
with Company, Business Experience and
|
|||||
Name
|
Age
|
Other
Directorships
|
|||
Nominees for Election
|
|||||
CLASS 3 (Term to expire
in 2008)
|
|||||
Leo
E. Knight, Jr.
|
62
|
Director,
since 2006; formerly Chairman and Chief Executive Officer of National City
Mortgage Company, Dayton, Ohio, an insured of the Company’s subsidiary,
Republic Mortgage Insurance Company, for more than the past five years.
Mr. Knight is also a director of Merscorp, Inc.
|
|||
William
A. Simpson
|
66
|
Director
since 1980; Chairman of Republic Mortgage Insurance Company, a subsidiary
of the Company, for more than the past five years.
|
|||
Arnold
L. Steiner
|
70
|
Director
since 1974; retired for more than the past five years; formerly President
of Steiner Bank, Birmingham, Alabama.
|
|||
Fredricka
Taubitz
|
64
|
Director
since 2003; until 2000, Executive Vice President and Chief Financial
Officer of Zenith National Insurance Corp.; until 1985, Partner with the
accounting firm of Coopers & Lybrand, now PricewaterhouseCoopers
LLP.
|
|||
Aldo
C. Zucaro
|
68
|
Director
since 1976; Chairman of the Board and Chief Executive Officer of the
Company and various subsidiaries for more than the past five
years.
|
|||
Continuing Members
|
|||||
CLASS 1 (Term to expire
in 2009)
|
|||||
Harrington
Bischof
|
73
|
Director
since 1997; President of Pandora Capital Corporation since 1996; formerly
Senior Advisor, Prudential Securities, Inc.
|
|||
Charles
F. Titterton
|
66
|
Director
since 2004; Formerly director - Insurance Group with Standard & Poor’s
Corp. until 2003.
|
|||
Steven
R. Walker
|
62
|
Director
since 2006; formerly Senior Counsel and Partner with Leland, Parachini,
Steinberg, Matzger & Melnick, LLP, attorneys, San Francisco,
California, which has provided legal services to Old Republic Title
Company, an Old Republic subsidiary, during more than the last five
years.
|
|||
Continuing Members
|
|||||
CLASS 2 (Term to expire
in 2010)
|
|||||
Jimmy
A. Dew
|
67
|
Director
since 1980; Vice Chairman of Republic Mortgage Insurance Company, a
subsidiary of the Company, for more than the past five
years.
|
|||
John
M. Dixon
|
68
|
Director
since 2003; Director of Amsted Industries Incorporated, Chicago, Illinois;
formerly Chief Executive Partner with the law firm of Chapman and Cutler,
Chicago, Illinois until his retirement in 2002.
|
|||
John
W. Popp
|
85
|
Director
since 1993; formerly Partner with the accounting firm of KPMG LLP until
his retirement in 1982.
|
|||
Dennis
P. Van Mieghem
|
67
|
Director
since 2004; formerly Partner with the accounting firm of KPMG LLP until
his retirement in 1998.
|
|||
Independent
|
Other
|
Committee
Membership
|
||||
Director
|
Directors(a)
|
Directors(b)
|
Executive
|
Audit
|
Nominating
|
Compensation
|
Harrington
Bischof
|
X
|
X
|
X(c)
|
X
|
||
Jimmy
A. Dew
|
X
|
|||||
John
M. Dixon
|
X
|
X
|
X
|
X(c)
|
||
Leo
E. Knight, Jr.
|
X
|
X(d)(e)
|
||||
John
W. Popp
|
X
|
X
|
X(c)(e)
|
X
|
||
William
A. Simpson
|
X
|
|||||
Arnold
L. Steiner
|
X(f)
|
X
|
X
|
X
|
||
Fredricka
Taubitz
|
X
|
X(d)(e)
|
X
|
|||
Charles
F. Titterton
|
X
|
X(e)
|
X(d)
|
|||
Dennis
P. Van Mieghem
|
X
|
X(e)
|
X(d)
|
|||
Steven
R. Walker
|
X
|
X
|
X
|
|||
Aldo
C. Zucaro
|
X
|
X(c)
|
||||
Number
of scheduled meetings during 2007
|
4
|
4
|
5
|
4
|
4
|
3
|
Number
of written consents during 2007
|
-
|
2
|
-
|
-
|
-
|
Executive
Committee
|
|||
Harrington
Bischof
|
John
M. Dixon
|
||
John
W. Popp
|
Arnold
L. Steiner
|
||
Aldo
C. Zucaro, Chairman
|
Audit
Committee
|
||
John
W. Popp, Chairman
|
Leo
E. Knight, Jr., Vice-Chairman
|
|
Charles
F. Titterton
|
Fredricka
Taubitz, Vice-Chairman
|
|
Dennis
P. Van Mieghem
|
Nominating Committee | ||
Harrington
Bischoff, Chairman
|
John
M. Dixon
|
|
Arnold
L. Steiner
|
Charles
F. Titterton, Vice-Chairman
|
|
Steven
R. Walker
|
Compensation
Committee
|
||
John
M. Dixon, Chairman
|
Arnold
L. Steiner
|
|
Harrington
Bischof
|
Fredricka
Taubitz
|
|
John
W. Popp
|
Dennis
P. Van Mieghem, Vice-Chairman
|
|
Steven
R. Walker
|
Type of Fees |
|
2007
|
2006(a)
|
2005
|
2004
|
2003
|
||||
Audit
Fees
|
$
3,222,527
|
$
3,994,716
|
$
3,935,418
|
$
6,616,745
|
$
1,772,879
|
|||||
Audit
Related Fees (b)
|
372,152
|
495,238
|
569,707
|
456,184
|
344,163
|
|||||
Tax
Fees
|
8,481
|
7,093
|
8,772
|
8,199
|
-
|
|||||
All
Other Fees
|
3,816
|
3,390
|
3,000
|
8,411
|
8,145
|
|||||
Total
|
$
3,606,976
|
$
4,500,437
|
$
4,516,897
|
$
7,092,539
|
$
2,125,187
|
|||||
(a)
The total 2006 fees of $4,500,437 shown above are $306,240 higher than
previously reported, and reflect final billing adjustments by PwC
subsequent to the preparation of the 2007 Proxy
Statement.
|
||||||||||
(b)
Includes fees relating to audits of the Company’s various benefit plans
and actuarial opinions of the Company’s loss and loss adjustment expense
reserves required by insurance regulations. In 2006 the audits of some of
the benefit plans were performed by other auditors for aggregate fees of
approximately $108,000. For 2007, certain actuarial opinions required by
insurance regulations were provided by a qualified actuary other than
PwC.
|
(a)
Name
|
(b)
Fees
Earned
Or
Paid in
Cash
|
(c)
Option
Awards
|
(d)
All
Other
Compensation
|
(e)
Total
|
||||
Harrington
Bischof
|
$130,000
|
-
|
-
|
$130,000
|
||||
Jimmy
A. Dew
|
-
(1)
|
-
(2)
|
- (3)(5)
|
-
|
||||
John
M. Dixon
|
120,000
|
-
|
-
|
120,000
|
||||
Leo
E. Knight, Jr.
|
96,000
|
-
|
-
|
96,000
|
||||
John
W. Popp
|
135,000
|
-
|
-
|
135,000
|
||||
William
A. Simpson
|
-
(1)
|
- (2)
|
- (3)(4)(5)
|
-
|
||||
Arnold
L. Steiner
|
130,000
|
-
|
-
|
130,000
|
||||
Fredricka
Taubitz
|
110,000
|
-
|
-
|
110,000
|
||||
Charles
F. Titterton
|
110,000
|
-
|
-
|
110,000
|
||||
Dennis
Van Mieghem
|
110,000
|
-
|
-
|
110,000
|
||||
Steven
R. Walker
|
96,000
|
-
|
-
|
96,000
|
|
(1)
|
Messrs.
Dew and Simpson were not paid any director fees during 2007 but were paid
salaries of $205,600 and $225,600, respectively, as Vice-Chairman and
Chairman, respectively, of RMIC.
|
|
(2)
|
On
March 16, 2007, Messrs. Dew and Simpson received employee stock option
awards under the Company’s Incentive Compensation Plan of 40,000 and
50,000 shares, respectively, valued at $187,500 and $234,000,
respectively. These options were valued on the basis of the Black-Scholes
model. The significant assumptions for this model are set forth in
footnote 3 following the Summary Compensation
Table.
|
|
(3)
|
No
cash and deferred compensation awards were paid to Messrs. Dew or Simpson
in 2008 attributable to 2007, as mortgage guaranty operations produced an
operating loss.
|
|
(4)
|
During
2007, Mr. Simpson exercised stock options granted in 1998 and 1999 for a
total of 140,625 shares, realizing pre-tax gains of
$681,469.
|
|
(5)
|
During
2007, Messrs. Dew and Simpson also received, respectively: (a) matching
contributions to the Company’s ESSOP and the RMIC 401(k) Profit Sharing
Plan of $1,800 and $22,000; (b) $2,591 each in group term life insurance
values; (c) $3,372 and $4,426 for the RMIC Health reimbursement program;
(d) $9,409 and $3,480 for club dues; (e) $9,696 and $11,286 in personal
use value for vehicles supplied to them for Company purposes; (f) and
$23,558 and $33,484 for interest on deferred balances under the RMIC Key
Employee Performance Recognition
Plan.
|
|
●
|
Ability
in setting and promoting the best interests of the Company’s shareholders,
the beneficiaries of its subsidiaries’ insurance policies, and those of
other stakeholders;
|
|
●
|
Adherence
to high ethical standards that promote and protect the Company’s good name
and reputation.
|
1)
|
Are
reasonably competitive in the context of prevailing salary scales in the
insurance industry; and
|
2)
|
Provide
a fixed, reasonable source of annual income for each executive
position.
|
CEO
of the Company
|
6
times
|
|
President
of the Company
|
4
times
|
|
Other
senior officers of the Company and senior officers of
|
||
subsidiaries with allocated
capital in excess of $50 million
|
3
times
|
|
Senior
officers of subsidiaries with allocated capital of less than $50
million
|
1.5
times
|
|
1.
|
It
approved system-wide annual salary review guidelines, including increases
in the base annual salaries of Messrs. Nard and
Yeager.
|
2.
|
It
approved cash and/or deferred additional bonuses outside of formula-driven
calculations for eligible employees under the Old Republic Key Employees
Performance Recognition Plan (“KEPRP”), as well as for several Mortgage
Guaranty bonus and profit sharing plans. The additional and total awards
granted pursuant to these as well as other segments’ profit sharing awards
were as follows:
|
($
in Thousands)
|
||||||||
General
|
Mortgage
|
|||||||
ORI
|
Group
|
Guaranty
|
Title
|
|||||
KEPRP
|
Plans
|
Plans
|
Plans
|
|||||
Awards
within formula provisions
|
$226.8
|
$11,897.5
|
$3,030.2
|
$1,751.0
|
||||
Additional
awards outside formula provisions
|
1,148.2
|
-
|
902.4
|
-
|
||||
Total
awards 2008
|
$1,375.0
|
$11,897.5
|
$3,932.6
|
$1,751.0
|
||||
Total
awards 2007
|
$1,917.3
|
$10,653.3
|
$11,985.2
|
$4,969.6
|
(*)
|
Amounts
in the above table are exclusive of Old Republic’s system-wide 401(k)
ESSOP Plan costs and those of other 401(k) plans not necessarily related
to earnings growth and return on equity
objectives.
|
|
3.
|
It
approved awards of options on 1,500,000 shares valued, pursuant to the
Black Sholes methodology, at approximately $1,763,044 as of the award
date. Except for Messrs. Nard and Yeager who were granted
options on 100,000 and 30,000 shares, respectively, none of the other four
senior executives named above received any
options.
|
|
4.
|
It
also approved the 2008 matching contribution percentages for the Company’s
401(k) ESSOP, the minimum required return on equity percentage applicable
to all profit sharing plans (5.91% for 2008 vs. 5.93% for 2007), and the
peer group companies utilized in the five year comparative stock
performance chart included under Part II, Item 5 of Old Republic’s Annual
Report on Form 10-K.
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
|||||||
Change
in
|
||||||||||||||
Pension
Value
|
||||||||||||||
and
Nonqualified
|
||||||||||||||
Deferred
|
||||||||||||||
Name
and
|
Option
|
Compensation
|
All
Other (5)
|
Total
|
||||||||||
Principal
Positions
|
Year
|
Salary
(1)
|
Bonus
(2)
|
Awards(3)
|
Earnings
(4)
|
Compensation
|
($)
|
Aldo
C. Zucaro
|
2007
|
$767,813
|
$38,090
|
$936,000
|
$343,737
|
$17,719
|
$2,103,359
|
|||||||
Chairman
& Chief
|
2006
|
741,146
|
726,019
|
1,528,800
|
283,680
|
20,237
|
3,299,882
|
|||||||
Executive
Officer
|
||||||||||||||
Karl
W. Mueller
|
2007
|
358,333
|
190,927
|
109,313
|
11,232
|
7,527
|
677,332
|
|||||||
Senior
Vice President &
|
2006
|
341,667
|
266,934
|
68,860
|
15,044
|
9,941
|
702,446
|
|||||||
Chief Financial
Officer
|
||||||||||||||
James
A. Kellogg
|
2007
|
467,400
|
18,632
|
157,783
|
(5,968)
|
13,402
|
651,249
|
|||||||
President
& Chief
|
2006
|
413,233
|
449,186
|
98,344
|
104,700
|
17,737
|
1,083,200
|
|||||||
Operating
Officer
|
||||||||||||||
Spencer
LeRoy III
|
2007
|
408,496
|
250,304
|
336,960
|
57,445
|
11,843
|
1,065,048
|
|||||||
Senior
Vice President,
|
2006
|
400,163
|
344,944
|
349,440
|
130,616
|
12,122
|
1,237,285
|
|||||||
Secretary
& General
|
||||||||||||||
Counsel
|
||||||||||||||
Christopher
S. Nard
|
2007
|
351,833
|
31,702
|
252,323
|
-
|
33,521
|
(6)
|
669,379
|
||||||
Senior
Vice President -
|
2006
|
343,500
|
784,135
|
262,815
|
-
|
36,138
|
(6)
|
1,426,588
|
||||||
Mortgage
Guaranty
|
||||||||||||||
R.
Scott Rager
|
2007
|
374,500
|
486,440
|
257,400
|
-
|
487,109
|
(7)
|
1,605,449
|
||||||
Senior
Vice President -
|
2006
|
294,583
|
430,770
|
256,620
|
-
|
5,982
|
987,955
|
|||||||
General
Insurance
|
||||||||||||||
Rande
K. Yeager
|
2007
|
299,383
|
-
|
23,400
|
26,509
|
9,550
|
358,842
|
|||||||
Senior
Vice President-
|
2006
|
284,450
|
500,000
|
81,900
|
74,460
|
10,260
|
951,070
|
|||||||
Title
Insurance
|
(1)
|
Effective
January 1, 2007, no employee of the Company or any of its subsidiaries
have received any director fees for attending Board meetings of the
Company or any of its subsidiaries. In the above table, each
officer’s salary includes the following amount of director fees for 2006:
Aldo C. Zucaro $51,146; Karl W. Mueller $0; James A. Kellogg $7,400;
Spencer LeRoy, III $8,496; Christopher S. Nard $13,500; R. Scott Rager $0;
Rande K. Yeager $5,700.
|
(2)
|
Includes
the combined cash and deferred incentive compensation awards granted under
the Company’s Incentive Compensation Plans or any similar plans maintained
by subsidiaries of the Company. In this table, both the cash and deferred
portions are attributed to the year on which the award was based, even
though the award was granted in the following calendar year. Prior to
2007, these awards were split 50% each into cash and deferred amounts,
except as to Mr. Yeager whose awards were and continue to be 100% cash.
For 2007, the first $25,000 was paid in cash and the balance was split 50%
each into cash and deferred amounts. The deferred amounts included in this
column are usually not payable before the person retires at 55 years of
age or later. Beginning in 2007, the deferred portions accrue interest for
awards made in 2005 and subsequent. For awards made prior to 2004 a
multiplier may apply. (See the Performance Recognition Plans section shown
elsewhere in this proxy statement.) The deferred amounts
included in this column are shown without a present value
discount.
|
(3)
|
The
value of options is calculated pursuant to the Black-Scholes model which
is also utilized in expensing stock option awards in the Company’s
financial statements. The option values represent the estimated present
value as of the date options were granted. Accordingly, the option awards
included under this column were granted as shown in 2006 and 2007, and
reflect, among other factors previously noted, an evaluation of earning
trends and returns on equity for 2005 and 2006,
respectively.
|
|
The
significant facts and assumptions incorporated in the Black-Scholes model
in estimating the value of the options include the
following:
|
|
a)
|
Options
are issued with an exercise price equal to the fair market value of stock
at the close of trading on the business day immediately preceding the date
of grant.
|
|
b)
|
The
term of each option is 10 years (unless such terms are otherwise shortened
or forfeited due to termination of employment) but it is assumed that
these executives would hold these options for 8 years.
|
c) | Interest rates of 4.494% and 5.095% were used for the 2007 and 2006 awards, respectively. Such rate was the interest rate on U.S. Treasury securities on the date of grant with a maturity date corresponding to that of the expected option life. | |
d) | Expected volatilities of 23.9% and 26.6% were used for the 2007 and 2006 awards, respectively. This percentage was calculated using daily stock prices for the period prior to the grant date corresponding with the expected option life. | |
e) | Expected annual dividend yields of 3.675% and 3.538% were used for the 2007 and 2006 awards, respectively. |
|
The
ultimate value of the options will depend on the future market price of
the Company’s Common Stock which cannot be forecasted with reasonable
accuracy. The actual value, if any, that an optionee may realize upon
exercise of an option will depend on the excess of the market value over
the strike price on the date the option is exercised. Pursuant to
applicable accounting rules, the amounts shown equals that portion of the
current years’ and prior years’ grants that vested and were recognized in
the Company’s consolidated financial statements during the listed year. As
Messrs. Zucaro, LeRoy, Rager and Yeager would be considered fully vested
based on their ages and years of service in the event of their retirement,
the full value of the options granted to them is listed. For Messrs.
Kellogg, Mueller and Nard the value shown represents the listed year
compensation cost attributable to the current year’s award that is vested
plus the amount vested in the listed year for awards made in prior years.
The full value of the awards subject to vesting, made in 2006 and 2007,
respectively, for Messrs. Kellogg, Mueller and Nard were $327,600 and
$397,800, $191,100 and $177,840 and $409,500 and $280,800. The following
section captioned “Stock Options” provides additional information
concerning the vesting of stock
options.
|
(4)
|
Represents
the aggregate change in the actuarial present value of the accumulated
benefits under all defined benefit and actuarial pension plans (including
supplemental plans) for 2007. The Company does not have any non-qualified
deferred compensation plans that credit above market or preferential
earnings to participants.
|
(5)
|
Includes
the Company’s matching contribution to the officers’ ESSOP account of
$1,800 and $4,950 for the years 2007 and 2006, respectively,; the value of
the Company’s group term life insurance plan treated as income; the value
of the personal use of a supplied vehicle; and the personal value of meals
and club dues incurred for Company business as shown below for the years
2007 and 2006:
|
Value
of Term Life
|
Value
of Vehicles
|
Value
of Meals & Club Dues
|
|||||||||||
2007
|
2006
|
2007
|
2006
|
2007
|
2006
|
||||||||
Aldo
C. Zucaro
|
$9,753
|
$9,754
|
-
|
-
|
$6,166
|
$5,533
|
|||||||
Karl
W. Mueller
|
810
|
810
|
-
|
-
|
4,917
|
4,181
|
|||||||
James
A. Kellogg
|
2,322
|
1,782
|
$7,801
|
$7,709
|
1,479
|
3,296
|
|||||||
Spencer
LeRoy, III
|
3,564
|
3,564
|
-
|
-
|
6,479
|
3,608
|
|||||||
Christopher
S. Nard
|
204
|
204
|
-
|
-
|
5,220
|
4,687
|
|||||||
R.
Scott Rager
|
947
|
1,032
|
-
|
-
|
-
|
-
|
|||||||
Rande
K. Yeager
|
1,290
|
1,290
|
6,460
|
4,020
|
-
|
-
|
(6)
|
Includes
$22,000 as the vested amount accrued under the RMIC Profit Sharing Plan
for 2006 and 2007, respectively, and the amount attributed to a health
program available to RMIC employees of $4,297 for 2006 and for 2007,
respectively.
|
(7)
|
Includes
a $400,000 relocation bonus and $84,362 in relocation expenses paid to Mr.
Rager in connection with his move to the Company’s Chicago executive
offices in 2007.
|
Grants
of Plan-Based Awards/2007
|
||||||||
All
Other Option Awards:
|
Exercise
or
|
Grant
Date
|
||||||
Grant
|
Number
of Securities
|
Base
Price
|
Fair
Value of
|
|||||
Name
|
Date
|
Underlying
Options
|
of
Option Awards
|
Option
Award
|
||||
Aldo
C. Zucaro
|
3/16/07
|
200,000
|
$21.77
|
$
936,000
|
||||
Karl
W. Mueller
|
3/16/07
|
38,000
|
21.77
|
177,840
|
||||
James
A. Kellogg
|
3/16/07
|
85,000
|
21.77
|
397,800
|
||||
Spencer
LeRoy, III
|
3/16/07
|
72,000
|
21.77
|
336,960
|
||||
Christopher
S. Nard
|
3/16/07
|
60,000
|
21.77
|
280,800
|
||||
R.
Scott Rager
|
3/16/07
|
55,000
|
21.77
|
257,400
|
||||
Rande
K. Yeager
|
3/16/07
|
5,000
|
21.77
|
23,400
|
Grants
of Plan-Based Awards/2008
|
||||||||
All
Other Option Awards:
|
Exercise
or
|
Grant
Date
|
||||||
Grant
|
Number
of Securities
|
Base
Price
|
Fair
Value of
|
|||||
Name
|
Date
|
Underlying
Options
|
of
Option Awards
|
Option
Award
|
||||
Aldo
C. Zucaro
|
-
|
-
|
-
|
-
|
||||
Karl
W. Mueller
|
3/19/08
|
25,000
|
$12.95
|
$
38,000
|
||||
James
A. Kellogg
|
-
|
-
|
-
|
-
|
||||
Spencer
LeRoy, III
|
3/19/08
|
52,500
|
12.95
|
79,800
|
||||
Christopher
S. Nard
|
3/19/08
|
100,000
|
12.95
|
152,000
|
||||
R.
Scott Rager
|
3/19/08
|
37,500
|
12.95
|
57,000
|
||||
Rande
K. Yeager
|
3/19/08
|
30,000
|
12.95
|
45,600
|
Option
Awards
|
||
Name
(a)
|
Number
of Shares
Acquired
on Exercise
(b)
|
Value
Realized
on
Exercise
(c)
|
Aldo
C. Zucaro
|
210,938
|
$569,533
|
Karl
W. Mueller
|
-
|
-
|
James
A. Kellogg
|
-
|
-
|
Spencer
LeRoy, III
|
-
|
-
|
Christopher
S. Nard
|
-
|
-
|
R.
Scott Rager
|
-
|
-
|
Rande
K. Yeager
|
8,438
|
57,885
|
Number
of
|
Number
of securities
|
|||||
securities
to be
|
remaining
available for
|
|||||
issued
upon exercise
|
Weighted-average
|
future
issuance under
|
||||
of
outstanding
|
exercise
price of
|
equity
compensation plans
|
||||
options,
warrants
|
outstanding
options,
|
(excluding
securities
|
||||
Plan
Category
|
and
rights
|
warrants
and rights
|
reflected
in column (a))
|
|||
(a)
|
(b)
|
(c)
|
||||
Equity
compensation plans approved
|
||||||
by
security
holders
|
14,570,577
|
$18.12
|
6,171,924
|
|||
Equity
compensation plans not
|
||||||
approved
by security holders
|
-
|
-
|
-
|
|||
Total
|
14,570,577
|
$18.12
|
6,171,924
|
Number
of
|
Number
of securities
|
|||||
securities
to be
|
remaining
available for
|
|||||
issued
upon exercise
|
Weighted-average
|
future
issuance under
|
||||
of
outstanding
|
exercise
price of
|
equity
compensation plans
|
||||
options,
warrants
|
outstanding
options,
|
(excluding
securities
|
||||
Plan
Category
|
and
rights
|
warrants
and rights
|
reflected
in column (a))
|
|||
(a)
|
(b)
|
(c)
|
||||
Equity
compensation plans approved
|
||||||
by
security
holders
|
15,533,563
|
$17.71
|
5,210,549
|
|||
Equity
compensation plans not
|
||||||
approved
by security holders
|
-
|
-
|
-
|
|||
Total
|
15,533,563
|
$17.71
|
5,210,549
|
Number
of Securities
|
||||||||
Underlying
|
Underlying
|
|||||||
Unexercised
|
Unexercised
|
Option
|
Option
|
|||||
Options
|
Options
|
Exercise
|
Expiration
|
|||||
Name
|
Exercisable
|
Unexercisable
|
Price
|
Date
|
||||
Aldo
C. Zucaro
|
300,000
|
-
|
$14.36
|
03/21/11
|
||||
318,750
|
-
|
16.86
|
03/20/12
|
|||||
346,875
|
-
|
14.37
|
03/19/13
|
|||||
242,813
|
104,062
|
19.32
|
03/09/14
|
|||||
50,625
|
61,875
|
18.41
|
04/11/15
|
|||||
70,000
|
210,000
|
21.48
|
05/26/16
|
|||||
20,000
|
180,000
|
21.77
|
03/13/17
|
|||||
Karl
W. Mueller
|
26,250
|
11,250
|
20.02
|
03/09/14
|
||||
5,625
|
6,875
|
18.41
|
04/11/15
|
|||||
8,750
|
26,250
|
21.48
|
05/26/16
|
|||||
3,800
|
34,200
|
21.77
|
03/13/17
|
|||||
James
A. Kellogg
|
3,375
|
-
|
15.49
|
03/11/08
|
||||
3,750
|
-
|
10.40
|
03/11/09
|
|||||
4,219
|
-
|
6.40
|
03/22/10
|
|||||
6,563
|
-
|
14.36
|
03/21/11
|
|||||
7,500
|
-
|
16.86
|
03/20/12
|
|||||
9,375
|
-
|
14.37
|
03/19/13
|
|||||
17,625
|
7,375
|
19.32
|
03/09/14
|
|||||
16,875
|
20,625
|
18.41
|
04/11/15
|
|||||
15,000
|
45,000
|
21.48
|
05/26/16
|
|||||
8,500
|
76,500
|
21.77
|
03/13/17
|
|||||
Spencer
LeRoy, III
|
35,156
|
-
|
15.49
|
03/11/08
|
||||
37,500
|
-
|
10.40
|
03/11/09
|
|||||
30,000
|
-
|
6.40
|
03/22/10
|
|||||
46,875
|
-
|
14.36
|
03/21/11
|
|||||
46,875
|
-
|
16.86
|
03/20/12
|
|||||
51,563
|
-
|
14.37
|
03/19/13
|
|||||
43,750
|
18,750
|
19.32
|
03/09/14
|
|||||
28,125
|
34,375
|
18.41
|
04/11/15
|
|||||
16,000
|
48,000
|
21.48
|
05/26/16
|
|||||
7,200
|
64,800
|
21.77
|
03/13/17
|
|||||
Christopher
S. Nard
|
25,313
|
-
|
15.49
|
03/11/08
|
||||
30,000
|
-
|
10.40
|
03/11/09
|
|||||
28,125
|
-
|
6.40
|
03/22/10
|
|||||
65,625
|
-
|
14.36
|
03/21/11
|
|||||
56,250
|
-
|
16.86
|
03/20/12
|
|||||
75,000
|
-
|
14.37
|
03/19/13
|
|||||
52,500
|
22,500
|
19.32
|
03/09/14
|
|||||
23,906
|
29,219
|
18.41
|
04/11/15
|
|||||
18,750
|
56,250
|
21.48
|
05/26/16
|
|||||
6,000
|
54,000
|
21.77
|
03/13/17
|
|||||
R.
Scott Rager
|
3,375
|
-
|
10.40
|
03/11/09
|
||||
15,000
|
-
|
16.86
|
03/20/12
|
|||||
19,250
|
8,250
|
19.32
|
03/09/14
|
|||||
12,938
|
15,813
|
18.41
|
04/11/15
|
|||||
11,750
|
35,250
|
21.48
|
05/26/16
|
|||||
5,500
|
49,500
|
21.77
|
03/13/17
|
|||||
Rande
K. Yeager
|
14,063
|
-
|
16.86
|
03/19/13
|
||||
13,125
|
5,625
|
19.32
|
03/09/14
|
|||||
6,188
|
7,563
|
18.41
|
04/11/15
|
|||||
3,750
|
11,250
|
21.48
|
05/26/16
|
|||||
500
|
4,500
|
21.77
|
03/13/17
|
|||||
($
in Millions)
|
|||||||
2007
|
2006
|
2005
|
|||||
Net Operating Income
(Loss):
|
|||||||
General
|
$291.5
|
$278.4
|
$287.1
|
||||
Mortgage Guaranty
|
(66.4))
|
153.1
|
162.6
|
||||
Title
|
(8.3))
|
21.1
|
58.6
|
||||
Corporate and Other
(*)
|
9.9
|
(0.2))
|
(0.8))
|
||||
Total
|
226.7
|
452.4
|
509.1
|
||||
Net realized
gains
|
45.7
|
12.4
|
42.3
|
||||
Net
income
|
$274.4
|
$464.8
|
$551.4
|
||||
(*)
Including consolidation adjustments
|
Name
|
Registrant
Contributions
|
Aggregate
Earnings
for
2007
|
Aggregate
Balance
for
2007
|
|||
Aldo
C. Zucaro
|
-
|
$38,090
|
$6,571,683
|
|||
Karl
W. Mueller
|
$
77,500
|
10,927
|
451,439
|
|||
James
A. Kellogg
|
-
|
18,632
|
1,450,589
|
|||
Spencer
LeRoy, III
|
105,000
|
15,304
|
1,699,152
|
|||
Christopher
S. Nard
|
-
|
31,702
|
2,170,311
|
|||
R.
Scott Rager
|
225,000
|
11,567
|
1,539,894
|
|||
Rande
K. Yeager
|
-
|
-
|
-
|
Name
|
Plan
Name
|
Number
of Years Credited Service
|
Present
Value of Accumulated Benefit (1)
|
Payments
During Last Fiscal Year
|
Aldo
C. Zucaro
|
ORI
Employees Retirement Plan
ORI
Excess Benefit Plan
|
30.4
30.4
|
$1,107,227
2,427,698
|
-
-
|
Karl
W. Mueller
|
ORI
Employees Retirement Plan
|
2.3
|
29,525
|
-
|
James
A. Kellogg
|
ORI
Employees Retirement Plan
|
29.8
|
629,529
|
-
|
Spencer
LeRoy, III
|
ORI
Employees Retirement Plan
ORI
Excess Benefit Plan
|
14.5
14.5
|
424,975
325,478
|
-
-
|
Christopher
S. Nard
|
None
|
-
|
-
|
-
|
R.
Scott Rager
|
None
|
-
|
-
|
-
|
Rande
K. Yeager
|
ORNT
Group Pension Plan
|
20.3
|
508,190
|
-
|
(1)
|
The
present value of accumulated benefits payable following assumed retirement
is calculated using interest and mortality assumptions consistent with
those used for financial reporting purposes with respect to the companies’
audited financial statements. No discount is assumed for separation prior
to retirement due to death, disability or termination of employment. The
amount shown is based upon accrued service through
2007.
|