As in effect
3/1/61
FORM 10K/A
------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
AMENDMENT TO APPLICATION OR REPORT
Filed Pursuant to Section 12, 13, or 15 (d) of
THE SECURITIES EXCHANGE ACT OF 1934
OLD REPUBLIC INTERNATIONAL CORPORATION
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
AMENDMENT NO. 2
---
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its ANNUAL REPORT FOR 1996 on Form
10-K as set forth in the pages attached hereto:
(List all such items, financial statements, exhibits or other portions amended).
FORM 11-K
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
OLD REPUBLIC INTERNATIONAL CORPORATION
--------------------------------------
(Registrant)
Date:April 22, 1997 By /s/ A. C. Zucaro
------------------------------------
(Signature)
A. C. Zucaro
President
and
Chief Executive Officer
Total Pages: 36
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
------------
FORM 11-K
------------
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For The Fiscal Year Ended December 31, 1996
------------
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
OLD REPUBLIC INTERNATIONAL CORPORATION
307 NORTH MICHIGAN AVENUE
CHICAGO, ILLINOIS 60601
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administration Committee has duly caused this Annual Report to be signed on
behalf of the undersigned, thereunto duly authorized.
THE OLD REPUBLIC INTERNATIONAL CORPORATION EMPLOYEES
SAVINGS AND STOCK OWNERSHIP PLAN
(Registrant)
By: /s/ A. C. Zucaro
-----------------------------------------
A. C. Zucaro, Member of the
Administration Committee
Date: April 22, 1997
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
REPORT ON AUDITS OF FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
----------
Pages
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Plan Benefits as of
December 31, 1996 and 1995 2
Statements of Changes in Net Assets Available for Plan
Benefits for the years ended December 31, 1996 and 1995 3
Notes to Financial Statements 4-24
Supplemental Schedules (Required by the Department of Labor):
Item 31 - Assets and Liabilities at December 31, 1996 and 1995 26
Item 32 - Income, Expenses, and Changes in Net Assets for the
year ended December 31, 1996 27
Item 27a - Schedule I - Schedule of Assets Held for Investment
Purposes at December 31, 1996 28-29
Item 27a - Schedule II - Schedule of Assets Held for Investment
Purposes- Investment Assets Both Acquired and Sold in 1996 30
Item 27d -Schedule of Reportable Transactions for the year
ended December 31, 1996 31
Supplemental Schedules (Required by the Securities Exchange Commission):
Schedules I, II and III have been omitted because the required information is
shown in the financial statements or notes thereto.
Note
- ----
Supplemental schedules required by the Employee Retirement Income Security Act
of 1974 that have not been included herein are not applicable.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Administration Committee
of the Old Republic International Corporation
Employees Savings and Stock Ownership Plan
Chicago, Illinois
We have audited the accompanying statements of net assets available for plan
benefits of Old Republic International Corporation Employees Savings and Stock
Ownership Plan (the Plan) as of December 31, 1996 and 1995, and the related
statements of changes in net assets available for plan benefits for the years
then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based upon our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 1996 and 1995, and the changes in net assets available for plan
benefits for the years ended December 31, 1996 and 1995, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
accompanying index are presented for the purpose of additional analysis and are
not a required part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974 and by the Securities and Exchange Commission's Regulation S-X. The
supplemental schedules have been subjected to the auditing procedures applied in
the audit of the basic financial statements, and, in our opinion, are fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ Coopers & Lybrand L.L.P.
Chicago, Illinois
April 22, 1997
1
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31, 1996 and 1995
----------------
1996
--------------------------------------------------------------
Employees' Companies' Combined
Account Account Account
------------------- ------------------- -------------------
ASSETS
Investments, at fair value:
Collective Trusts:
Short-term Investment Fund $11,385,002 $305,182 $11,690,184
Old Republic International Corporation:
Series "D" preferred shares 0 174,280,974 174,280,974
Common shares 5,262,180 924,881 6,187,061
Debentures 0 0 0
United States Government obligations 10,549,652 0 10,549,652
Corporate bonds 15,332,393 0 15,332,393
Other common stock 0 0 0
Mutual funds 11,065,160 1,230,187 12,295,347
------------------- ------------------- -------------------
53,594,387 176,741,224 230,335,611
Contributions receivable:
Companies 0 3,739,210 3,739,210
Employees 0 0 0
Accrued interest and dividends receivable 501,482 1,021 502,503
------------------- ------------------- -------------------
$54,095,869 $180,481,455 $234,577,324
=================== =================== ===================
LIABILITIES AND NET ASSETS AVAILABLE
FOR PLAN BENEFITS
Notes payable to banks $0 $11,109,234 $11,109,234
Advances from plan sponsor (non-interest bearing) 0 738,895 738,895
Accrued interest payable 0 119,921 119,921
Unpaid withdrawal and termination benefits 877,248 0 877,248
Unpaid administrative expenses 33,198 (53,750) (20,552)
------------------- ------------------- -------------------
Total liabilities 910,446 11,914,300 12,824,746
------------------- ------------------- -------------------
Net assets available for plan benefits:
Allocated to participants 53,185,423 148,405,823 201,591,246
Not allocated to participants 0 20,161,332 20,161,332
------------------- ------------------- -------------------
Total net assets available for plan benefits 53,185,423 168,567,155 221,752,578
------------------- ------------------- -------------------
$54,095,869 $180,481,455 $234,577,324
=================== =================== ===================
1995
--------------------------------------------------------------
Employees' Companies' Combined
Account Account Account
------------------- ------------------- -------------------
ASSETS
Investments, at fair value:
Collective Trusts:
Short-term Investment Fund $6,395,015 $647,798 $7,042,813
Old Republic International Corporation:
Series "D" preferred shares 0 158,022,428 158,022,428
Common shares 4,634,880 11,242,424 15,877,304
Debentures 20,250 0 20,250
United States Government obligations 10,430,913 0 10,430,913
Corporate bonds 18,946,969 0 18,946,969
Other common stock 210,750 0 210,750
Mutual funds 5,916,421 825,455 6,741,876
------------------- ------------------- -------------------
46,555,198 170,738,105 217,293,303
Contributions receivable:
Companies 0 1,296,847 1,296,847
Employees 151,280 0 151,280
Accrued interest and dividends receivable 586,455 5,035 591,490
------------------- ------------------- -------------------
$47,292,933 $172,039,987 $219,332,920
=================== =================== ===================
LIABILITIES AND NET ASSETS AVAILABLE
FOR PLAN BENEFITS
Notes payable to banks $0 $13,934,234 $13,934,234
Advances from plan sponsor (non-interest bearing) 0 0 0
Accrued interest payable 0 159,540 159,540
Unpaid withdrawal and termination benefits 466,413 0 466,413
Unpaid administrative expenses 30,865 (6,633) 24,232
------------------- ------------------- -------------------
Total liabilities 497,278 14,087,141 14,584,419
------------------- ------------------- -------------------
Net assets available for plan benefits:
Allocated to participants 46,795,655 136,217,086 183,012,741
Not allocated to participants 0 21,735,760 21,735,760
------------------- ------------------- -------------------
Total net assets available for plan benefits 46,795,655 157,952,846 204,748,501
------------------- ------------------- -------------------
$47,292,933 $172,039,987 $219,332,920
=================== =================== ===================
See accompanying notes to financial statements.
2
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
Statements of Changes in Net Assets Available for Plan Benefits
for the years ended December 31, 1996 and 1995
----------------
1996
-------------------------------------------------------------
Employees' Companies' Combined
Account Account Account
------------------ ------------------- -------------------
Additions:
Employer contributions $0 $3,755,042 $3,755,042
Employee contributions 8,890,832 0 8,890,832
Interest income 2,196,148 59,134 2,255,282
Dividend income 278,614 2,954,326 3,232,940
Net appreciation in fair value
of investments 1,681,389 19,349,816 21,031,205
------------------ ------------------- -------------------
13,046,983 26,118,318 39,165,301
------------------ ------------------- -------------------
Deductions:
Termination and withdrawal benefits 6,624,016 14,572,770 21,196,786
Interest expense 0 777,063 777,063
Administrative expenses 33,199 154,176 187,375
------------------ ------------------- -------------------
6,657,215 15,504,009 22,161,224
------------------ ------------------- -------------------
NET ADDITIONS 6,389,768 10,614,309 17,004,077
Net assets available for plan benefits,
beginning of year 46,795,655 157,952,846 204,748,501
------------------ ------------------- -------------------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, END OF YEAR $53,185,423 $168,567,155 $221,752,578
================== =================== ===================
1995
--------------------------------------------------------------
Employees' Companies' Combined
Account Account Account
------------------- ------------------- -------------------
Additions:
Employer contributions $0 $1,304,571 $1,304,571
Employee contributions 7,723,910 0 7,723,910
Interest income 1,994,859 178,426 2,173,285
Dividend income 261,786 3,052,706 3,314,492
Net appreciation in fair value
of investments 5,160,425 68,189,549 73,349,974
------------------ ------------------- -------------------
15,140,980 72,725,252 87,866,232
------------------ ------------------- -------------------
Deductions:
Termination and withdrawal benefits 5,084,591 5,341,444 10,426,035
Interest expense 0 978,107 978,107
Administrative expenses 30,865 211,863 242,728
------------------ ------------------- -------------------
5,115,456 6,531,414 11,646,870
------------------ ------------------- -------------------
NET ADDITIONS 10,025,524 66,193,838 76,219,362
Net assets available for plan benefits,
beginning of year 36,770,131 91,759,008 128,529,139
------------------ ------------------- -------------------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, END OF YEAR $46,795,655 $157,952,846 $204,748,501
================== =================== ===================
See accompanying notes to financial statements.
3
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
----------
1. Summary of Significant Accounting Policies
A. Basis of Presentation
The accompanying financial statements of the Old Republic
International Corporation Employees Savings and Stock Ownership Plan
(the Plan) include plan assets for employees of Old Republic
International Corporation (the Corporation or Plan Sponsor), and
participating subsidiaries (the Companies or Employers). These
financial statements and accompanying notes together provide only
general information about the Plan. Participants should refer to the
Plan agreement for a complete description of the Plan's provision.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
additions and deductions during the reporting period. Actual results
could differ from those estimates.
B. Investments
Investments in the Collective Trust-Short-term Investment Fund of
the Northern Trust Company (Northern), are valued by the Northern at
cost which approximates fair value, and consist of short term
obligations. Securities traded over-the-counter, such as common
stocks, mutual funds, corporate bonds and U.S. Government
obligations, are valued at the final bid price on the valuation
date. Temporary investments in short-term securities are carried at
cost, which approximates market value. Investment in Old Republic
International Corporation Series D preferred stock, which is not
registered, is stated at fair value as determined by the Board of
Directors, based on appraisals received from an investment banker.
However, because of the inherent uncertainty of the valuation, the
Board of Directors' estimate of fair value may differ significantly
from the value that would have been used had a ready market existed
for the securities, and the differences could be material. Such
preferred shares amount to $174,280,974 and $158,022,428 at December
31, 1996 and 1995 (74.3% and 72.0% respectively of total plan
assets). Old Republic International Corporation common stock is
stated at closing market value on the last business day of the year.
The Plan presents in the statements of changes in net assets the net
appreciation (depreciation) in the fair value of its investments
which consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments. For purposes of
generally accepted accounting principles, the Plan uses the
historical cost method for determining the basis of its investments,
whereas, for ERISA reporting purposes, the Plan uses the current
value method for determining the basis of its investments. Purchases
and sales of securities are reflected on a trade-date basis. Gain or
loss on sales of securities are based on the average cost method.
Interest income is recorded as earned and dividend income is
recorded as earned on the ex-dividend date. The investments in
common stock and Series D preferred stock of Old Republic
International Corporation have been adjusted, as to number of
shares, to reflect a 50% stock dividend declared on March 14, 1996.
4
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
----------
1. Summary of Significant Accounting Policies, Continued
C. Contributions
Employees become participants in the Plan on the first January 1,
they are employees and they elect to make contributions to the Plan.
Contributions from employees (savings) are made on a post-tax basis
and are recorded in the period in which the Companies make payroll
deductions from Plan participants. Participants elect the amount of
contribution which ranges from a minimum of 1% to a maximum of 15%
of recognized compensation as defined in the Plan. Any employee who
does not contribute to the Plan will not receive a Company matching
contribution. Employee contributions up to 6% will be matched.
However, the maximum amount of contribution which can be matched per
employee cannot exceed $9,000 (6% of $150,000) per Plan year. The
maximum amount which can be withheld is 15% limited to $22,500 (15%
of $150,000). Contributions are also subject to other Internal
Revenue Code limitations (including the limits imposed by Internal
Revenue Code Section 415).
There is no penalty to participants for withdrawing a part of
accumulated employee savings and earnings thereon if the cumulative
withdrawal, in any one year, is the lower of $15,000 or 50% of the
accumulated savings balance as of the most recent calculation date
(June 30 or December 31). Such withdrawals are permitted only on
January 1 or July 1 of each year. The penalty for withdrawing excess
amounts, in any one year, is exclusion from participation in the
Plan for one year starting on the January 1, following the date of
the excess withdrawal.
The company matching contribution is based on the following formula:
Percentage of If the percentage increase in average operating
Recognized Compen- earnings per share for the most recent five year
sation Contributed period is:
------------------ ---------------------------------------------------------
Less Than 6.01% to 9.01% to 15.01% Over
6% 9% 15% 20% 20%
------------- -------- -------- ------ ----
The Resulting Employer Matching
Contribution on the First 6% of Employee
Savings will be:
---------------------------------------------------------
1.00% 30% 40% 65% 100% 140%
1.01 to 2.00% 28% 38% 63% 98% 138%
2.01 to 3.00% 26% 36% 61% 96% 136%
3.01 to 4.00% 24% 34% 59% 94% 134%
4.01 to 5.00% 22% 32% 57% 92% 132%
5.01 to 6.00% 20% 30% 55% 90% 130%
6.01 to 15.00% None None None None None
-------------------------------------------------------
. The percentage increase in average operating earnings per share
is obtained by comparing the average operating earnings per share
for the Company for the five years ending with the calculation
year, with the same average for the five years ending the year
prior to the calculation year. Operating earnings per share are
determined pursuant to generally accepted accounting principles
and are equal to net income per share exclusive of realized
capital gains or losses and extraordinary items and income taxes
applicable thereto.
5
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
----------
1. Summary of Significant Accounting Policies, Continued
C. Contributions, Continued
Company matching contributions are allocated on December 31, and a
Plan participant receives a matching contribution only if:
. the Companies meet certain minimum profit objectives;
. the participant completes 1,000 or more hours of service
during the year; and
. the participant is employed by one of the Companies on
December 31 of that year, died or became fully disabled during
the year, or retired during the year after age 65.
Additional amounts from consolidated annual net profits after taxes
or accumulated earnings as the Board of Directors of the Companies
may determine from time to time may be added to the contributions
resulting from the above formula. The amount of the Companies'
contributions are subject to the following limitations:
No contribution shall be made if the Companies' consolidated annual net
profit before extraordinary items and taxes is less than $2,500,000.
No contribution shall be made by any Employer for any fiscal year which
exceeds the maximum amount currently deductible by that Employer under
section 404 of the Internal Revenue Code.
No contribution shall be made by any Employer for any fiscal year which
would cause its total contribution to exceed the amount of its annual
net profit before taxes and its accumulated earnings.
D. Administrative and Operating Expenses
Office personnel, space and equipment are furnished by the Companies
at no charge to the Plan. All other administrative expenses of the
Plan are paid by and reflected as expenses of the Plan.
2. Benefits
The benefits a plan participant receives depends upon amounts allocated
to his accounts under the Plan. Amounts in his accounts are affected by
the amount of employee contributions he makes, his vested interest in
his matching contributions and discretionary contributions, forfeitures,
and earnings.
When a plan participant makes employee contributions, his employee
contributions are allocated to his "Employee Account." Earnings are
allocated to each plan participant's Employee Account on a semi-annual
basis, based upon the performance of the investment fund that the plan
participant has selected. Upon termination of service for any reason, a
plan participant receives all amounts in his Employee Account.
6
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
----------
2. Benefits, Continued
Each year, the matching contributions and discretionary contributions
are allocated to the "Company Accounts" of plan participants. If a plan
participant terminates service with the Companies, the amount that he
receives from his Company Account depends upon his vested interest in
such account. A plan participant vests in his Company Account based on
his "Years of Service," according to the following table:
Years of Service Vesting Schedule
1 0%
2 0
3 20
4 40
5 60
6 80
7 100
A plan participant earns a Year of Service for each calendar year during
which he completes 1,000 or more hours of service for the Companies.
However, a plan participant will become 100% vested in his Company
Account prior to seven years of service if:
. the plan participant has reached age 65, or
. termination is caused by death, or
. termination is caused by total and permanent disability which
renders the employee incapable of performing satisfactory
service for the Companies.
The amount a plan participant receives from his Company Account is also
affected by forfeitures, earnings, and released shares. If a plan
participant terminates service prior to full vesting, the non-vested
portion of his Company Account is forfeited. Forfeited amounts are
re-allocated to remaining participants who made employee contributions,
completed 1,000 or more hours of service for the companies during the
year, and are employed by the Companies on December 31 or terminated
service due to retirement on or after age 65, death, or total and
permanent disability. Forfeitures are allocated based upon the ratio of
the plan participant's recognized compensation to the recognized
compensation of all plan participants. In addition to forfeitures, the
balance in a plan participant's Company Account is affected by the net
cash revenues over expenses of the Corporation's stock fund plus the
market value of shares released to participants from payment of loan
principal and/or interest during the year.
7
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
----------
2. Benefits, Continued
Unallocated net assets, in the Companies' Account, available for plan
benefits at December 31, are comprised of items not allocated to
participants, as follows:
Assets 1996 1995
------ ---- ----
Unreleased shares:
Series D preferred shares:
5,731,675 shares at $5.35 $ 30,664,461
7,394,201 shares at $4.73 $ 34,999,216
Common Shares:
26,801 shares at $26.75 716,927
34,575 shares at $23.67 818,275
Accrued interest receivable - 4,853
------------ ------------
Total 31,381,388 35,822,344
------------ ------------
Liabilities
Unpaid loan principal at December 31 11,109,234 13,934,234
Accrued interest expense payable on
loans at December 31 119,921 159,540
Accrued administrative expenses (prepaid) (9,099) (7,190)
------------ -------------
Total 11,220,056 14,086,584
------------ -------------
Unallocated net assets available
for plan benefits $ 20,161,332 $ 21,735,760
============ =============
8
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
----------
3. Investments
Investments held by the Plan at December 31, 1996 and 1995 are summarized as
follows:
1996 1995
---------------------------------- ---------------------------------
Shares/ Shares/
Units/ Units/
Par Value Cost Fair Value Par Value Cost Fair Value
---------- ---------- ------------ ---------- ----------- ------------
Collective Trusts:
Short-term Investment
Fund 11,690,184 $11,690,184 $ 11,690,184 7,042,813 $ 7,042,813 $ 7,042,813
Old Republic Inter-
national Corporation:
Series D-Preferred
Stock 32,575,883 38,579,244 174,280,974 33,385,023 39,537,500 158,022,428
Common Stock 231,292 1,642,198 6,187,061 670,872 3,755,629 15,877,304
Debentures - - - $15,000 15,360 20,250
United States Government
obligations $10,475,000 10,644,997 10,549,652 $10,075,000 10,338,133 10,430,913
Corporate bonds $15,217,000 15,537,593 15,332,393 $18,467,000 18,955,323 18,946,969
Other common stock - - - 10,500 229,225 210,750
Mutual funds 512,862 10,524,927 12,295,347 315,161 5,909,589 6,741,876
----------- ------------ ----------- ------------
$88,619,143 $230,335,611 $85,783,572 $217,293,303
=========== ============ =========== ============
Net appreciation (depreciation) in fair value of investments is broken down as
follows for the years ended December 31:
1996 1995
---- ----
Collective Trusts:
Short-term Investment
Fund $ - $ -
Old Republic Inter-
national Corporation:
Series D-Preferred
Stock 17,216,801 63,431,538
Common Stock 2,614,723 6,486,459
Debentures (4,890) 5,850
United States Government
obligations (212,561) 341,240
Corporate bonds 222,479 875,378
Other common stock (364,576) 1,091,292
Mutual funds 1,559,229 1,118,217
----------- -----------
$21,031,205 $73,349,974
=========== ===========
9
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
----------
4. ERISA Compliance
The Plan became effective January 1, 1978, and accordingly, in the
opinion of the Plan's Sponsor and its Legal Counsel, was drafted, as
were subsequent amendments and restatements, to comply with the
provisions of the Employee Retirement Income Security Act of 1974
("ERISA" or "the ACT"), as amended from time to time.
5. Termination Priorities
The Corporation reserves the right, either with or without formal
action, to terminate the Plan. Each Employer reserves the right to
permanently discontinue its contributions to the Plan. In the event that
an Employer permanently discontinues its contributions to the Plan, or
the Corporation terminates the Plan, or the Plan is partially terminated
under operation of law, the accounts of the affected participants shall
be fully vested and non-forfeitable. In addition, because the Plan is a
defined contribution plan and not a defined benefit plan, no termination
priorities apply to the Plan under ERISA.
6. Notes Payable to Banks
The following table sets forth certain data with respect to debt assumed
by the Plan and guaranteed by the Corporation:
Original loan principal $51,500,000
Cost of shares acquired $49,899,963
Unpaid principal balance
at December 31, 1996 $11,109,234
Shares acquired:
Series B 9,881,937
Series D 33,385,023
Common 44,967
Unreleased shares at December 31, 1996:
Series D 5,731,675
Common 26,801
===========
Principal due April 30,
1997 $ 2,785,000
1998 3,224,234
1999 2,600,000
2000 2,500,000
-----------
$11,109,234
===========
10
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
----------
6. Notes Payable to Bank, Continued
Except for loan proceeds of $100,037, all proceeds were used by the Plan
to acquire preferred and common shares of the Corporation, as indicated
above, at appraised values. Remaining funds were utilized to meet
periodic cash needs or to refinance existing loans. The Series "D"
preferred stock has a cumulative annual dividend rate of $.087 per
share, has a minimum redemption value of $0.87 at the option of the
Corporation, has one vote per share and is convertible into common stock
of the Corporation at any time at the rate of five shares of Series"D"
preferred stock for one common share.
It is anticipated that principal and interest payments on the Plan's
loans are to be met by the Companies' annual profit sharing
contributions, interest on funds invested, and dividends on the
Corporation's preferred and common stock.
During 1988, a number of loans with an aggregate outstanding principal
balance of $23,374,234 were refinanced. $11,084,234 was refinanced with
the Corporation and $12,290,000 was refinanced with a bank.
In January 1995, the Plan refinanced a portion of its borrowings. The
net effect of the refinancing was to decrease the 1995 principal
repayment by $2,700,000 while increasing the 1997 and 1998 principal
repayments by $1,700,000 and $1,000,000, respectively.
The interest rate on loans with the Corporation is set at 1.5% in excess
of the current rate on six month certificates of deposit. The new Bank
loans carry an interest rate at 75% of the Prime Rate. The interest
rates on other Bank loans are set at 1.5% in excess of the current rate
on six month certificates of deposit or at 80% to 84% of the Prime Rate.
The Plan renegotiated its loans with the Banks in early 1995. As a
result of these renegotiations, the loan principal payments are payable
as stated earlier in this footnote. In addition, the payment date was
switched from February 1, to April 30, of the years payments are due.
The interest rates on the renegotiated bank loans range from 75% to 85%
of the Prime Rate.
The carrying amounts of the notes payable approximates their fair value.
In April 1996, the Plan received a non-interest bearing advance of
$1,738,895, from the Plan Sponsor. The Plan paid back $1,000,000 in June
1996, and the remaining $738,895 in January, 1997.
7. Tax Status
The Internal Revenue Service on April 25, 1995, issued a determination
letter stating that the Plan, as amended through December 1, 1994, was
qualified under Section 401 of the Internal Revenue Code and the Plan
was exempt under the provisions of Section 501(a). The Plan has not been
amended since the determination letter was received. The Plan's Sponsor
and Tax Counsel believe that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the Internal
Revenue Code.
11
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
----------
7. Tax Status, Continued
In-service withdrawals which were previously available on employees'
contributions only, are now partially taxable once they have exceeded an
employees' gross contributions through December 31, 1986. This
taxability arises because the Act now considers withdrawals to include
earnings as well as contributions.
Distributions made prior to a plan participant's death, disability, or
attainment of age 59 1/2 may be subject to a 10% penalty unless such
distributions are rolled over into another qualified retirement plan or
individual retirement account ("IRA"). All such distributions are
subject to penalty except for distributions that are part of a series of
substantially equal periodic payments made over the life of the plan
participant or the joint lives of the plan participant and his
beneficiary, distributions to a plan participant after separation from
service and attainment of age 55, and distributions to pay certain
medical expenses.
No federal income tax consequences result to a plan participant,
beneficiary, or estate by reason of participation in the plan until a
distribution is made. Unless the distribution qualifies for special tax
treatment for lump sum distributions described in the following
paragraphs, the amount received including the fair market value of any
common stock on the date of distribution will be taxed at ordinary
income tax rates in the same manner as an annuity. This means that a
portion of each distribution is excluded from tax. The excluded portion
is that part of the payment that bears the same ratio to the whole
payment as the plan participant's employee contributions bear to the
total value of his accounts.
The distribution will qualify as a "lump-sum distribution" if the plan
participant receives the entire balance of his accounts within one
taxable year, the plan participant has participated in the plan for five
or more taxable years before the taxable year of distribution, and the
distribution results from the plan participant's separation from service
with the Company or after the plan participant has attained age 59-1/2.
A distribution received by a beneficiary will also qualify as a
"lump-sum distribution" if the entire balance of the plan participant's
account is received within one taxable year by the beneficiary by reason
of the plan participant's death.
If a distribution qualifies as a "lump sum distribution" under the
Internal Revenue Code, and if no part of the distribution is rolled
over, a plan participant may elect to have the entire amount of the
distribution taxed as ordinary income or under the special 5-year
averaging rule. The special 5-year averaging rule generally may be used
only if the individual is age 59 1/2 at the time of the distribution and
may be used only once. A special phase-out rule allowed limited use of
capital gains treatment between 1987 and 1991.
12
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
----------
7. Tax Status, Continued
For distributions that exceed $150,000 in any one year, there may be an
additional 15% excise tax. If five year forward averaging is used, the
excise tax, if any, will be applied to distributions that exceed five
times $150,000. The distribution limitation applies to the total of
distributions from all qualified retirement plans and IRA's not only the
Plan.
If a participant or the spouse of a deceased participant receives a
distribution from the Plan that qualifies for "lump-sum distribution"
tax treatment, or receives a distribution that would qualify for such
treatment except for failure to meet the five years of participation
requirement, the individual may "roll over" the distribution in excess
of his employee contributions to an IRA in which case the individual
would not have to pay a tax at the time of the distribution on the
amount transferred to the IRA. At the time of receipt of a distribution
from the IRA, the individual will have to pay a tax at ordinary income
tax rates (subject to the maximum tax on personal service income) on the
amount distributed.
This summary of the federal tax laws presents only a brief general
statement of complex tax laws and regulations which are subject to
change at any time. Specific federal and state tax treatment relating to
a distribution should be carefully considered by a participant (or
beneficiary) or reviewed with a tax advisor prior to making any
elections and filing returns for a tax year in which the distribution is
made.
13
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
----------
8. Contributions
Contributions by the Participants and by Participating Companies were as
follows for the years shown:
1996 1995
---------------------- ----------------------
Partici- Partici-
pants Company pants Company
Old Republic International Corporation $ 45,133 $ 13,464 $ 43,100 $ 5,320
Old Republic Life Insurance Company 55,997 24,104 54,227 9,610
Old Republic Insurance Company 172,727 75,762 190,358 34,326
International Business & Mercantile
REassurance Company 39,646 8,419 15,776 3,069
Old Republic National Title Insurance
Company & its Subsidiaries and Affiliates 1,314,204 493,518 1,175,222 182,957
Old Republic Insured Credit Services, Inc. 100,460 44,889 100,163 16,087
Brummel Brothers, Inc. 35,579 17,956 33,351 6,505
J. Huell Briscoe & Associates, Inc. 19,800 10,488 14,544 3,277
Old Republic General Services, Inc. 302,470 107,100 334,834 39,644
Old Republic Union Insurance Company 16,816 9,011 20,240 3,988
Old Republic Mortgage Guaranty Group,
Inc. & its Subsidiaries 1,053,287 449,076 929,585 155,895
Old Republic Title Holdings, Inc.
& its Subsidiaries and affiliates 2,922,322 1,210,866 2,206,479 386,706
Old Republic Asset Management Co. 23,091 10,639 20,748 4,361
Old Republic Dealer Service Corp. 13,742 5,009 9,936 1,987
Phoenix Aviation Managers, Inc. 135,401 50,867 96,378 14,615
Chicago Underwriting Group 107,296 42,247 91,507 13,907
Old Republic Risk Mgmt. Corp. 134,959 57,719 139,098 19,200
Bitco Corp. & its Subsidiaries 582,340 286,392 536,257 99,436
Great West Casualty and Agencies 655,089 358,647 598,226 128,542
Old Republic RE 110,797 38,597 108,669 16,726
Old Republic Home Protection 76,459 36,214 70,372 12,312
Old Republic Surety Group 361,880 132,366 313,667 45,826
Old Republic Standard Group 123,414 42,041 145,071 13,938
Employers General Insurance Group 397,506 195,145 370,691 71,859
Old Republic Minnehoma Insurance Co. 40,440 16,023 55,253 9,379
ORDESCO Inc. 14,068 7,731 15,205 1,133
Church Rickards, Whitlock & Co. 35,909 10,752 34,953 3,966
---------- ---------- ---------- ----------
$8,890,832 $3,755,042 $7,723,910 $1,304,571
========== ========== ========== ==========
9. Alternative Investment Funds
In November, 1982, the Plan was amended to permit participants to
transfer monies from Fund "A", the primary goal of which is protection
of capital and stability of income through investments in high-grade,
liquid investments, into a newly created Fund "O", and to elect to have
their future contributions to the Plan invested, in whole or in part, in
Fund "O".
14
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
----------
9. Alternative Investment Funds, Continued
Under the terms of the Plan, Fund "O" may be invested by the Trustee
upon the direction of the Plan's Administration Committee ("Committee")
in any property, real or personal and shares of stock, whether common or
preferred, voting trust certificates, bonds, mortgages, secured or
unsecured obligations, notes, annuity and life insurance contracts,
whether group or individual, and other securities and property of every
kind and description as the Committee selects (including securities of
the Company or any Employer under the Plan and any subsidiary or
affiliate of the Company or an Employer). Fund "O" may, as a result, be
more speculative and may incur a higher degree of risk than Fund "A"
since the Committee is permitted to direct the Trustee to invest in
private offerings, joint ventures, small, unseasoned or embryonic
companies without a record of earnings, companies not traded on an
established market, and other investments. The Committee has the
authority to direct the Trustee to borrow by pledging Fund "O" assets.
At December 31, 1996 there were 2,885 participants in Fund "A" and 1,690
participants in Fund "O".
Effective January 1, 1995, the Plan set up new Funds which offer
participants the opportunity to further diversify their future and
accumulated contributions (savings) and earnings thereon. The new Funds
are designated as "H", "I", "J", "K" and "L". Directions to change the
Funds to which savings can be directed or transfers from Fund "A" and
"O" can be done on January 1, or July 1 of each year. At December 31,
1996, there were 521, 569, 711, 459 and 108 participants in Funds "H",
"I", "J", "K" and "L", respectively.
A description of these investment options are as follows:
Fund "H" - Oakmark Fund seeks long-term capital appreciation and
invests in common stocks and other equity-type securities
seeking long-term capital appreciation.
Fund "I" - Fidelity Fund seeks long-term capital growth with
current income and invests mainly in common stocks and
securities that are convertible into common stock.
Fund "J" - Vanguard/Windsor II seeks to provide long-term growth
of capital and income with a secondary objective to provide
current income.
Fund "K" - T. Rowe Price International Stock Fund seeks long-term
growth of capital through investments primarily in common
stocks of established, non-U.S. companies.
Fund "L" - Benchmark Short-Intermediate Bond Portfolio Fund
invests in a broad range of short to intermediate term bonds
and other fixed income securities.
15
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
----------
9. Alternative Investment Funds, Continued
Effective January 1, 1997, a new investment option Mutual Fund will be
available for diversification as follows:
Fund "M" - Vanguard 500 Stock Index Fund seeks to establish and
manage its assets to track very closely to the Standard and
Poor's 500 Stock Index.
Effective January 1, 1989, the Tax Reform Act provided that plan
participants who reach age 55 and have 10 years of service in the Plan
are provided with the option of diversifying a portion of their
companies' account balance out of company stock and into alternative
investment funds. The diversification is limited to 25% of all company
stock acquired after December 31, 1986. After age 60 (and with 10 years
of service in the Plan), such participants have the right to diversify
up to 50% of all company stock acquired after December 31, 1986. The
period to make the election to diversify is during the first 90 days of
the calendar year in which a participant attains age 55 and has
completed 10 years of service in the plan.
The investment options available for diversification at December 31,
1996 are:
Fund "E" - Short-term investment fund composed of high grade money
market investments with very short-term maturities.
Fund "F" - Intermediate-term fund composed of high-grade
securities with maturities of five years or less.
Fund "G" - Open ended no load mutual fund with primary objective
being capital appreciation.
At December 31, 1996, there were 21 participants in Fund "E", 21
participants in Fund "F" and 65 participants in Fund "G".
Individual statements for each fund described above are contained in
Footnote 9.
Statements for each fund described above follow (Fund "B" is employer
directed only and is included for informational purposes only):
16
9. Alternative Investment Funds, Continued
-------------------------------------------------------------------
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
Allocation of Net Assets Available for Plan Benefits
Employee's Account by Investment Program
December 31, 1996
----------------
Fund "A" Fund "O" Fund "H" Fund "I"
------------------ ------------------- ------------------- -------------------
ASSETS
Investments, at fair value:
Collective Trusts:
Short-term Investment Fund $9,073,766 $2,220,347 $22,353 $18,053
Old Republic International Corporation:
Common shares 0 5,262,180 0 0
United States Government obligations 4,651,918 5,897,734 0 0
Corporate bonds 15,332,393 0 0 0
Other common stock 0 0 0 0
Mutual funds 0 287,220 2,624,798 2,437,266
------------------ ------------------- ------------------- -------------------
29,058,077 13,667,481 2,647,151 2,455,319
Contributions receivable:
Employee 0 1,505 0 0
Accrued interest and dividends receivable 406,522 94,647 54 99
------------------ ------------------- ------------------- -------------------
$29,464,599 $13,763,633 $2,647,205 $2,455,418
================== =================== =================== ===================
LIABILITIES AND NET ASSETS AVAILABLE
FOR PLAN BENEFITS
Unpaid withdrawal and termination benefits $310,837 $228,537 $85,129 $93,666
Other payables (receivables) 19,439 8,234 1,336 1,306
------------------ ------------------- ------------------- -------------------
Total liabilities 330,276 236,771 86,465 94,972
Net assets available for plan benefits 29,134,323 13,526,862 2,560,740 2,360,446
------------------ ------------------- ------------------- -------------------
$29,464,599 $13,763,633 $2,647,205 $2,455,418
================== =================== =================== ===================
Fund "J" Fund "K" Fund "L" Combined
------------------ ------------------- ------------------- -------------------
ASSETS
Investments, at fair value:
Collective Trusts:
Short-term Investment Fund $32,646 $15,435 $2,402 $11,385,002
Old Republic International Corporation:
Common shares 0 0 0 5,262,180
United States Government obligations 0 0 0 10,549,652
Corporate bonds 0 0 0 15,332,393
Other common stock 0 0 0 0
Mutual funds 3,738,894 1,706,886 270,096 11,065,160
------------------ ------------------- ------------------- -------------------
3,771,540 1,722,321 272,498 53,594,387
Contributions receivable:
Employee (1,011) 1,011 (1,505) 0
Accrued interest and dividends receivable 84 63 13 501,482
------------------ ------------------- ------------------- -------------------
$3,770,613 $1,723,395 $271,006 $54,095,869
================== =================== =================== ===================
LIABILITIES AND NET ASSETS AVAILABLE
FOR PLAN BENEFITS
Unpaid withdrawal and termination benefits $102,973 $51,805 $4,301 $877,248
Other payables (receivables) 1,855 887 141 33,198
------------------ ------------------- ------------------- -------------------
Total liabilities 104,828 52,692 4,442 910,446
Net assets available for plan benefits 3,665,785 1,670,703 266,564 53,185,423
------------------ ------------------- ------------------- -------------------
$3,770,613 $1,723,395 $271,006 $54,095,869
================== =================== =================== ===================
17
9. Alternative Investment Funds, Continued
-------------------------------------------------------------------
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
Allocation of Net Assets Available for Plan Benefits
Employee's Account by Investment Program
December 31, 1995
----------------
Fund "A" Fund "O" Fund "H" Fund "I"
------------------ ------------------- ------------------- -------------------
ASSETS
Investments, at fair value:
Collective Trusts:
Short-term Investment Fund $4,501,568 $1,848,899 $8,172 $21,748
Old Republic International Corporation:
Common shares 0 4,634,880 0 0
Debentures 0 20,250 0 0
United States Government obligations 5,771,312 4,659,601 0 0
Corporate bonds 18,946,969 0 0 0
Other common stock 0 210,750 0 0
Mutual funds 0 235,644 1,338,088 1,344,401
------------------ ------------------- ------------------- -------------------
29,219,849 11,610,024 1,346,260 1,366,149
Contributions receivable:
Employee 94,994 26,925 4,960 7,113
Accrued interest and dividends receivable 489,155 97,120 37 56
------------------ ------------------- ------------------- -------------------
$29,803,998 $11,734,069 $1,351,257 $1,373,318
================== =================== =================== ===================
LIABILITIES AND NET ASSETS AVAILABLE
FOR PLAN BENEFITS
Unpaid withdrawal and termination benefits $174,421 $132,905 $49,205 $49,749
Other payables (receivables) (25,488) (1,328) 29,924 (11,261)
------------------ ------------------- ------------------- -------------------
Total liabilities 148,933 131,577 79,129 38,488
Net assets available for plan benefits 29,655,065 11,602,492 1,272,128 1,334,830
------------------ ------------------- ------------------- -------------------
$29,803,998 $11,734,069 $1,351,257 $1,373,318
================== =================== =================== ===================
Fund "J" Fund "K" Fund "L" Combined
------------------ ------------------- ------------------- -------------------
ASSETS
Investments, at fair value:
Collective Trusts:
Short-term Investment Fund $8,008 $4,176 $2,444 $6,395,015
Old Republic International Corporation:
Common shares 0 0 0 4,634,880
Debentures 0 0 0 20,250
United States Government obligations 0 0 0 10,430,913
Corporate bonds 0 0 0 18,946,969
Other common stock 0 0 0 210,750
Mutual funds 1,853,004 1,008,251 137,033 5,916,421
------------------ ------------------- ------------------- -------------------
1,861,012 1,012,427 139,477 46,555,198
Contributions receivable:
Employee 9,881 6,536 871 151,280
Accrued interest and dividends receivable 55 27 5 586,455
------------------ ------------------- ------------------- -------------------
$1,870,948 $1,018,990 $140,353 $47,292,933
================== =================== =================== ===================
LIABILITIES AND NET ASSETS AVAILABLE
FOR PLAN BENEFITS
Unpaid withdrawal and termination benefits $38,863 $20,125 $1,145 $466,413
Other payables (receivables) 29,697 8,982 339 30,865
------------------ ------------------- ------------------- -------------------
Total liabilities 68,560 29,107 1,484 497,278
Net assets available for plan benefits 1,802,388 989,883 138,869 46,795,655
------------------ ------------------- ------------------- -------------------
$1,870,948 $1,018,990 $140,353 $47,292,933
================== =================== =================== ===================
18
9. Alternative Investment Funds, Continued
-------------------------------------------------------------------
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
Allocation of Net Assets Available for Plan Benefits
Companies' Account by Investment Program
December 31, 1996
----------------
Fund "B" Fund "E" Fund "F"
------------------- ------------------- -------------------
ASSETS
Investments, at fair value:
Collective Trusts:
Short-term Investment Fund $173,502 $131,586 $65
Old Republic International Corporation:
Series "D" preferred shares 174,280,974 0 0
Common shares 924,881 0 0
United States Government obligations 0 0 0
Corporate bonds 0 0 0
Other common stock 0 0 0
Mutual funds 0 0 127,619
------------------- ------------------- -------------------
175,379,357 131,586 127,684
Contributions receivable:
Employer 3,739,210 0 0
Accrued interest and dividends receivable 412 601 0
------------------- ------------------- -------------------
$179,118,979 $132,187 $127,684
=================== =================== ===================
LIABILITIES AND NET ASSETS AVAILABLE
FOR PLAN BENEFITS
Notes payable to banks $11,109,234 $0 $0
Advances from plan sponsor (non-interest bearing) 738,895 0 0
Accrued interest payable 119,921 0 0
Unpaid (recoverable) administrative expenses (54,551) 70 86
------------------- ------------------- -------------------
Total liabilities 11,913,499 70 86
------------------- ------------------- -------------------
Net assets available for plan benefits
Allocated to participants 147,044,148 132,117 127,598
Not allocated to participants 20,161,332 0 0
------------------- ------------------- -------------------
Total net assets available for plan benefits 167,205,480 132,117 127,598
------------------- ------------------- -------------------
$179,118,979 $132,187 $127,684
=================== =================== ===================
Fund "G" Combined
------------------- -------------------
ASSETS
Investments, at fair value:
Collective Trusts:
Short-term Investment Fund $29 $305,182
Old Republic International Corporation:
Series "D" preferred shares 0 174,280,974
Common shares 0 924,881
United States Government obligations 0 0
Corporate bonds 0 0
Other common stock 0 0
Mutual funds 1,102,568 1,230,187
------------------- -------------------
1,102,597 176,741,224
Contributions receivable:
Employer 0 3,739,210
Accrued interest and dividends receivable 8 1,021
------------------- -------------------
$1,102,605 $180,481,455
=================== ===================
LIABILITIES AND NET ASSETS AVAILABLE
FOR PLAN BENEFITS
Notes payable to banks $0 $11,109,234
Advances from plan sponsor (non-interest bearing) 0 $738,895
Accrued interest payable 0 $119,921
Unpaid (recoverable) administrative expenses 645 (53,750)
------------------- -------------------
Total liabilities 645 11,914,300
------------------- -------------------
Net assets available for plan benefits
Allocated to participants 1,101,960 148,405,823
Not allocated to participants 0 20,161,332
------------------- -------------------
Total net assets available for plan benefits 1,101,960 168,567,155
------------------- -------------------
$1,102,605 $180,481,455
=================== ===================
19
9. Alternative Investment Funds, Continued
-------------------------------------------------------------------
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
Allocation of Net Assets Available for Plan Benefits
Companies' Account by Investment Program
December 31, 1995
-----------------
Fund "B" Fund "E" Fund "F"
------------------- ------------------- -------------------
ASSETS
Investments, at fair value:
Collective Trusts:
Short-term Investment Fund $610,952 $ 36,688 $74
Old Republic International Corporation:
Series "D" preferred shares 158,022,428 0 0
Common shares 11,242,424 0 0
United States Government obligations 0 0 0
Corporate bonds 0 0 0
Other common stock 0 0 0
Mutual funds 0 0 103,509
------------------- ------------------- -------------------
169,875,804 36,688 103,509
Contributions receivable:
Employer 1,296,847 0 0
Accrued interest and dividends receivable 4,853 181 0
------------------- ------------------- -------------------
$171,177,504 $ 36,869 $103,583
=================== =================== ===================
LIABILITIES AND NET ASSETS AVAILABLE
FOR PLAN BENEFITS
Notes payable to banks $13,934,234 $0 $0
Accrued interest payable 159,540 0 0
Unpaid (recoverable) administrative expenses (7,191) 24 69
------------------- ------------------- -------------------
Total liabilities 14,086,583 24 69
------------------- ------------------- -------------------
Net assets available for plan benefits
Allocated to participants 135,355,161 36,845 103,514
Not allocated to participants 21,735,760 0 0
------------------- ------------------- -------------------
Total net assets available for plan benefits 157,090,921 36,845 103,514
------------------- ------------------- -------------------
$171,177,504 $ 36,869 $103,583
=================== =================== ===================
Fund "G" Combined
------------------- -------------------
ASSETS
Investments, at fair value:
Collective Trusts:
Short-term Investment Fund $84 $647,798
Old Republic International Corporation:
Series "D" preferred shares 0 158,022,428
Common shares 0 11,242,424
United States Government obligations 0 0
Corporate bonds 0 0
Other common stock 0 0
Mutual funds 721,946 825,455
------------------- -------------------
722,030 170,738,105
Contributions receivable:
Employer 0 1,296,847
Accrued interest and dividends receivable 1 5,035
------------------- -------------------
$ 722,031 $172,039,987
=================== ===================
LIABILITIES AND NET ASSETS AVAILABLE
FOR PLAN BENEFITS
Notes payable to banks $0 $13,934,234
Accrued interest payable 0 159,540
Unpaid (recoverable) administrative expenses 465 (6,633)
------------------- -------------------
Total liabilities 465 14,087,141
------------------- -------------------
Net assets available for plan benefits
Allocated to participants 721,566 136,217,086
Not allocated to participants 0 21,735,760
------------------- -------------------
Total net assets available for plan benefits 721,566 157,952,846
------------------- -------------------
$ 722,031 $172,039,987
=================== ===================
20
9. Alternative Investment Funds, Continued
- -------------------------------------------------------------------
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
Allocation of Changes in Net Assets Available for Plan Benefits
Employee's Account by Investment Program
for the year ended December 31, 1996
----------------
Fund "A" Fund "O" Fund "H" Fund "I"
----------------- -------------------- ------------------- -------------------
Additions:
Employee contributions $4,245,128 $1,985,824 $641,920 $679,165
Interfund transfers (2,006,271) 247,603 538,703 281,396
Interest income 1,849,624 339,700 1,464 1,546
Dividend income 0 100,144 26,197 31,415
Net appreciation (depreciation) in
fair value of investments (483,970) 785,064 304,813 329,850
----------------- -------------------- ------------------- -------------------
3,604,511 3,458,335 1,513,097 1,323,372
----------------- -------------------- ------------------- -------------------
Deductions:
Termination and withdrawal benefits 4,105,814 1,525,730 223,148 296,450
Administrative expenses 19,439 8,235 1,337 1,306
----------------- -------------------- ------------------- -------------------
4,125,253 1,533,965 224,485 297,756
----------------- -------------------- ------------------- -------------------
NET ADDITIONS (DEDUCTIONS) (520,742) 1,924,370 1,288,612 1,025,616
Net assets available for plan benefits,
beginning of year 29,655,065 11,602,492 1,272,128 1,334,830
----------------- -------------------- ------------------- -------------------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, END OF YEAR $29,134,323 $13,526,862 $2,560,740 $2,360,446
================= ==================== =================== ===================
Fund "J" Fund "K" Fund "L" Combined
----------------- ------------------- ------------------- --------------------
Additions:
Employee contributions $848,190 $419,300 $71,305 $8,890,832
Interfund transfers 643,707 221,170 73,692 0
Interest income 1,782 849 1,183 2,196,148
Dividend income 87,011 21,445 12,402 278,614
Net appreciation (depreciation) in
fair value of investments 566,444 181,190 (2,002) 1,681,389
----------------- ------------------- ------------------- --------------------
2,147,134 843,954 156,580 13,046,983
----------------- ------------------- ------------------- --------------------
Deductions:
Termination and withdrawal benefits 281,883 162,247 28,744 6,624,016
Administrative expenses 1,854 887 141 33,199
----------------- ------------------- ------------------- --------------------
283,737 163,134 28,885 6,657,215
----------------- ------------------- ------------------- --------------------
NET ADDITIONS (DEDUCTIONS) 1,863,397 680,820 127,695 6,389,768
Net assets available for plan benefits,
beginning of year 1,802,388 989,883 138,869 46,795,655
----------------- ------------------- ------------------- --------------------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, END OF YEAR $3,665,785 $1,670,703 $266,564 $53,185,423
================= =================== =================== ====================
21
9. Alternative Investment Funds, Continued
-------------------------------------------------------------------
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
Allocation of Changes in Net Assets Available for Plan Benefits
Employee's Account by Investment Program
for the year ended December 31, 1995
----------------
Fund "A" Fund "O" Fund "H" Fund "I"
------------------ ------------------- ------------------- -------------------
Additions:
Employee contributions $4,388,734 $1,666,728 $350,788 $420,508
Interfund transfers (2,529,414) (562,836) 733,521 731,721
Interest income 1,859,584 132,770 513 709
Dividend income 0 166,105 12,186 19,272
Net appreciation (depreciation) in
fair value of investments 1,103,221 3,120,565 255,988 239,823
------------------ ------------------- ------------------- -------------------
4,822,125 4,523,332 1,352,996 1,412,033
------------------ ------------------- ------------------- -------------------
Deductions:
Termination and withdrawal benefits 3,578,836 1,250,634 80,343 76,662
Administrative expenses 21,310 7,251 525 541
------------------ ------------------- ------------------- -------------------
3,600,146 1,257,885 80,868 77,203
------------------ ------------------- ------------------- -------------------
NET ADDITIONS (DEDUCTIONS) 1,221,979 3,265,447 1,272,128 1,334,830
Net assets available for plan benefits,
beginning of year 28,433,086 8,337,045 0 0
------------------ ------------------- ------------------- -------------------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, END OF YEAR $29,655,065 $11,602,492 $1,272,128 $1,334,830
================== =================== =================== ===================
Fund "J" Fund "K" Fund "L" Combined
------------------ ------------------- ------------------- -------------------
Additions:
Employee contributions $513,376 $344,256 $39,520 $7,723,910
Interfund transfers 947,826 590,063 89,119 0
Interest income 703 466 114 1,994,859
Dividend income 44,377 14,253 5,593 261,786
Net appreciation (depreciation) in
fair value of investments 352,508 82,244 6,076 5,160,425
------------------ ------------------- ------------------- -------------------
1,858,790 1,031,282 140,422 15,140,980
------------------ ------------------- ------------------- -------------------
Deductions:
Termination and withdrawal benefits 55,650 40,973 1,493 5,084,591
Administrative expenses 752 426 60 30,865
------------------ ------------------- ------------------- -------------------
56,402 41,399 1,553 5,115,456
------------------ ------------------- ------------------- -------------------
NET ADDITIONS (DEDUCTIONS) 1,802,388 989,883 138,869 10,025,524
Net assets available for plan benefits,
beginning of year 0 0 0 36,770,131
------------------ ------------------- ------------------- -------------------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, END OF YEAR $1,802,388 $989,883 $138,869 $46,795,655
================== =================== =================== ===================
22
9. Alternative Investment Funds, Continued
- -------------------------------------------
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
Allocation of Changes in Net Assets Available for Plan Benefits
Companies' Account by Investment Program
for the year ended December 31, 1996
----------------
Fund "B" Fund "E" Fund "F"
-------------------- -------------------- --------------------
Additions:
Employer contributions $3,755,042 $0 $0
Interfund transfers (475,253) 92,460 43,870
Interest income 45,974 5,490 7,243
Dividend income 2,946,154 0 0
Net appreciation (depreciation) in
fair value of investments 19,219,562 0 (1,146)
-------------------- -------------------- --------------------
25,491,479 97,950 49,967
-------------------- -------------------- --------------------
Deductions:
Termination and withdrawal benefits 14,446,481 2,608 25,798
Interest expense 777,063 0 0
Administrative expenses 153,376 70 85
-------------------- -------------------- --------------------
15,376,920 2,678 25,883
-------------------- -------------------- --------------------
NET ADDITIONS (DEDUCTIONS) 10,114,559 95,272 24,084
Net assets available for plan benefits,
beginning of year 157,090,921 36,845 103,514
-------------------- -------------------- --------------------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, END OF YEAR $167,205,480 $132,117 $127,598
==================== ==================== ====================
Fund "G" Combined
-------------------- -------------------
Additions:
Employer contributions $0 $3,755,042
Interfund transfers 338,923 0
Interest income 427 59,134
Dividend income 8,172 2,954,326
Net appreciation (depreciation) in
fair value of investments 131,400 19,349,816
-------------------- -------------------
478,922 26,118,318
-------------------- -------------------
Deductions:
Termination and withdrawal benefit 97,883 14,572,770
Interest expense 0 777,063
Administrative expenses 645 154,176
-------------------- -------------------
98,528 15,504,009
-------------------- -------------------
NET ADDITIONS (DEDUCTIONS) 380,394 10,614,309
Net assets available for plan benefits,
beginning of year 721,566 157,952,846
-------------------- -------------------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, END OF YEAR $1,101,960 $168,567,155
==================== ===================
23
9. Alternative Investment Funds, Continued
- -------------------------------------------
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
Allocation of Changes in Net Assets Available for Plan Benefits
Companies' Account by Investment Program
for the year ended December 31, 1995
----------------
Fund "B" Fund "E" Fund "F"
-------------------- ------------------- --------------------
Additions:
Employer contributions $1,304,571 $0 $0
Interfund transfers (132,929) 11,391 23,613
Interest income 170,943 1,977 5,231
Dividend income 3,048,184 0 0
Net appreciation (depreciation) in
fair value of investments 68,057,517 0 5,543
-------------------- ------------------- --------------------
72,448,286 13,368 34,387
-------------------- ------------------- --------------------
Deductions:
Termination and withdrawal benefits 5,276,424 784 1,909
Interest expense 978,107 0 0
Administrative expenses 211,306 24 69
-------------------- ------------------- --------------------
6,465,837 808 1,978
-------------------- ------------------- --------------------
NET ADDITIONS (DEDUCTIONS) 65,982,449 12,560 32,409
Net assets available for plan benefits,
beginning of year 91,108,472 24,285 71,105
-------------------- ------------------- --------------------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, END OF YEAR $157,090,921 $36,845 $103,514
==================== =================== ====================
Fund "G" Combined
-------------------- -------------------
Additions:
Employer contributions $0 $1,304,571
Interfund transfers 97,925 0
Interest income 275 178,426
Dividend income 4,522 3,052,706
Net appreciation (depreciation) in
fair value of investments 126,489 68,189,549
-------------------- -------------------
229,211 72,725,252
-------------------- -------------------
Deductions:
Termination and withdrawal benefits 62,327 5,341,444
Interest expense 0 978,107
Administrative expenses 464 211,863
-------------------- -------------------
62,791 6,531,414
-------------------- -------------------
NET ADDITIONS (DEDUCTIONS) 166,420 66,193,838
Net assets available for plan benefits,
beginning of year 555,146 91,759,008
-------------------- -------------------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, END OF YEAR $721,566 $157,952,846
==================== ===================
24
SUPPLEMENTAL SCHEDULES
25
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
ASSETS AND LIABILITIES
AT DECEMBER 31, 1995 and 1996
- -------------------------------------------------------------------------------
31. Current value of plan assets and liabilities at the beginning and end of the
plan year. Combine the value of plan assets held in more than one trust.
Allocate the value of the plan's interest in a comingled trust containing the
assets of more than one plan on a line-by-line basis unless the trust meets one
of the specific exceptions described in the instructions. Do not enter the value
of that portion of an insurance contract that guarantees, during this plan year,
to pay specific dollar benefit at a future date. ROUND OFF AMOUNTS TO THE
NEAREST DOLLAR; ANY OTHER AMOUNTS ARE SUBJECT TO REJECTION. Plans with no assets
at the beginning and the end of the plan year, enter -0- on line 31f.
- -------------------------------------------------------------------------------
ASSETS | | Beginning of Year| End of Year
a Total noninterest-bearing cash | a | 0 | 0
b Receivables: (1) Employer contributions | b(1) | 1,296,847 | 3,739,210
(2) Participant contributions | (2) | 151,280 | 0
(3) Income | (3) | 591,490 | 502,503
(4) Other | (4) | 0 | 0
(5) Less allowance for doubtful accounts | (5) | 0 | 0
(6) Total. Add lines 31b(1) through 31b(4) and subtract line 31b(5) | (6) | 2,039,617 | 4,241,713
c General investments:
(1) Interest-bearing cash (including money market funds) | c(1) | 0 | 0
(2) Certificates of deposit | (2) | 0 | 0
(3) U.S. Government securities | (3) | 10,430,913 | 10,549,652
(4) Corporate debt instruments: (A) Preferred | (4)(A) | 18,946,969 | 15,332,393
(B) All other | (4)(B) | 0 | 0
(5) Corporate stocks: (A) Preferred | (5)(A) | 0 | 0
(B) Common | (5)(B) | 210,750 | 0
(6) Partnership/joint venture interests | (6) | 0 | 0
(7) Real estate: (A) Income-producing | (7)(A) | 0 | 0
(B) Nonincome-producing | (7)(B) | 0 | 0
(8) Loans (other than to participants) secured by mortgages:
(A) Residential | (8)(A) | 0 | 0
(B) Commercial | (8)(B) | 0 | 0
(9) Loans to participants: (A) Mortgages | (9)(A) | 0 | 0
(B) Other | (9)(B) | 0 | 0
(10) Other loans | (10) | 0 | 0
(11) Value of interest in common/collective trusts | (11) | 7,042,813 | 11,690,184
(12) Value of interest in pooled separate accounts | (12) | 0 | 0
(13) Value of interest in master trusts | (13) | 0 | 0
(14) Value of interest in 103-12 investment entities | (14) | 0 | 0
(15) Value of interest in registered investment companies | (15) | 0 | 0
(16) Value of funds held in insurance company general account
(unallocated contracts) | (16) | 0 | 0
(17) Other - Mutual Funds | (17) | 6,741,876 | 12,295,347
(18) Total. Add lines 31c(1) through 31c(17) | (18) | 43,373,321 | 49,867,576
d Employer-related investments: (1) Employer securities | d(1) | 173,919,982 | 180,468,035
(2) Employer real property | (2) | 0 | 0
e Buildings and other property used in plan operation | e | 0 | 0
f TOTAL assets. Add lines 31a, 31b(6), 31c(18), 31d(1), 31d(2), and 31e. | f | 219,332,920 | 234,577,324
| | |
LIABILITIES | | |
g Benefit claims payable | g | 466,413 | 877,248
h Operating payables | h | 183,772 | 838,264
i Acquisition indebtedness | i | 13,934,234 | 11,109,234
j Other liabilities | j | 0 | 0
k TOTAL liabilities. Add lines 31g through 31j | k | 14,584,419 | 12,824,746
| | |
NET ASSETS | | |
l Subtract line 31k from line 31f. | l | 204,748,501 | 221,752,578
26
OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
INCOME, EXPENSES, AND CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996
- -------------------------------------------------------------------------------
32. Plan income, expenses, and changes in net assets for the plan year. Include
all income and expenses of the plan, including any trust(s) or seperately
maintained fund(s), and any payments/receipts to/from insurance carriers. ROUND
OFF AMOUNTS TO THE NEAREST DOLLAR; ANY OTHER AMOUNTS ARE SUBJECT TO REJECTION.
- ------------------------------------------------------------------------------
INCOME | | Amount | Total
a Contributions: | | |
(1) Received or receivable from: | | |
(A) Employers | a(1)(A) | 3,755,042 |
(B) Participants | (B) | 8,890,832 |
(C) Others | (C) | 0 |
(2) Noncash contributions | (2) | 0 |
(3) Total contributions. Add lines 32a(1)(A),(B),(C) and line 32a(2). | (3) | | 12,645,874
b Earnings on investments: | | |
(1) Interest: | | |
(A) Interest-bearing cash (including money market funds) | b(1)(A) | 429,593 |
(B) Certificates of deposit | (B) | 0 |
(C) U.S. Government securities | (C) | 648,703 |
(D) Corporate debt instruments | (D) | 1,176,986 |
(E) Mortgage loans | (E) | 0 |
(F) Other loans | (F) | 0 |
(G) Other interest | (G) | 0 |
(H) Total interest. Add lines 32b(1)(A) through (G) | (H) | | 2,255,282
(2) Dividends: (A) Preferred stock | b(2)(A) | 2,875,147 |
(B) Common stock | (B) | 357,793 |
(C) Total dividends. Add lines 32b(2)(A) and (B). | (C) | | 3,232,940
(3) Rents | (3) | |
(4) Net gain (loss) on sale of assets: (A) Aggregate proceeds | (4)(A) | 24,560,979 |
(B) Aggregate carrying amount (see instructions) | (B) | 13,736,511 |
(C) Subtract (B) from (A) and enter result | (C) | | 10,824,468
(5) Unrealized appreciation (depreciation) of assets | (5) | | 10,206,737
(6) Net investment gain (loss) from common/collective trusts | (6) | | 0
(7) Net investment gain (loss) from pooled separate accounts | (7) | | 0
(8) Net investment gain (loss) from master trusts | (8) | | 0
(9) Net investment gain (loss) from 103-12 investment entities | (9) | | 0
(10) Net investment gain (loss) from registered investment companies | (10) | | 0
c Other income | c | | 0
d Total income. Add all amounts in column (b) and enter total. | d | | 39,165,301
EXPENSES | | |
e Benefit payment and payments to provide benefits: | | |
(1) Directly to participants or beneficiaries | e(1) | 21,196,786 |
(2) To insurance carriers for the provision of benefits | (2) | 0 |
(3) Other | (3) | 0 |
(4) Total payments. Add lines 32e(1) through 32e(3) | (4) | | 21,196,786
f Interest expense | f | | 777,063
g Administrative expenses: (1) Salaries and allowances | g(1) | 0 |
(2) Accounting fees | (2) | 47,741 |
(3) Actuarial fees | (3) | 0 |
(4) Contract administrator fees | (4) | 0 |
(5) Investment advisory and management fees | (5) | 77,099 |
(6) Legal fees | (6) | 32,446 |
(7) Valuation/appraisal fees | (7) | (10,000)|
(8) Trustees fees/expenses (including travel, seminars, meetings, etc.) | (8) | 40,089 |
(9) Other | (9) | 0 |
(10) Total administrative fees. Add lines 32g(1) through 32g(9). | (10) | | 187,375
h Total expenses. Add lines 32e(4), 32f, and 32g(10). | h | | 22,161,224
i Net income (loss). Subtract line 32h from line 32d. | i | | 17,004,077
j Transfers to (from) the plan (see instructions) | j | | 0
k Net assets at beginning of year (line 31l, column (a)). | k | | 204,748,501
l Net assets at end of year (line 31l, column (b)). | l | | 221,752,578
27
OLD REPUBLIC INTERNATIONAL CORPORATION SCHEDULE I
EMPLOYEES SAVINGS & STOCK OWNERSHIP PLAN PAGE 1 of 2
FORM 5500-ANNUAL RETURN/REPORT OF EMPLOYEE BENEFIT PLAN
ITEM 27a-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
(c)
DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE,
RATE OF INTEREST, COLLATERAL, PAR OR MATURITY VALUE
---------------------------------------------------
(b) SHARES, PAR, (e)
IDENTITY OF ISSUE, BORROWER, MATURITY RATE OF OR MATURITY (d) CURRENT
(a) LESSOR, OR SIMILAR PARTY DATE INTEREST COLLATERAL VALUE COST VALUE
- --- ----------------------------------------------- -------- -------- ---------- ------------ ---------- ----------
COLLECTIVE TRUSTS:
SHORT-TERM INVESTMENT FUND N/A VARIABLE N/A 11,690,184sh $11,690,184 $11,690,184
========== -------------------------
EMPLOYER SECURITIES:
OLD REPUBLIC INTERNATIONAL CORP.:
SERIES D PREFERRED STOCK N/A N/A N/A 32,575,883sh $38,579,244 $174,280,974
========== -------------------------
COMMON STOCK N/A N/A N/A 231,292sh $1,642,198 $6,187,061
========== -------------------------
UNITED STATES GOVERNMENT OBLIGATIONS:
FEDERAL HOME LOAN MORTGAGE CORP. 09/19/01 7.900% N/A $500,000par $566,719 $530,000
FEDERAL NATIONAL MORTGAGE CORP. 02/11/02 7.500% N/A 325,000par 357,594 339,931
USA TREASURY NOTE 08/31/00 6.250% N/A 600,000par 603,563 602,250
USA TREASURY NOTE 08/15/98 5.875% N/A 600,000par 598,313 600,282
USA TREASURY NOTE 08/31/97 6.000% N/A 600,000par 601,547 601,686
USA TREASURY NOTE 02/28/99 5.500% N/A 500,000par 502,969 495,780
USA TREASURY NOTE 05/15/05 6.500% N/A 500,000par 511,016 503,360
USA TREASURY NOTE; SERIES B 08/15/97 8.625% N/A 500,000par 538,750 509,455
USA TREASURY NOTE; SERIES B 08/15/03 5.750% N/A 500,000par 486,875 485,000
USA TREASURY NOTE; SERIES C 08/15/04 7.250% N/A 500,000par 534,766 526,250
USA TREASURY NOTE; SERIES G 07/15/98 8.250% N/A 500,000par 517,188 517,810
USA TREASURY NOTE; SERIES G 07/15/99 6.375% N/A 600,000par 605,250 605,436
USA TREASURY NOTE; SERIES H 10/15/98 7.125% N/A 500,000par 527,500 510,625
USA TREASURY NOTE; SERIES M 04/30/98 5.125% N/A 500,000par 498,672 496,170
USA TREASURY NOTE; SERIES P 07/31/97 5.500% N/A 750,000par 753,633 750,353
USA TREASURY NOTE; SERIES U 12/31/97 6.000% N/A 500,000par 507,656 501,795
USA TREASURY BILL 02/13/97 4.970% N/A 1,000,000par 974,459 994,250
USA TREASURY BILL 05/29/97 5.100% N/A 1,000,000par 958,530 979,220
----------- -------------------------
$10,475,000par $10,644,997 $10,549,652
=========== -------------------------
MUTUAL FUNDS:
MFO OAKMARK FUND,HARRIS ASSOC.INVEST.TR. N/A N/A N/A 4,394sh $74,204 $142,157
MFO OAKMARK INTERNATIONAL FUND N/A N/A N/A 9,251sh 120,270 145,062
MFB BENCHMARK SHORT-INTERMEDIATE BONDS N/A N/A N/A 6,228sh 125,945 127,619
MFO FIDELITY TREND FUND N/A N/A N/A 19,408sh 1,023,643 1,102,568
MFO OAKMARK FUND, HARRIS ASSOC.INVEST.TR. N/A N/A N/A 81,138sh 2,252,663 2,624,798
MFO FIDELITY FUND N/A N/A N/A 98,675sh 2,117,392 2,437,266
MFO VANGUARD/WINDSOR II N/A N/A N/A 156,899sh 3,054,578 3,738,894
MFO T. ROWE PRICE INTERNATIONAL FUNDS N/A N/A N/A 123,687sh 1,488,712 1,706,886
MFB BENCHMARK SHORT-INTERMEDIATE BONDS N/A N/A N/A 13,182sh 267,521 270,096
----------- -------------------------
512,862sh $10,524,927 $12,295,347
=========== -------------------------
28
OLD REPUBLIC INTERNATIONAL CORPORATION SCHEDULE I
EMPLOYEES SAVINGS & STOCK OWNERSHIP PLAN PAGE 2 of 2
FORM 5500-ANNUAL RETURN/REPORT OF EMPLOYEE BENEFIT PLAN
ITEM 27a-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
(c)
DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE,
RATE OF INTEREST, COLLATERAL, PAR OR MATURITY VALUE
---------------------------------------------------
(b) SHARES, PAR, (e)
IDENTITY OF ISSUE, BORROWER, MATURITY RATE OF OR MATURITY (d) CURRENT
(a) LESSOR, OR SIMILAR PARTY DATE INTEREST COLLATERAL VALUE COST VALUE
- --- ----------------------------------------------- -------- -------- ---------- ------------ ---------- ----------
CORPORATE BONDS:
ARCHER DANIELS MIDLAND CO. 05/15/03 6.250% N/A $250,000par $253,478 $244,225
ALABAMA POWER CO. 08/01/99 6.375% N/A 250,000par 254,985 250,485
AMERICAN BRANDS, INC. 05/15/99 7.500% N/A 250,000par 263,000 255,600
AMERICAN HOME PRODUCTS CORP. 04/15/97 6.875% N/A 250,000par 261,665 250,745
BELLSOUTH TELECOMMUNICATIONS, INC. 02/01/00 6.500% N/A 250,000par 262,835 251,875
BP AMERICA, INC. 12/01/97 8.875% N/A 250,000par 261,748 256,525
CAMPBELL SOUP CO. 11/01/97 9.000% N/A 250,000par 280,890 256,050
CAROLINA POWER & LIGHT CO. 02/01/00 6.125% N/A 250,000par 253,063 247,360
CHESAPEAKE & POTOMAC TELEPHONE CO. 05/01/03 6.000% N/A 250,000par 249,068 240,950
CINCINNATI G & E 02/15/99 5.800% N/A 250,000par 249,835 247,698
COCA COLA CO. 09/15/98 7.875% N/A 250,000par 249,230 257,138
DAYTON HUDSON CORP. 03/01/99 7.500% N/A 250,000par 260,233 255,808
DILLIARD DEPARTMENT STORES, INC. 06/15/99 7.375% N/A 215,000par 225,266 218,836
EASTMAN KODAK CO. 05/01/97 8.550% N/A 202,000par 209,537 203,719
EXXON CAPITAL CORP. 08/15/97 7.875% N/A 250,000par 250,938 253,240
GANNETT, INC. 03/01/98 5.250% N/A 250,000par 247,338 248,110
GTE NORTHWEST 02/15/99 6.125% N/A 250,000par 252,560 249,243
CENTRAL TELEPHONE CO. OF CALIFORNIA 12/01/97 6.750% N/A 250,000par 235,805 249,410
HEINZ, H. J. CO. 10/15/99 6.750% N/A 250,000par 254,253 252,470
IBM CORP. 11/01/97 6.375% N/A 250,000par 250,830 250,903
ICI WILMINGTON, INC. 11/15/00 9.500% N/A 250,000par 287,353 275,065
INTERNATIONAL PAPER CO. 03/15/00 9.700% N/A 250,000par 282,083 271,715
KELLOGG CO 07/15/97 5.900% N/A 200,000par 199,570 200,338
KIMBERLY-CLARK CORP. 06/01/97 9.125% N/A 200,000par 215,102 202,482
LILLY, ELI 11/15/99 6.750% N/A 250,000par 255,275 252,718
LOUISVILLE GAS & ELECTRIC CO. 06/01/98 6.750% N/A 250,000par 237,960 248,575
MONONGAHELA POWER CO. 04/01/00 5.625% N/A 250,000par 247,223 244,153
MORGAN, J.P. & CO. 11/15/98 7.625% N/A 250,000par 272,280 256,058
MOUNTAIN STATES TELEPHONE & TELEGRAPH CO. 05/01/00 9.500% N/A 250,000par 284,113 272,590
NATIONAL RURAL UTILILITIES CO-OP FIN. CORP. 05/15/97 9.500% N/A 250,000par 266,790 253,028
NEW ENGLAND TELEPHONE & TELEGRAPH CO. 03/15/03 6.250% N/A 250,000par 253,360 245,333
NORDSTROM, INC. 02/15/98 8.875% N/A 250,000par 265,505 257,403
NORFOLK & SOUTHERN RAILWAY SERIES D CERT. 08/01/99 6.500% N/A 500,000par 501,670 500,990
NORTHERN ILLINOIS GAS CO. 02/01/97 5.500% N/A 300,000par 298,800 299,898
NORTHERN STATES POWER 10/01/97 5.875% N/A 250,000par 250,988 249,730
NORWEST FINANCIAL, INC. 04/15/98 5.500% N/A 250,000par 248,155 248,625
OHIO BELL TELEPHONE CO. 05/01/00 5.750% N/A 150,000par 151,839 146,397
OKLAHOMA GAS & ELECTRIC CO. 01/01/97 5.125% N/A 500,000par 481,050 500,000
PACIFIC TELEPHONE & TELEGRAPH CO. 05/01/00 4.625% N/A 500,000par 437,855 472,680
PENNEY, J. C., INC. 11/15/98 5.375% N/A 250,000par 247,580 246,403
PEPSICO, INC. 10/01/98 7.750% N/A 250,000par 262,885 255,773
PRIVATE EXPORT FUNDING CORP. 01/31/02 7.300% N/A 500,000par 550,215 517,660
ROCKWELL INTERNATIONAL CORP. 02/15/01 8.375% N/A 250,000par 288,465 266,480
SHELL OIL CO. 12/15/98 6.950% N/A 250,000par 258,458 253,315
SOUTHERN BELL TELEPHONE & TELEGRAPH CO. 09/01/00 4.750% N/A 500,000par 438,010 469,470
SOUTHERN CALIFORNIA EDISON CO. 04/15/99 7.500% N/A 500,000par 519,675 512,565
TAMPA ELECTRIC CO. 05/01/00 5.750% N/A 250,000par 250,780 243,753
TEXACO CAPITAL, INC. 07/15/99 6.875% N/A 500,000par 499,030 504,640
UNION PACIFIC RAILROAD CO. 01/15/98 6.440% N/A 200,000par 202,192 200,798
UPJOHN CO. 04/15/00 5.875% N/A 250,000par 252,893 245,908
WALMART STORES, INC. 09/15/97 5.500% N/A 250,000par 245,973 249,378
WARNER LAMBERT 09/01/98 8.000% N/A 250,000par 270,373 256,600
WEST PENN POWER CO. 06/01/98 5.500% N/A 250,000par 249,318 248,390
WMX TECHNOLOGIES, INC. 03/22/97 7.125% N/A 250,000par 254,590 250,658
XEROX CORP. 03/15/00 9.750% N/A 250,000par 283,633 272,443
----------- -----------------------------
$15,217,000par $15,537,593 $15,332,393
=========== -----------------------------
PLAN TOTAL $88,619,143 $230,335,611
=============================
29
OLD REPUBLIC INTERNATIONAL CORPORATION SCHEDULE II
EMPLOYEES SAVINGS & STOCK OWNERSHIP PLAN
FORM 5500-ANNUAL RETURN/REPORT OF EMPLOYEE BENEFIT PLAN
ITEM 27a-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES-
INVESTMENT ASSETS BOTH ACQUIRED AND SOLD IN 1996
DECEMBER 31, 1996
- ----------------------------------------------------------------------------------------------
(b)
DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE,
DATE OF INTEREST, COLLATERAL, PAR OR MATURITY VALUE
---------------------------------------------------
(a) PAR OR (c) (d)
IDENTITY OF ISSUE, BORROWER, MATURITY RATE OF MATURITY COST OF PROCEEDS OF
LESSOR, OR SIMILAR PARTY DATE INTEREST COLLATERAL VALUE ACQUISITIONS DISPOSITIONS
- --------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT FUNDS:
LaSALLE NATIONAL TRUST-REMBRANDT
TREASURY MONEY MARKET FUND N/A N/A N/A N/A $18,022,425 $17,850,139
COMMON STOCKS:
AMERICAN TELEPHONE & TELEGRAPH
CORP. (2,300 SHARES) N/A N/A N/A N/A 149,443 122,862
ANGELICA CORP.
(3,900 SHARES) N/A N/A N/A N/A 78,312 82,873
APPLIED MATERIALS, INC.
(10,400 SHARES) N/A N/A N/A N/A 298,665 269,568
BROWNING-FERRIS INDUSTRIES
(7,500 SHARES) N/A N/A N/A N/A 199,350 185,956
COOPER TIRE & RUBBER CO.
(5,200 SHARES) N/A N/A N/A N/A 99,266 99,031
DSC COMMUNICATIONS CORP.
(6,800 SHARES) N/A N/A N/A N/A 155,819 209,945
EXAR CORP.
(5,000 SHARES) N/A N/A N/A N/A 62,800 68,350
HEWLETT-PACKARD CORP.
(3,800 SHARES) N/A N/A N/A N/A 145,778 168,078
ILLINOIS TOOL WORKS
(1,500 SHARES) N/A N/A N/A N/A 95,588 101,314
INTEL CORP.
(2,800 SHARES) N/A N/A N/A N/A 149,450 221,020
IBM CORP.
(1,000 SHARES) N/A N/A N/A N/A 83,600 110,296
LUCENT TECHNOLOGIES
(2,000 SHARES) N/A N/A N/A N/A 54,000 73,588
MOTOROLA
(1,800 SHARES) N/A N/A N/A N/A 101,430 99,303
ADR NOKIA
(4,400 SHARES) N/A N/A N/A N/A 149,402 156,916
RUBBERMAID CORP.
(5,000 SHARES) N/A N/A N/A N/A 130,400 140,870
SILICON GRAPHICS
(7,200 SHARES) N/A N/A N/A N/A 149,076 164,119
TEXAS INSTRUMENTS, INC.
(6,700 SHARES) N/A N/A N/A N/A 297,899 307,154
WAL-MART STORES, INC.
(10,000 SHARES) N/A N/A N/A N/A 225,800 246,692
WMX TECHNOLOGIES, INC.
(3,200 SHARES) N/A N/A N/A N/A 99,056 100,941
UNITED STATES GOVERNMENT OBLIGATIONS:
UNITED STATES TREASURY BILL 11/14/96 4.76% N/A $1,000,000 $987,475 $987,475
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OLD REPUBLIC INTERNATIONAL CORPORATION
EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS for the year
ended December 31, 1996
------------
Dividend/ Face Value
Interest Date of of Amount of Net Gain
Identity of Party or Investment Involved Rate Maturity Transaction Investment Transaction Cost or (Loss)
- ---------------------------------------- --------- -------- ----------- ---------- ----------- ----------- ---------
Purchases of Investments
- ------------------------
Collective Trust-Short-Term N/A N/A VARIOUS $46,897,185 $46,897,185 $46,897,185 -0-
Investment Fund
Rembrandt Treasury Money Market Fund N/A N/A VARIOUS $18,022,425 $18,022,425 $18,022,425 -0-
Sales of Investments
- --------------------
Collective Trust-Short-Term N/A N/A VARIOUS $42,422,099 $42,422,099 $42,422,099 -0-
Investment Fund
Rembrandt Treasury Money Market Fund N/A N/A VARIOUS $17,850,139 $17,850,139 $17,850,139 -0-
Old Republic International
Corporation Common Stock
(544,991 shares) N/A VARIOUS N/A $13,278,558 $ 3,087,038 $10,191,520
Notes:
(A) This schedule lists all transactions or series of transactions which
aggregate in excess of 5% of the Fund assets at the beginning of the
current year, as required by the Department of Labor.
(B) The cost and the current value of asset for purchases of investments are not
presented as they are the same.
31