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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
   
TIME AND DATE                                                                         3:00 P.M., Central Daylight Time, Friday, May 27, 201123, 2014
   
PLACE                                           ��                                                                         
Old Republic Building
22nd Floor Conference Center
307 N. Michigan Avenue
Chicago, Illinois 60601
   
ITEMS OF BUSINESS                                                                         
· To elect four members of the Class 3 Board of Directors, each for a term of three years.
  
· To ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2011.2014.
· To have an advisory vote concerning the Company’s executive compensation.
·To recommend the frequency of having advisory votes concerning executive compensation.
· 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 April 5, 2011.March 28, 2014.
   
ANNUAL REPORT TO SHAREHOLDERS 
Our annual report to shareholders for the year 20102013 is printed together with this proxy statement. The Company’s Forms 10-K, 10-Q and quarterlyother reports to shareholders may be accessed through our Websitewebsite at www.oldrepublic.com or by writing to Investor Relations at the 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 15, 20112014 By Orderorder 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 2012 Annual Meeting
2 
Householding of Proxies
2Shareholder Proposals for the 2015 Annual Meeting
2Other Matters for the Shareholder Meeting
2 
Expenses of Solicitation
23 Principal Holders of Securities
3 
Section 16(a) Beneficial Owners’ and Directors’ and Executive Officers’ Ownership Reporting Compliance
Table
34 Item 1: Election of Directors
4-54 
Nominees and Continuing Directors
5 
Board of Directors’ Recommendation
5Corporate Governance
5
Overview
Continuing Directors
6 
Board of Directors’ Recommendation
6Corporate Governance
6Overview
6Leadership Structure and Risk Management
7 
Board of Directors’ Responsibilities and Independence
89 
Shareholders Communication with the Board
8
Procedures for the Approval of Related Person Transactions
89 The Board and its Committees
8
Board and Committee Membership
8-9
Audit Committee
9 
CompensationBoard and Committee
 Membership
910 
ExecutiveAudit Committee
9-1010 
Compensation Committee
11Executive Committee
11Governance and Nominating Committee
12 Shareholder Communication with the Board
1012 Item 2: Ratification of the Selection of an Independent Registered Public Accounting Firm
10-11
External Audit Services
11
Board of Directors’ Recommendation
11
Audit Committee Report
12 Compensation MattersExternal Audit Services
1213 
Board of Directors’ Recommendation
13Audit Committee Report for 2013
14Compensation Matters
14Compensation Committee Report for 2013
1214 
Compensation Committee Interlocks and Insider Participation
1214 
Directors’ Compensation
1315 
Compensation Discussion and Analysis
1315 
Compensation Philosophy and Objectives
1316 
Executive Performance Considered when Making Compensation Decisions
13-1416 
Elements of Compensation and the Factors and Rationale in Determining Compensation Amounts
14-1517 Summary Compensation Table
1518 
Annual Salary
16
Incentive Awards and Bonuses
16-17
Performance Recognition Plans
17
Nonqualified Deferred Compensation
17
Stock Option Awards
18 
Stock Option Grants
Incentive Awards and Bonuses
18
19
 
Exercises of Stock OptionsPerformance Recognition Plans
18
Equity Compensation Plan StatusBonuses
19 
Nonqualified Deferred Compensation
20Stock Option Awards
20Stock Option Grants and Exercises
20Stock Option Grants
21Exercises of Stock Options
21Equity Compensation Plan Status as of Year End 2013
22Outstanding Equity Awards at Year End 2013
1923 
Pension Plans
Plan and Baseline Security Plan
2024 
Pension Benefits
20-2124 
Employee Savings and Stock Ownership Plan
2125 
Other Benefits
2125 Item 3: Vote on Executive Compensation
2125 
Background
2125 
Proposed Resolution
2013 Executive Compensation Vote
2125 
Vote Required
Proposed Resolution
2225 
Vote Required
26Board of Directors’ Recommendation
2226 Item 4: Frequency of Advisory Vote on Executive CompensationOther Information
2226 
Background
Section 16(a) Beneficial Ownership Reporting Compliance
2226 
Proposed Resolution
22
Vote Required
22
Board of Directors’ Recommendation
22
Change of Control, Severance or Retirement
2326 
Financial Restatement
2326 
Tax Deductibility of Compensation
2326 
Stock Ownership Guidelines

(ii)
 
 
 

Proxy Statement
OLD REPUBLIC INTERNATIONAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
May 27, 2011
23, 2014
GENERAL INFORMATION
GENERAL INFORMATION
 
This proxy statement is being furnished to the shareholders of Old Republic International Corporation, a Delaware insurance holding corporation (together with its subsidiaries, the "Company", “Old Republic” or “ORI”), 307 North Michigan Avenue, Chicago, Illinois 60601, in connection with the solicitation of proxies by its Board of Directors for use at the annual meeting of shareholders to be held on May 27, 201123, 2014 and any adjournments thereof. The approximate date on which this proxy statement and the accompanying proxy are first being sent to the shareholders is April 15, 2011.2014.

The proxy may be revoked at any time before it is voted by written notification addressed to the persons named therein as proxies, and mailed or delivered to the Company at the above address. All shares represented by effective proxies will be voted at the meeting and at any adjournments thereof.

If the enclosed proxy is properly executed and returned in time for voting, the shares represented thereby will be voted as indicated thereon. If no specification is made, the proxy will be voted by the proxy committee for the election of the director nominees named below (or substitutes thereforthereof if any nominees are unable or refuse to serve); for the selection of the Company’s independent registered public accounting firm; for the advisory vote concerning the Company’s executive compensation; for the frequency of having advisory votes concerning executive compensation as recommended by the Board of Directors; and in its discretion upon any other matters which may properly come before the meeting.

The Company has one class of voting stock outstanding, Common Stock, $1.00 par value per share ("Common Stock"). On January 31, 2011March 28, 2014 there were 259,249,515260,546,465 shares of Common Stock outstanding and entitled to one vote each on all matters considered at the meeting. Shareholders of record as of the close of business on April 5, 2011that date are entitled to notice of and to vote at the meeting. There are no cumulative voting rights with respect to the election of directors.

VOTING PROCEDURES
VOTING PROCEDURES

The Company’s Certificate of Incorporation and By-laws do not proscribe any voting procedures. Therefore, the General Corporation Law of the State of Delaware applies to the Company and specifies that unless the corporation's Certificate of Incorporation or By-laws provide otherwise, votes on matters presented at Shareholders’ Meetings are decided as follows: (1) directors are elected by a plurality of the shares present in person or by proxy at the meeting and entitled to vote, (2) amendments to the Company’s Certificate of Incorporation are determined by the affirmative vote of the majority of shares outstanding and entitled to vote, and (3) all other matters are determined by the affirmative vote of the majority of the shares present in person or by proxy at the meeting and entitled to vote. The Company's Certificate of Incorporation and By-laws do not provide for any different treatment. The regulation concerning the frequency of voting on executive compensation matters requires that the shareholders have the ability to select intervalsthe interval for advisory votes on executive compensation. The shareholders of either one year, two years, three years or abstain from voting.the Company recommended at its 2012 meeting and the Board of Directors concurred in having annual votes on executive compensation.

Under Delaware law, the votes at the Company's Annual Shareholders’ Meeting will be counted by the inspectors of election required to be appointed by the Chairman at the meeting. The inspectors are charged with ascertaining the number of shares outstanding, the number of shares present, whether in person or by proxy, and the validity of all proxies. The inspectors are entitled to rule on any voting challenges and are responsible for the tabulation of the voting results.

A quorum for the Company’s Annual Shareholders’ Meeting is one third of the shares outstanding and entitled to vote.vote appearing in person or by proxy at the meeting. Under Delaware law, abstentions are counted in determining the quorum of the meeting and as having voted on any proposal on which an abstention is voted. Therefore, on those proposals which require a plurality vote of the shares at the meeting that are entitled to vote and onin person or by proxy at the vote concerning the frequency of having advisory votes concerning executive compensation,meeting the vote of an abstention has no effect. However, on those proposals which require an affirmative vote of the majority of shares present in person or by proxy at the meeting the vote of an abstention has the effect of a vote against the proposal.

Shares beneficially owned but registered in the name of a broker or bank will be counted for the determination of a quorum for the meeting if there is a discretionary voting item on the meeting agenda within the meaning of section 402.08 of the New York Stock Exchange (“NYSE”) listed company manual. In such cases, ifIf there is a discretionary item on the agenda and the broker or bank does not vote these shares (a “non-vote”), they will not be counted as having voted on the proposal. Therefore, on those proposals which require a plurality or a majority vote of the shares at the meeting that are entitled to vote, a non-vote will have no effect. However, on those proposals which require an affirmative vote of the majority of the shares outstanding who are entitled to vote, a non-vote has the effect of a vote against the proposal. If there are no discretionary voting items on the meeting agenda, shares beneficially held in the name of a broker or bank shall not be counted in determining a quorum. This year Item 2 is the onlya discretionary voting itemitem.
1
Shareholders can simplify their voting and save Old Republic expense by voting by telephone or by Internet. If you vote by telephone or Internet, you need not mail back your proxy card. Telephone and Internet voting information is provided on your proxy card. A Control Number, located on the Company’s agenda.proxy card, is designed to verify your identity and allow you to vote your shares and confirm that your voting instructions have been properly recorded. If your shares are held in the name of a bank or broker, follow the voting instructions on the form you receive from that firm. To revoke a proxy given, or change your vote cast, by telephone or Internet, you must do so by following the directions on your proxy card, provided such changes are made by 12:01 AM, Eastern Daylight Time on May 22, 2014.

SHAREHOLDER PROPOSALS FOR THE 2012 ANNUAL MEETING
HOUSEHOLDING OF PROXIES

The Securities and Exchange Commission (“SEC”) has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for annual reports and proxy statements with respect to two or more shareholders sharing the same address by delivering a single annual report and/or proxy statement addressed to those shareholders. This process, which is commonly referred to as “householding”, potentially provides extra convenience for shareholders and cost savings for companies. The Company and some brokers who distribute annual reports and proxy materials may deliver a single annual report and/or proxy statement to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders.

Once you have received notice from your broker or the Company that your broker or the Company will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. You may request to receive promptly at any time a separate copy of our annual report or proxy statement by sending a written request to the Company at the above address, attention Investor Relations, or by visiting our website, www.oldrepublic.com and downloading this material.

If, at any time, you no longer wish to participate in householding and would prefer to receive a separate annual report and proxy statement in the future, please notify your broker if your shares are held in a brokerage account, or if you hold registered shares, the Company’s transfer agent, Wells Fargo Shareholder Services, P.O. Box 64874, St. Paul, MN 55075, phone number 800-468-9716.

SHAREHOLDER PROPOSALS FOR THE 2015 ANNUAL MEETING

In order for a proposal by a shareholder of the Company to be included in the Company's proxy statement and form of proxy for the 20122015 Annual Meeting of Shareholders, the proposal must be received by the Company no later than 120 days before the anniversary date of the Company’s last proxy statement (December 14)16).

OTHER MATTERS FOR THE SHAREHOLDER MEETING
1
OTHER MATTERS FOR THE SHAREHOLDER MEETING
The Company knows of no matters, other than those referred to herein, which will be presented at the meeting. If, however, any other appropriate business should properly be presented at the meeting, the proxies named in the enclosed form of proxy will vote the proxies in accordance with their best judgment.

EXPENSES OF SOLICITATION
EXPENSES OF SOLICITATION

All expenses incident to the solicitation of proxies by the Company will be paid by the Company. In addition to solicitation by mail, the Company has retained D. F. King & Company of New York City, to assist in the solicitation of proxies. Fees for this solicitation are expected to be approximately $8,500.$9,500. The Company intends to reimburse brokerage houses and other custodians, nominees and fiduciaries for reasonable out-of-pocket expenses incurred in forwarding copies of solicitation material to beneficial owners of Common Stock held of record by such persons. In a limited number of instances, regular employees of the Company may solicit proxies in person or by telephone.
2
PRINCIPAL HOLDERS OF SECURITIES

PRINCIPAL HOLDERS OF SECURITIES
TheThe following tabulation shows with respect to (i) each person who is known to be the beneficial owner of more than 5% of the Common Stock of the Company; (ii) each director and Executive Officer of the Company (including nominees); and (iii) all directors and Executive Officers, as a group: (a) the total number of shares of Common Stock beneficially owned as of March 14, 2011,2014, except as otherwise noted, and (b) the percent of the class of stock so owned as of the same date:

   Amount and     Amount and  
   Nature of Percent   Nature of Percent
 Name of Beneficial Of Name of Beneficial Of
Title of Class Beneficial Owner Ownership Class(*) Beneficial Owner Ownership Class(*)
      
Common Stock FMR LLC 21,319,174(1)8.2 Loomis Sayles & Co., L.P. 26,391,768(1)8.9
Shareholders' beneficial ownership 82 Devonshire Street    
Shareholders’ beneficial ownership One Financial Center    
of more than 5% of the Common Boston, Massachusetts 02109     Boston, Massachusetts 02111    
Stock             
 Franklin Resources, Inc. 18,673,746(1)7.2 BlackRock, Inc. 19,805,784(1)7.6
 One Franklin Parkway     
40 East 52nd Street
    
 San Mateo, California 94403-1906     New York, New York 10022    
            
 Capital Research Global Investors 17,270,244(1)6.7 Capital Research Global Investors 19,271,200(1)7.4
 333 South Hope Street     333 South Hope Street    
 Los Angeles, California 90071     Los Angeles, California 90071    
            
 Old Republic International Corporation 15,446,633(2)6.0 State Street Corporation 16,384,734(1)6.3
 Employees Savings and Stock Ownership     State Street Financial Center    
 Trust     One Lincoln Street    
 307 N. Michigan Avenue     Boston, Massachusetts 02111    
 Chicago, Illinois 60601          
       Old Republic International Corporation 14,009,007(2)5.4
 Black Rock, Inc. 14,188,424(1)5.5 Employees Savings and Stock Ownership    
 
40 East 52nd Street
     Trust    
 New York, New York 10022     307 N. Michigan Avenue    
       Chicago, Illinois 60601    
 Franklin Mutual Advisers LLC 12,836,711(1)5.0      
 101 John F. Kennedy Parkway     The Vanguard Group 13,215,044(1)5.1
 Short Hills, New Jersey 07078-2789     100 Vanguard Blvd.    
 Malvern, Pennsylvania 19355    
      

    Shares Shares Held Other Shares   Percent
  Name of To Stock By Employee Beneficially   Of
Common Stock Beneficial Owner Options(*) Plans(*)(2)(3) Owned(*) Total Class(*)
             
Directors’ and Harrington Bischof - - 20,239 20,239(4)**
Executive Officers’ Jimmy A. Dew - 123,781 737,657 861,438(5)0.3
(including John M. Dixon - - 19,861 19,861 **
nominees) James C. Hellauer - - 36,000 36,000 **
Beneficial James A. Kellogg 211,250 54,555 385,636 651,441 0.2
Ownership Leo E. Knight, Jr. - - 14,500 14,500 **
  Karl W. Mueller 200,125 11,566 8,502 220,193 **
  
R. Scott Rager
Arnold L.Steiner
 
212,225
-
 
58,514
-
 
2,500
826,438
 
273,239
826,438
 
(6)
0.1
0.3
  Fredricka Taubitz - - 19,000 19,000 **
  Charles F. Titterton - - 21,587 21,587(7)**
  Dennis Van Mieghem - - 15,800 15,800(8)**
  Steven R. Walker - - 42,500 42,500(9)**
  Rande K. Yeager 115,575 30,031 9,688 155,294 **
  Aldo C. Zucaro 662,000 503,892 1,230,500 2,396,392 0.9
             
  Directors and Executive 1,488,900 832,344 3,407,248 5,728,492 2.2
  Officers, as a group (16)          
             
    Shares Shares Held by Other Shares   Percent
  Name of Subject to Employee Beneficially   Of
Common Stock Beneficial Owner Stock Options(*) Plans(*)(2)(3) Owned(*)(4) Total Class(*)
Directors’ and Harrington Bischof - - 33,260 33,260(5)**
Executive Officers’ Jimmy A. Dew 385,000 196,801 661,337 1,243,138(6)0.5
(including John M. Dixon - - 18,964 18,964 **
nominees) James C. Hellauer -     -     23,955 23,955  **
beneficial James A. Kellogg 198,875 44,431 388,462 631,768 0.2
ownership Leo E. Knight, Jr. - - 23,181 23,181 **
  Karl W. Mueller 128,350 6,262 6,439 140,907 **
  Christopher S. Nard 440,675 11,257 24,170 476,102 0.2
  R. Scott Rager 176,125 41,428 2,670 220,223 0.1
  William A. Simpson 475,625 - 548,040 1,023,665(7)0.4
  Arnold L. Steiner - - 826,438 826,438(8)0.3
  Fredricka Taubitz - - 22,681 22,681 **
  Charles  F. Titterton - - 23,187 23,187(9)**
  Dennis Van Mieghem - - 14,050 14,050(10)**
  Steven R. Walker - - 34,340 34,340(11)**
  Rande K. Yeager 85,563 23,460 9,688 118,711 **
  Aldo C. Zucaro 1,545,000 418,990 1,068,101 3,032,091 1.1
             
  Directors and Executive          
  Officers, as a group (18) 3,515,788 783,253 3,744,581 8,043,622 3.1
2

*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. None of the options shown for Executive Officers were exercised prior to the Company’s record date and therefore are not eligible to vote at the Annual Shareholders’ Meeting. The optionsoption shares that lapsed without value on March 21, 20119, 2014 are excluded.
 ****Less than one-tenth of one percent.
3
(1)Reflects the number of shares shown in the most recent Schedule 13G filings with the Securities and Exchange CommissionSEC through February 15, 2011. FMR LLC reports:2014. Loomis Sayles & Co., L.P. (“Loomis”) filed its report because it has thewould have sole voting power to vote 4,726,346 shares and no shared voting power as well as sole dispositive power for 21,319,17426,083,473 and no shared dispositive power; Franklin Resources, Inc. reports: Franklin Advisory Services, LLC has sole voting6,127 shares, respectively, and sole dispositive power for 17,885,962 and 18,072,56226,391,768 shares respectively, Franklin Templeton Portfolio Advisors has sole voting and dispositive power for 572,707 shares, the remaining voting and dispositive power rest with other Franklin affiliates and there is no shared voting or dispositive power outside the group; Capital Research Global Investors reports:if it is an investment adviser and has no voting or dispositive power concerning these shares, further, 985,244converted its ownership of the shares reported assume the conversion of the Company’s 8%Old Republic’s 3.75% Convertible Senior Notes due in 2012; Black Rock,March 15, 2018.  However, these Notes were not converted to Common Stock prior to the Company’s record date of March 28, 2014.  Therefore, Loomis will not be eligible to vote these shares at the Company’s Annual Shareholders’ Meeting on May 23, 2014.  BlackRock, Inc. reports sole voting for 18,765,482 shares and sole dispositive power for all shares shown.  Capital Research Global Investors reports it has sole voting and dispositive power for all shares reported; Franklin Mutual Advisers LLCshown.  Street Corporation reports it has no sole voting or dispositive power but shared voting and dispositive power for all shares reported.shown.  The Vanguard Group has sole voting and sole dispositive power for 155,029 and 13,078,915 shares, respectively, and shared dispositive power for 136,129 shares.
(2)Reflects the number of shares held as of December 31, 2010.2013. 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 have 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 sole invest­ment power with respect to unallocated stock and shared power for allocated stock held by the ESSOP. The Executive Committee is composed of Messrs. Bischof, Dixon, Knight, Steiner, Walker and Zucaro. TheAs of December 31, 2013, the Trustees for the Trust established by the ESSOP arewere Messrs. LeRoy, Mueller, Rager and Zucaro. In addition to the ESSOP, the Old Republic International Employees Retirement Plan and two other(under which all the retirement plans ofplan shares for all subsidiaries holdare now held) holds an aggregate of 2,280,0002,829,509 shares of the Company’s stock, not included in this table, for which thetable. The voting of these shares is controlled, directly or indirectly in a fiduciary capacity, by the Executive Committee. Also, American Business & Personal Insurance Mutual, Inc. (ABPIM)The trustees of the Bituminous 401(k) Savings Plan, the Great West Casualty Company Profit Sharing Plan and its subsidiary Inter Capital Group, Inc.the PMA Companies Retirement Savings Plan, all of which were combined into the Company’s Baseline Security Plan (BSP) on January 1, 2014, own 2,132,873an aggregate of 973,128 shares of the Company’sCompany stock which are not included in this table. ABPIM’s directors and senior officers are also Executive Officers of the Company.
­(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.ESSOP. 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. IncludesThese numbers include shares of the Company’s stock held by the RMIC Profit Sharing Plan for Mr. Dew and shares of the Company’s stock held by the Great West Casualty Corporation Profit Sharing Plan for Mr. Rager.
(4)Includes the number of shares of Common Stock that the following listed persons would receive upon converting their holdings of the Company’s 8% Senior Notes. Mr. Bischof – 13,021; Mr. Dew – 17,361; Mr. Dixon – 2,170; Mr. Kellogg – 8,681; Mr. Knight – 8,681; Mr. Mueller – 2,064; Mr. Nard – 2,170; Mr. Rager – 2,170; Mr. Simpson – 26,042; Ms. Taubitz – 8,681; Mr. Titterton – 1,910; Mr. Walker – 4,340; Mr. Zucaro – 13,021.
(5)Includes 8,437 shares held in an IRA trust for Mr. Bischof’s benefit.
(6)(5)Includes 209,471 shares owned by Mr. Dew's wife.
(7)Includes 134,648 shares owned by Mr. Simpson's wife and 40,792 shares held in an IRA trust for Mr. Simpson’s benefit.
(8)(6)Includes 270,237 shares owned by Mr. Steiner directly, 465,000 shares held in trust for Mr. Steiner's children, for whichwhom he is a co-trustee, and 91,201 shares held by the Steiner Foundation for which Mr. Steiner disclaims beneficial ownership.
(9)(7)Includes 5,0795,549 shares held in IRA and SEP-IRA trusts for Mr. Titterton’s benefit.
(10)(8)Includes 1,250 shares owned by Mr. Van Mieghem’s wife and 6,1259,125 shares held in an IRA trust for Mr. Van Mieghem’s benefit.
(11)(9)Includes 17,92522,500 shares held in IRA and SEP-IRA trusts for Mr. Walker’s benefit and 9,00016,000 shares held by his wife.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s Executive Officers and directors, and persons who own more than ten percent of the Company’s Common Stock, to file reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”). Based solely on reports and other information submitted by Executive Officers, directors and such other persons required to file, the Company believes that during the year ended December 31, 2010 all reports required by Section 16(a) have been properly filed.

ITEM 1
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS

The following table lists all nominees and continuing directors of the Company. Four Class 3 directors are to be elected to hold office for a term of three years and until their successors are elected and qualified. Shortly before the date of this Proxy Statement, Mr. William Simpson, a Class 3 directorAll of the Company advised the Chairman and Board of Directors that after 31 years of association with the Company, he was retiring from the Board at the end of his current term and would not stand for re-election at the Annual Meeting of Shareholders on May 27th. Mr. James C. Hellauer, formerly an independent director of PMA Capital Corporation (“PMA”) prior to its merger with the Company, was selected as a nominee to serve as a Class 3 Director of the Company. This choice was made in accordance with the terms of the Merger Agreement with PMA which required an independent director of PMA to be nominated to ORI’s board. The Governance and Nominating committee in consultation with the Company’s Chairman of the Board and Chief Executive Officer selected Mr. Hellauer as this independent nominee and the Company’s Board of Directors has approved this selection. No third party was involved in the recruitment or selection of Mr. Hellauer as a nominee and no fee was paid to any individual or entity in connection with his selection. With the exception of Mr. Hellauer, all of the other nominees are current directors standing for re-election. It is intended that, in the absence of contrary specifications, votes will be cast pursuant to the enclosed proxies for the election of such nominees. Should any of the nominees become unable or unwilling to accept nomination or election, it is intended, in the absence of contrary specifications, that the proxies will be voted for the balance of those named and for a substitute nominee or nominees. However, the Company does not expect such an occurrence. All of the nominees have consented to be slated and to serve as directors if elected.

3
Given the reasons and background information cited next to each director’s name below, the Board of Directors believes that each of the nominees and its other members are eminently qualified to serve Old Republic’s shareholders and other stakeholders.

    Positions with Company, Business Experience and
Name Age Qualifications
     
Nominees for Election    
     
CLASS 3 (Term expires in 2011)2014)
    
     
James C. Hellauer 72
75
 Director since 2011. Prior to October 2010, a director since 2005 of PMA Capital Corporation (PMA)(“PMA”); owner of James C. Hellauer and Associates. From 1997 to 1999, Chief Executive Officer of Environmental Technologies Corporation. From 1994 to 2007, executive director of the Colmen Group. Currently a founder and director of Tasty Baking Company and East River Bank. His qualifications include a significant general business background as well as specific experience and knowledge concerning the business of PMA and its risk factors.
     
Arnold L. Steiner 7376 
Director since 1974. Retired for more than five years from Steiner Bank, Birmingham, Alabama of which he was President and a substantial owner. He brings long and significant experience in financial businesses and has extensive knowledge of the Company and its risk factors.
4
Fredricka Taubitz 6770 Director since 2003. A CPA by training, she was until 2000 Executive Vice President and Chief Financial Officer of Zenith National Insurance Corp. Until 1985, she had beenwas a Partnerpartner with the accounting firm of Coopers & Lybrand (now PricewaterhouseCoopers LLP). During her long professional career she has gained significant experience in, and knowledge of, the business and the risk factors associated with the insurance industry.
     
Aldo C. Zucaro 7275 Director since 1976. Chairman of the Board and Chief Executive Officer of the Company and various subsidiaries for more than five years.since 1996. A CPA by training, he brings a significant background as a former insurance specialist partner with Coopers & Lybrand (now PricewaterhouseCoopers LLP), and long termlong-term experience with the insurance industry in general, and the Company in particular since 1970.
     
     
Continuing Members    
     
CLASS 1 (Term(Term expires in 2012)2015)
    
     
Harrington Bischof 7679 Director since 1997.  President of Pandora Capital Corporation since 1996.  Formerly Senior Advisor with Prudential Securities, Inc. and prior to that, a Seniorsenior investment banker with the firms of Merrill, Lynch & Co. and White, Weld & Co.  His longexperience in business, investment banking, and international finance experience are of significant value to the Corporation’sCompany’s Corporate governance.
     
Leo E. Knight, Jr. 6568 Director of ORI since 2006, and of several Old Republic subsidiaries since 1999.  A CPA by training, he retired in 2006 as Chairman and Chief Executive Officer of National City Mortgage Company, Dayton, Ohio, following a thirty-two year career.  He brings significant business experience in mortgage lending and the mortgage insurance industry and their risk factors to Old Republic’s Board.
     
Charles F. Titterton 6972 Director since 2004.  Formerly Director -– Insurance Group with Standard & Poor’s Corp. until 2003.  He brings significant business experience and knowledge of the risk factors connected with the insurance industry by virtue of a long career as a lending officer with a major banking institution and with the aforementioned rating agency.
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Steven R. Walker  6669 Director since 2006.  Formerly Senior Counsel and Partner with Leland, Parachini, Steinberg, Matzger & Melnick, LLP, attorneys, San Francisco, California.  He brings significant experience to Old Republic’s Board as both an attorney and a business manager during a long career focused on the title insurance industry.
     
Continuing Members    
CLASS 2 (Term(Term expires in 2013)2016)
    
     
Jimmy A. Dew 7073 Director since 1980. Formerly Vice Chairman of Old Republic’s subsidiary, Republic Mortgage Insurance Company (“RMIC”), of which he was a co-founder in 1973. His knowledge of RMIC gained in an executive capacity since its founding and his long service on Old Republic’s board make him fully conversant with the insurance industry and its risk factors.
     
John M. Dixon 7174 Director since 2003. Formerly Chief Executive Partner with the law firm of Chapman and Cutler, Chicago, Illinois until his retirement in 2002. His qualifications include his extensive background as an attorney and his knowledge of corporate law and the risk factors of corporations like the Company.
     
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Dennis P. Van Mieghem 7073 Director since 2004. A CPA by training, he was the Partner in charge of the National Insurance Tax Practice of the accounting firm of KPMG LLP until his retirement in 1998.1998 retirement. With this background he brings significant experience and knowledge of the insurance industry and its risk factors to service on Old Republic’s Board.

BOARD OF DIRECTORS’ RECOMMENDATION

The Board of Directors recommends a vote FOR the Class 3 directors listed above as nominees. Proxies solicited by the Board of Directors will be voted forin favor of the election of these nominees unless shareholders specify to the contrary.

CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
 
OVERVIEW
OVERVIEW

Old Republic is organized as an independent, for-profit insurance enterprise managed for the long run. Our Mission is to provide quality insurance security and related services to businesses, individuals, and public institutions and to be a dependable long-term steward of the trust our policyholders and shareholders place in us. The Company’s governance and operations are guided by this Mission and the inherent public interest vested in the risk taking nature of its business. Its governance is therefore alignedendeavors to align this Mission with thisthe substance of theits business, withgiving due appreciation and regard for its threethe Company’s most important assets:

·  The investors’ capital which enables and underpins the insurance risk taking;
·  The intellectual capital, know-how, and business relationships possessed by employees at various levels of the enterprise; and
·  The Company’s good name and reputation, cultivated over its 87-plus90-plus year history, and the even longer history of some of its major insurance subsidiaries.

Information appearing on the Company’s website is not incorporated by reference in this proxy statement. However itsthe Corporate Governance Guidelines, Code of Ethics for the Principal Executive Officer and Senior Financial Officers, and itsthe Code of Business Conduct and Ethics, are accessible on theits website at www.oldrepublic.com. Printed copies of these documents are also available to shareholders upon request to the Investor Relations Department at the Company’s Office.office.

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LEADERSHIP STRUCTURE AND RISK MANAGEMENT
LEADERSHIP STRUCTURE AND RISK MANAGEMENT

The Company’s leadership structure and its risk management processes are overseen and monitored by the Board of Directors. The details of this leadership structure and the development of management talent have been the primary responsibilityresponsibilities of the Board’s Executive Committee for many decades. This fivesix member committee is currently composed of the Company’s Chairman of the Board (Chairman)(“Chairman”) and Chief Executive Officer (CEO)(“CEO”), and fourfive independent directors, including the Lead Director. The Board of Directors and its Executive Committee believe that the Company’s decades-long joining of the Chairman and CEO positions is best suited to ensuring the long termlong-term value, stability and management of the threeits most important assets necessary for the accomplishment of its Mission. Old Republic’s Board holds management singularly accountable for protecting and enhancing the value of these and all other assets. It therefore holds its CEO responsible for setting the proper tone in shaping and nurturing the institution’s culture and values not solely in the shareholders’ interests, but in those of its important stakeholders as well. Most critically, these include the policyholders to whom long-term promises of financial indemnity and stability are made by the Company’s insurance subsidiaries, the employees who possess the intellectual capital and business relationships necessary for the conduct and success of the Company, the debt holders who extend a portion of the capital at risk, and the regulators who are charged with protecting the public interest vested in the Company’s insurance enterprise.enterprises. To meet these responsibilities and objectives, the Board expects the CEO to be a knowledgeable and well roundedwell-rounded leader who, as chief enterprise risk manager, is fully dedicated to Old Republic’s overall Mission and is best qualified to address and balance the interests of all major stakeholders.

In the Board’s sole discretion, the Chairman and CEO positions may be separated and assigned to two individuals with extensive and complementary operating knowledge of the Company. Under the Board’s longlong- standing corporate governance philosophy, this separation is intended to be temporary and to occur in unusual circumstances or during transitionsthe transition of management authority.

While the Board has determined that the advantages of a joint Chairman and CEO position outweigh the theoretical benefits of a separated leadership structure, it has in the past few years formalized the establishment ofdid establish a Lead Director position.position over ten years ago. In Old Republic’s practice, the Lead Director is appointed from among the independent directors and serves as that group’s liaison to the Chairman and CEO, in addition to acting as the liaison provided byto the Executive Committee’s four independent directors.Committee. In his or her capacity, the Lead Director may preside at Board meetings in the Chairman’s absence, provide input to meeting agendas of the full Board or the meetings of independent directors, and act as liaison among various committees’ chairmen in the resolution of inter-committee governance applicationsissues that may arise from time to time.

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Old Republic’s multi-faceted business is managed through a relatively flat, non-bureaucratic organizational structure. The CEO has primary responsibility for managing enterprise-wide risk exposures. The Company avoids management by committee and other organizational impediments to the free flow of information and to effective decision making. Long establishedLong-established control processes are in place, and a variety of other accepted methods are utilized to coordinate system-wide risk taking and risk management objectives. These methods and processes are centered aroundbased on three major functions: lines of business responsibility, enterprise functions, and internal audit and peer reviews.

·  Lines of business responsibility,
·  Enterprise functions, and
·  Internal audit and peer reviews.

The lines of business operationsoperation managers are responsible for identifying, monitoring, quantifying, and mitigating all insurance underwriting risks falling within their areas of responsibility. Lines of businessThese managers use reports covering annual, quarterly or monthly time frames to identify the status and content of insured risk, including pricing or underwriting changes. These management reports ensure the continuity and timeliness of appropriate risk management monitoring, and enterprise-wide oversight of existing or emerging issues.

The enterprise functions incorporate system-wide risk management, including asset/liability and underwriting exposure correlation controls, regulatory and public interest compliance, finance, actuarial, and legal functions. These functions are both independent of the lines of business and are coordinated on an enterprise-wide basis by the CEO.

The internal audit, as well as related underwriting and claims management peer review functions and processes, provide reasonably independent assessments of management and internal control systems. Internal audit activities are intended to give reasonable assurance that resources are adequately protected;protected and that significant financial, managerial and operating information is materially complete, accurate and reliable; andreliable. This process is intended to ensure that associates’ actions are in compliance with corporate policies, standards, procedures, internal control guidelines, and applicable laws and regulations.

CorporateThe corporate culture, and the actions of all our associates, and the continuity of their employment are most critical to the Company’s risk management processes. The Company’s Code of Business Conduct and Ethics provides a framework for all senior managers and employees to conduct themselves with the highest integrity in the delivery of the Company’s services to its customers and in connection with all Company relationships and activities.

The Compensation Committee, at the direction of the Board, has reviewed the Company’s compensation policies and practices and has concluded that they do not encourage the Company’s senior executives or employees to take unnecessary or excessive risks that could adversely affect the Company.


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THE BOARD OF DIRECTORS’ RESPONSIBILITIES AND INDEPENDENCE
BOARD OF DIRECTORS' RESPONSIBILITIES AND INDEPENDENCE

The Board of Directors’ main responsibility is to oversee the Company’s operations. Directlyoperations, directly and through several committees operating cohesively,cohesively. In exercising this responsibility, each director is expected to utilize his or her business judgment in a manner reasonably believed to be in the Board is charged withbest interests of the followingCompany and its shareholders. The Board’s oversight duties:duties are to:

·  Ascertain that strategies and policies are in place to encourage the growth of consolidated earnings and shareholdersshareholders’ equity over the long haul, while increasing the Company’s regular dividend payout;
·  Ascertain that the Company’s business is managed in a sound and conservative manner that takes into account the public interest vested in its insurance subsidiaries;
·  Provide advice and counsel to management on business opportunities and strategies;
·  Review and approve major corporate transactions;
·  Monitor the adequacy of the Company’s internal control and financial reporting systems and practices to safeguard assets and to comply with applicable laws and regulations;
·  Ascertain that appropriate policies and practices are in place for managing the identified risks faced by the enterprise;
·  Evaluate periodically the performance of the Chairman and Chief Executive Officer in the context of the Company’s Mission and performance metrics;
·  Review and approve senior management’s base and incentive compensation taking into account the business’ performance gauged by its return on equity and growth of operating earnings;
·  Review periodicallyPeriodically review senior management development and succession plans both at corporate and operating subsidiary levels;
·  Select and recommend for shareholder election by the shareholders candidates deemed qualified for Board service; and
·  Select and retain independent registered public accounting firms for the principal purpose of expressing their opinion on the annual financial statements and internal controls over financial reporting of the Company and its subsidiaries;
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·  Act as the Board of Directors of the Company’s significant insurance company subsidiaries; and
·  Monitor, review and approve the operations and major policy decisions of the Company’s insurance subsidiaries.

In considering the qualifications and independence of Board members and candidates, the Board of Directors, through the Governance and Nominating Committee, seeks to identify individuals who, at a minimum:

·  Satisfy the requirements for director independence;independence, as set out in the Company’s Corporate Governance Guidelines, in the Listed Company Standards of the NYSE, and in the regulations of the SEC;
·  Are, or have been, senior executives of businesses or professional organizations; and
·  Have significant business, financial, accounting and/or legal backgrounds useful to the Company’s operations, markets and customer services.

Additionally, the Board seeks to retain and attract members possessing certain critical personal characteristics, most importantly, (i) intelligence, honesty, good judgment, high ethics and standards of integrity, fairness and responsibility, (ii) respect within the candidate’s social, business and professional community for his or her integrity, ethics, principles and insights; (ii)(iii) demonstrated analytic ability; and (iii)(iv) ability and initiative to frame insightful questions, to challenge questionable assumptions collegially, and to disagree in a constructive fashion, as appropriate.

The Company’s insurance business is conducted through three insurance segments which, in the aggregate, are broadly diversified as to the types of coveragesinsurance coverage and services provided. Each of the segments’Company’s insurance subsidiaries is highly regulated by state and federal governmental agencies as to its capital requirements, financial leverage, business conduct, and accounting and financial reporting practices. InNew directors receive a broad array of information upon becoming a member of the Board in order to familiarize themselves with the Company’s business, strategic plans, significant financial, accounting and management issues, compliance programs, conflicts policies, Code of Business Conduct and Ethics, Corporate Governance Guidelines, principal officers and independent registered public accounting firm. Further, the Company supports directors taking advantage of and attending director education programs whenever convenient and appropriate. Even with such assistance and in part as the result of the specialized nature of itsthe Company’s businesses and their regulation, it is the Company’s view that at least two to four years are typically required for a new director to develop sufficient knowledge of the company’s business to become a fully productive and effective contributor to the Company’s governance. Reflecting this, each director is expected to serve two or more three-year terms on the Company’s classified Board, that of one or more of its key insurance subsidiaries, and on one or more Board committees.

The commitment of a substantial expenditureamount of time for meetings, preparation therefor,thereof, and related travel is essential to the performance of a director’s responsibilities. As such, each director is expected to regularly prepare for and attend the meetings of the Board and each committee on which he or she serves. Owing to the risk takingrisk-taking nature of much of the Company’s business, a demonstrated long-term orientation in a Board member’s business dealings and thought process is considered very important.

The Company’s Board of Directors has been classified into three classes for severalmany decades. Excepting the possibility of uneven distribution among the classes, one-third of the Board is therefore elected annually. This organizational structure is intended to promote continuity and stability of strategy and business direction for the best long-term interests of investors in the Corporation’s securities, the confidence of insurance subsidiaries’ policyholders, and the long-term expectations of other stakeholders.
 
EightNine of the Company’s current directors and Mr. Hellauer have been affirmatively determined to qualify as “independent” directors in accordance with Section 303A.02 of the Listed Company Standards of the New York Stock Exchange (“NYSE”)NYSE, Rule 10C-1 and item 407 (a) of Regulation S-K of the SEC. Neither they nor any members of their immediate families had any of the types of disqualifying relationships with the Company or any of its subsidiaries during 20102013 or the two years prior to that, as set forth in subsection (b) of Section 303A.02 of the NYSE’s Corporate GovernanceListed Company Standards. The independent directors, who are listed below, selected from among themselves a Lead Director and met on a regular basis during 20102013 in executive sessions without management present. The Lead Director is nominated by the Governance and Nominating Committee and elected annually by the independent directors. Arnold L. Steiner was Lead Director for 20102013 and continues as such through the date of this proxy statement. The entire Board and each of its standing Committees conduct an annual self-evaluation which includes a determination of each member’s independence.

Membership on the Company’s Audit, Compensation, and Governance and Nominating Committees consists exclusively of independent directors. The members, chairpersons and vice-chairpersons of these committees are recommended each year to the Board by the Governance and Nominating Committee in consultation with the Executive Committee. Each of the three committees has the authority and funding to retain independent advisors or counsel as necessary and appropriate in the fulfillment of its duties. The chairpersons set the agenda of their respective committees’ meetings consulting, as necessary and appropriate, with the Chairman and CEO. All directors have full and free access to the Company’s management.
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Shareholders Communication with the Board

Shareholders of the Company and other interested parties may communicate with the Lead Director, the independent directors, the Board of Directors as a whole, or with any individual director. The communications must be in writing and sent to Old Republic International Corporation, c/o Secretary, 307 N. Michigan Ave, Chicago, IL 60601. The Secretary will promptly forward the communications to the intended recipient.

PROCEDURES FOR THE APPROVAL OF RELATED PERSON TRANSACTIONS
PROCEDURES FOR THE APPROVAL OF RELATED PERSON TRANSACTIONS

In addition to a Code of Business Conduct and Ethics and a Code of Ethics for the Principal Executive Officer and Senior Financial Officers, Old Republic also has a conflict of interest policy which is circulated annually and acknowledged by all directors, officers and key employees of the Company and its subsidiaries. This policy states that no director, officer, or employee of the Company or its subsidiaries may acquire or retain any interest that conflicts with the interest of the Company. This includes direct or indirect interests in entities doing business with the Company or its subsidiaries. If such a conflict occurs, the director, officer or employee is required to make a written disclosure of the conflict to the Company.

The directors, officers and affected employees are required to notify the Company of the actual or potential existence of a related party transaction, as defined by the Listed Company Standards of the NYSE and the SEC rules. Directors are required to notify the Chairman of the Board, unless the Chairman is an affected director, in which case he or she is required to notify the Lead Director. Executive Officers are required to notify the CEO, unless the CEO is the affected executive, in which case he or she is required to notify the Chairman or Lead Director, as appropriate. Under the procedures, the CEO, Chairman or Lead Director, as applicable, must conduct a preliminary inquiry into the facts relating to any existing or potential related party transaction. If, based upon the inquiry and the advice of legal counsel, the CEO, Chairman or Lead Director, as applicable, believes that an actual or potential related party transaction exists, then he or she is required to notify the entire Board. In turn, the Board is required to conduct a full inquiry into the facts and circumstances concerning a conflicted transaction and to determine the appropriate actions, if any, for the Company to take. Any director who is the subject of an existing or potential related party transaction will not participate in the decision-making process of the Board relating to what actions, if any, shall be taken by the Company with respect to such transaction.

THE BOARD AND ITS COMMITTEES

The Board of Directors met fivefour times, once each quarter, and participated in fouran interim telephone meetingsmeeting in 2010.2013. Each incumbent director attended at least 75% of the aggregate of the meetings of the Board and committees on which each served. The Company does not require its Board of Directors to attend annual meetings of its shareholders. Theshareholders, as such meetings are conducted by the Chairman of the Board and Chief Executive Officer who is the designated spokesperson for the Corporation and represents the entire Board of Directors for these and other purposes.

THE BOARD AND ITS COMMITTEES

The following table shows the membership in the Board of Directors and its committees.committees at year end 2013 and as of the date of this proxy statement.

BOARD AND COMMITTEE MEMBERSHIP (as of April 5, 2011)
BOARD AND COMMITTEE MEMBERSHIP
   Committees
     Governance 
 IndependentOther  and 
DirectorDirectors(a)Directors(b)ExecutiveAuditNominatingCompensation
Harrington Bischof
X
 
X
 
X
X
Jimmy A. Dew 
X
    
John M. Dixon
X
 
X
 
X
X(c)
James C. Hellauer
X
  
X(e)
X
 
Leo E. Knight, Jr.
X
 
X
X(d)(e)
 
X
Arnold L. Steiner
X(f)
 
X
 
X
X
Fredricka Taubitz
X
  
X(c)(e)
 
X
Charles F. Titterton
X
  
X(e)
X(c)
 
Dennis P. Van Mieghem
X
  
X(d)(e)
 
X(d)
Steven R. Walker
X
 
X
X
X(d)
 
Aldo C. Zucaro 
X
X(c)
   
Number of scheduled and special meetings
4
4
5
        5       4        3
Number of written consents and telephone
 meetings
 
1
 
1
 
1
 
       2
 
       -
 
       -
   Committee Membership
               Governance 
           Independent     Other            and 
Director          Directors(a)     Directors(b)ExecutiveAudit          Nominating          Compensation
Harrington Bischof           X X         X           X
Jimmy A. Dew        X    
John M. Dixon           X X                 X           X(c)
Leo E. Knight, Jr.           X XX(d)(e)           X
William A. Simpson        X    
Arnold L. Steiner           X(f) X                  X           X
Fredricka Taubitz           X  X(c)(e)           X
Charles F. Titterton           X  X(e)        X(c) 
Dennis P. Van Mieghem           X  X(d)(e)           X(d)
Steven R. Walker           X  X        X(d)           X
Aldo C. Zucaro        X    X(c)   
Number of  scheduled meetings during 2010            5       455                5           4
Number of written consents and telephone
 meetings during 2010
            6                   2   23                -           -

(a)      Independent directorDirector as that term is defined in SEC Rules and the Listed Company Standards of the NYSE.  (b) The Other Director classification includes all directors who are members of management, or do not currently meet the standard indicated in (a) above. (c)  ChairmanChairman. (d) Vice-ChairmanVice-Chairman. (e) Financial Experts as that term is defined in SEC Regulation S-K. (f) Lead Director.

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The Audit Committeeis organized to monitorassist the Board in monitoring: (1) the integrity of the Company’s financial statements and the effectiveness of the Company’s internal controls over financial reporting, its(2) the Company’s compliance with legal and regulatory requirements, (3) the qualifications and independence of the registered public accounting firm, and (4) the qualifications and performance of the Company’s internal auditors andaudit function.  Further, it is charged with preparing the annual report required by SEC rules to appoint, compensate, retain and overseebe included in the Company’s independent registered public accounting firm.proxy statement (which is printed below), and serving as the audit committee of each of the Company’s regulated insurance subsidiaries to the extent required by the National Association of Insurance Commissioners’ Model Audit Rule.  It operates pursuant to a written charter approved each year by the Board of Directors and performs an annual self-evaluation, and is required to annually make a report which is printed below.self-evaluation. While information appearing on the Company’s website is not incorporated by reference in this proxy statement, the Committee’s charter may be viewed at www.oldrepublic.com. Printed copies are available to shareholders upon request.

The Audit Committee held five meetings during 2013 and had two telephonic conference calls with the Company’s independent registered public accounting firm and management, four of which were held prior to the Company’s filing of quarterly reports on SEC Form 10-Q and its annual report on SEC Form 10-K.

Each Audit Committee member has been affirmatively determined to qualify as “independent”, in accordance with the SEC’sSEC Rule 10A-3(b)(1) and the NYSE’s Listed Company Standards. FourFive members of the Committee are deemed to qualify as audit committee financial experts, as that term is defined in SEC Regulation S-K. No member served on the audit committees of three or more unrelated publicly held companies. The current members of the Audit Committee are as follows:

Audit Committee
    James C. Hellauer
Leo E. Knight, Jr., Vice-Chairman
Fredricka Taubitz, Chairman
Charles F. Titterton
Dennis P. Van Mieghem, Vice-Chairman
Steven R. Walker

The Audit Committee held five meetings during 2010. In addition, there were three telephone conference calls held with the Company’s independent registered public accounting firm and management prior to the Company’s filing of quarterly reports on SEC Form 10-Q.

The Compensation Committee assistsis responsible for: (1) evaluating the Board in fulfilling its responsibility forCEO’s performance and setting Compensation (“Compensation” meaning annual salary, bonus, incentive and equity compensation), (2) reviewing and approving, with input from the oversightCEO and President of the Company’s benefit plans, evaluatingCompany, the performanceevaluation and Compensation of the Company’s CEO and other Executive Officers (collectively,and senior executives of the “Executive Officers”), fixing their annual salaries, approvingCompany and its subsidiaries, (3) reviewing and advising on general levels of Compensation of other employees, (4) reviewing the Company’s pension, incentive compensation and stock option plans, and awards, and reviewing and evaluating any other compensation or benefits. The Committee consults with(5) preparing the CEO and President asannual report required by SEC rules to the performance, compensation and awards ofbe included in the Company’s proxy statement (which is printed below), (6) retaining consultants, independent legal counsel or other key employees.advisers, and (7) taking any action as necessary to perform its functions.  The Committee is also responsible for reviewing directors’ compensation and subjects itself to an annual performance self-evaluation. The Committee is required to annually produce a report which is printed below.

Each member of the Committee has been affirmatively determined to qualify as “independent” in the judgment of the Company’s Board of Directors and according to the Listed Company Standards of the NYSE and the SEC rules. The Board of Directors considered all factors specifically relevant to determining whether Committee members have any relationships which would be material to the member’s ability to be independent. The Committee has the sole discretion and adequate funding to retain the services of a compensation consultant, legal counsel and other advisors that will be directly responsible to the Committee. The independence of such consultants, counsels or advisors, which is required by the NYSE’s Listed Company Standards and SEC Rule 10C-1, are taken into consideration when they are selected. Inquiries into any possible conflicts of interest are made when such persons are retained and annually thereafter, if their services are continued. As part of its function, the Committee has previously retainedthe ability to retain an independent compensation consultant, and in 2012 retained Frederic W. Cook & Co., Inc., to review the Company’s compensation programs and its procedures for settingaligning compensation for the Company’s Executive Officers. The consultant’s review included a comparison of the compensation and benefit programs of companies similar in size, operation and organization asto the Company, including a review of a peer group of companies determined by the Committee to be appropriate for comparison. The Committee consulted with the compensation consultant during 2009 and 2010. The consultant performed no other work for the Company or any of its subsidiaries and played no role in recommending the amount and form of compensation for the Executive Officers or directors of the Company.Company and is considered independent according to SEC Rule 10C-1 and the requirements of the Dodd-Frank Act. All compensation recommendations are made solely by the Compensation Committee following consultation with the CEO and the President regarding the Company’s Executive Officers (other than the CEO and the President) and other senior members of the Company’s management.

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The Committee is composed of sevensix directors and operates pursuant to a written charter approved each year by the Board of Directors. While information appearing on the Company’s website is not incorporated by reference in this proxy statement, the Committee’s charter may be viewed on the Company’s website at www.oldrepublic.com. Printed copies are available to shareholders upon request. The current members of the Compensation Committee are as follows:

Compensation Committee
Harrington BischofJohn M. Dixon, Chairman
Leo E. Knight, Jr.Arnold L. Steiner
Fredricka TaubitzDennis P. Van Mieghem, Vice-Chairman
Steven R. Walker

The Executive Committee is empowered to exercise the Board of Directors’ authority between scheduled meetings, except as provided in the By-laws or otherwise limited by the provisions of the General Corporation Law of the State of Delaware. The Committee operates pursuant to a written charter.charter and performs an annual self-evaluation. It is authorized to evaluate the performance of the CEO, the Executive Officers and other senior members ofto: (1)  act as the Company’s management, toFinance Committee and review and approve the Company’s investment policy, topolicies, (2) review and approve the Company’s dividend and capitalization policies, to(3) monitor the Company’s enterprise risk management and tomanagement¸ (4) analyze potential acquisitions or divestitures by the Company or its subsidiaries, (5) annually review and evaluate management development and executive succession plans, (6) oversee the Company’s pension and ESSOP, and (7) make any necessary and appropriate recommendationrecommendations to the Governance and Nominating Committee regarding Board and committee membership.  While not incorporated by reference in this proxy statement, the Committee’s charter may be viewed on the Company’s website at www.oldrepublic.com.  Printed copies are available to shareholders upon request.   The Committee also oversees the Company’s pension and Employees Savings and Stock Ownership plans. The current members of the Executive Committee are as follows:

Executive Committee
Harrington BischofJohn M. Dixon
Leo E. Knight, Jr.Arnold L. Steiner
Steven R. WalkerAldo C. Zucaro, Chairman

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The Governance and Nominating Committee is organized to oversee the Company’s policies relative to the size, composition and qualifications of the Board of Directors. The Committee is also authorized toto: (1) establish procedures and qualification criteria to identify and recommend qualified candidates for election to the Board, taking into consideration any recommendations from the Executive Committee, (2) review annually the qualifications and requirements of the member directors, the structure and performance of Board committees and, jointly with the Compensation Committee, the compensation for Board members, (3) develop, recommend and annually reassess the Corporate Governance Guidelines applicable to oversee compliancethe Company (4) periodically review, in conjunction with corporate governance principlesthe Executive Committee, the Company’s succession plans with respect to the CEO and proceduresother senior officers, (5) maintain and recommend changes to the Board-approved Code of Business Conduct and Ethics and the Code of Ethics for the nomination process.Principal Executive Officer and Senior Financial Officer, and (6) serve in an advisory capacity to the Board and its Chairman on matters of the organizational and governance structure of the Company. The Committee operates pursuant to a written charter approved each year by the Board of Directors, and performs an annual self-evaluation.

The Board of Directors is currently composed of eleven persons of whom eightnine are classified as independent. It is the Company’s longer termlonger-term objective to keepreduce the size of its Board to between nine and eleven members, and to aim for at least 80% representation by independent directors. One of the goals of the Committee is to have the Board reflect diversity with respect to professional and business experience. Neither race,Race, gender norand national origin isare not considered by the Committee when reviewing proposed candidates or the re-nomination of existing directors. The Committee believes the Board is appropriately diverse in the context of the Company’s business needs and the Board’s responsibilities to shareholders and other stakeholders.

The Committee evaluates and proposes new and continuing candidates to the Board of Directors for approval and slating. The Committee can consider director candidates nominated by shareholders. Any name presented for consideration must be submitted to the Committee’s Chairman with a copy to the Secretary no later than 120 days before the anniversary date of the Company’s last proxy statement.statement in order to be included in the Company’s proxy statement or on its form of proxy. It should be accompanied by a comprehensive description of the person’s qualifications plus additional sources of relevant information which will assist the Committee in its review of the person’s background and qualifications, andso the Committee may make a determination of the candidate’s fitness to serve. All candidates nominated by shareholders will be evaluated on the basis of the same minimum criteria and additional background qualifications and experience discussed in this proxy statement. A candidate who does not satisfy the minimum criteria qualifications will not be recommended by the Committee for membership on the Board. Given the long-term, regulated nature of the Company’s business, nominees will not be considered if they are regarded simply as representatives of a particular shareholder or group of shareholders with a short-term agenda and not oriented toward the demands of a regulated business vested with the public interest.

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While not incorporated by reference in this proxy statement, the Committee’s charter may be viewed on the Company’s website at www.oldrepublic.com. Printed copies are available to shareholders upon request. In the judgment of the Company’s Board of Directors each member of the Committee is considered independent pursuant to the Listed Company Standards of the NYSE and the rules of the SEC. The Committee’s current members are as follows:

Governance and Nominating Committee
Harrington BischofJohn M. Dixon
James C. HellauerArnold L. Steiner
Charles F. Titterton, Chairman
Steven R. Walker, Vice-Chairman


ITEM 2
RATIFICATION OF THE SELECTION OF AN INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
SHAREHOLDER COMMUNICATION WITH THE BOARD

Shareholders of the Company and other interested parties may communicate with the Lead Director, the independent directors, the Board of Directors as a whole, or with any individual director. Such communications must be in writing and sent to Old Republic International Corporation, c/o Secretary, 307 N. Michigan Ave, Chicago, IL 60601. The Secretary will promptly forward the communications to the intended recipient.


ITEM 2
RATIFICATION OF THE SELECTION OF AN INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

In accordance with its charter, the Audit Committee has selected the firm of KPMG LLP (“KPMG”), an independent registered public accounting firm, to be the Company’s independent registered public accounting firm for the year 2011.2014. The selection has been approved by the Board of Directors, subject to a review of the fee proposal and the proposed scope of the audit.  In the ordinary course of corporate governance, the Board of Directors is asking and recommending that the shareholders ratify this selection subject to the Committee’s acceptance of KPMG’s proposed fee and audit scope.  The Company is not required to take any action as a result of the outcome of the vote on this proposal.  However, in the event the shareholders fail to ratify this selection, the Board of Directors and the Audit Committee may investigate the reasons for the shareholders’ rejection and may consider whether to retain KPMG or to appoint another independent registered public accounting firm.  Even if the selection of KPMG is ratified, the Board of Directors and Audit Committee, at their discretion, may direct the appointment of a different independent registered public accounting firm if they believe that such a change would be in the best interests of the Company and its shareholders.

EXTERNAL AUDIT SERVICES
EXTERNAL AUDIT SERVICES

The Audit Committee selected KPMG as the Company’s independent registered public accounting firm to examine its consolidated financial statements for the year 2010.2013.  A member of KPMG will be invited to attend the Company’s Annual Meeting of Shareholders. He or she will be provided with an opportunity to make a statement if so desired, and will be available to respond to appropriate questions.

KPMG’s aggregate fees for professional services for 20102013 and 2012 are shown below. The comparable fees of the Company’s prior independent registered public accounting firm, PricewaterhouseCoopers, LLP (“PwC”), for 2009 are shown below.

Type of Fees 2010 2009  2013 2012 (a)
Audit Fees Audit Fees $ 2,332,675 $ 3,630,230  $3,837,715 $3,457,268
Audit Related Fees Audit Related Fees 273,506 417,445  158,275 219,350
Tax Fees Tax Fees 41,988 8,486  - -
All Other Fees All Other Fees - 3,713  318,000 260,296
Total
Total
$2,648,169 $ 4,059,874  $4,313,990 $3,936,914
    

(a)The total fees shown above for 2012 are $332,832 higher than previously reported, and reflect the final fee adjustments that occurred subsequent to the preparation of the 2013 proxy statement.
 
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The term “Audit Fees” refers to expenses coveringcovering: (a) professional services rendered by the auditors for the audit of the Company’s consolidated annual financial statements included in the Company’s Form 10-K, (b) reviews without audit of financial statements included in the Company’s Forms 10-Q, and (c) services normally provided by the auditors in connection with mandated audits of statutory financial statements and filings, and (d) comfort letters provided in connection with the issuance of its 8.00% Convertible Senior Notes.filings. “Audit Related Fees” refers to charges for assurance and related services by the auditors that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under “Audit Fees”.  They consisted primarilyAudits of fees for: 2010 – security assessment of the Company’s various information technology operations; and, 2009 - actuarial support of audit functions, independent actuarial opinions required for regulatory purposes on insurance subsidiaries’ claim reserves, and assistance in certain state insurance department examinations. Audits ofmost employee benefit plans are performed by an independent audit firm other than PwC or KPMG. “Tax Fees” refers to fees for professional services rendered by the auditors for tax compliance. The term “All Other Fees” refers to fees for products and services provided by the auditors, other than those reported under the preceding categories, and consisted of chargesfees for utilizing certain software forsecurity assessment of the Company’s Canadian insurancevarious information technology operations.
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The charter of the Audit Committee requires that it pre-approve all non-audit work by the Company’s independent registered public accounting firm. In determining whether to approve non-audit services, the Committee considers whether the services in question facilitate the performance of the audit, improve the Company’s financial reporting process or are otherwise in the Company’s and its shareholders’ interests. All of the Audit-Related Fees, Tax Fees and All Other Fees billed to the Company in 20102013 and 2012 were approved by the Audit Committee pursuant to the pre-approval waiver requirements of SEC Regulation S-X. The Audit Committee has determined that the other services and products provided in 20102013 and 2012 by KPMG were not incompatible with KPMG’s independence as the Company’s independent registered public accounting firm.

Both KPMG and PwC havehas advised the Committee that all of their employees engaged in the Company's audits were independent of the Company.

BOARD OF DIRECTORS’ RECOMMENDATION

The Board of Directors recommends a vote FOR the selection of KPMG as the company’s independent registered public accounting firm, subject to the Audit Committee’s approval of that firm’s fee and audit scope proposal for 2011.2014. Proxies solicited by the Board of Directors will be voted forin favor of the selection of this firm unless shareholders specify to the contrary.

AUDIT COMMITTEE REPORT FOR 2010
AUDIT COMMITTEE REPORT FOR 2013

The following Report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this Report by reference therein.

In accordance with its written charter, the Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities. As part of its function, the Audit Committee appointed KPMG as the Company’s independent registered public accounting firm for 2010.2013.

The Audit Committee met with its internal auditors and independent registered public accounting firm (KPMG), with and without management present, to discuss the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting. During 2010,2013, the Audit Committee reviewed the interim financial and other information contained in each quarterly report on Form 10-Q filed with the Securities and Exchange Commission with the Chief Executive Officer, Chief Financial Officer, and the independent registered public accounting firmKPMG prior to its filing. The Annual Report on Form 10-K was similarly reviewed. In addition, the Audit Committee discussed with the independent registered public accounting firmKPMG matters coveredrequired to be discussed by Statement on Auditing Standards No.61 (Communication with Audit Committees). The Audit Committee also received the letter required by Public Company Accounting Oversight Board Rule 3526 (Independence Discussions(“PCAOB”) Auditing Standard No. 16. In addition, the Audit Committee received the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding KPMG’s communications with the Audit Committees)Committee concerning independence, and discussed such matters with KPMG.KPMG its independence. The Audit Committee met regularly with the Company’s legal counsel to review the status of litigation involving the Company or its subsidiaries and to ascertain that the Company complied with applicable laws and regulations.

Following all of these discussions and reviews, the Audit Committee recommended to the Board of Directors and the Board approved the inclusion of the audited financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.2013.

       James C. Hellauer
Leo E. Knight, Jr., Vice-Chairman
Fredricka Taubitz, Chairman
Charles F. Titterton
Dennis P. Van Mieghem, Vice-Chairman
Steven R. Walker

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COMPENSATION MATTERS
COMPENSATION MATTERS
COMPENSATION COMMITTEE REPORT FOR 2013

COMPENSATION COMMITTEE REPORT FOR 2010

The following Report of the Compensation Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this Report by reference therein.

The Compensation Committee met its oversight responsibilities through March 2011for the year 2013 by reviewing and discussing with the Company’s management the Compensation Discussion and Analysis (CD&A)(“CD&A”) contained in this proxy statement. Based upon this review, its discussions and its activities, the Compensation Committee recommended that the CD&A be included in this proxy statement.

Harrington Bischof
John M. Dixon, Chairman
Leo E. Knight, Jr.
Arnold L. Steiner
Fredricka Taubitz
Dennis P. Van Mieghem, Vice-Chairman
Steven R. Walker

Compensation Committee Interlocks and Insider Participation

None of the members of the Compensation Committee has served as an officer or employee of the Company or any of its subsidiaries, nor has any Executive Officer of the Company served as a director or member of a compensation committee for any company that employs any director of the Company or member of the Compensation Committee.

Directors’ Compensation

Independent directors receivereceived an annual retainer of $90,000$110,000 plus an additional annual fee of $10,000 for each committee on which they serve. The Lead Director, Mr. Steiner, and the chairmen of the Governance and Nominating and Compensation Committees, Messrs. Titterton and Dixon, respectively, each receive an additional annual retainer of $10,000. Ms. Taubitz as Chairman of the Audit Committee is paid an additional annual retainer of $15,000. Each of the Committees’ Vice-Chairmen receives an additional retainer of $5,000. Independent directors also serve as directors of regulated subsidiary companiessubsidiaries of the Company and these fees cover service on such subsidiary boards and related committees. Directors’ compensation is reviewed annually, and any changes are recommended by the Compensation Committee, in consultation with the CEO and any independent consultant retained by the Compensation Committee for that purpose. The Compensation Committee’s recommendations are, in turn, voted upon by the full Board. Directors who are employees of the Company or its subsidiaries receive no compensation for their services as directors or committee members.

Non-employee directors are not currently eligible for stock awards, stock options, incentive compensation awards, deferred compensation awards, pensions, or any other compensation programs or arrangements.arrangements which the Company might offer to its employees or those of its subsidiaries. Independent directors may not receive any form of compensation from the Company other than director’s fees in order to remain qualified as independent in the Company’s judgment. As a result, the fees shown below are the total fees paid to directors. Mr. Zucaro, as an employee and Chief Executive Officer of the Company, has his compensation reported in the Summary Compensation Table shown elsewhere in this proxy statement. Messrs.Mr. Dew, and Simpson, who areis retired from Republic Mortgage Insurance Company (“RMIC”), a subsidiary of the company, have theirCompany, receives no compensation reported in the Director Compensation table that follows. This table reports their consulting compensation paid in lieu of director fees for 2010. Other than their participation in a 401(k) program sponsored byfrom RMIC neither Messrs. Dew or Simpson participated in any retirement or pension plan sponsored by the Company or any subsidiary.other than the annual retainer that other directors receive.

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The following table below lists the compensation paid to each director of the Company. TheIn addition to director fees, the Company and its subsidiaries either directly pay or reimburse directors for travel, lodging and related expenses incurred in attending director or committee meetings.

 20102013 Directors’ Compensation 
  Fees Earned Or 
Name Or Paid in Cash 
NameHarrington Bischof Cash$140,000 
Harrington Bischof                                                                                                    Jimmy A. Dew $122,083110,000(*)
John M. Dixon 150,000 
Jimmy A. Dew                                                                                                    176,000(1)James C. Hellauer           
John M. Dixon                                                                                                    130,000 
Leo E. Knight, Jr. 120,837145,000 
William A. Simpson                                                                                                    Arnold L. Steiner 264,000(1)150,000 
Arnold L. Steiner                                                                                                    Fredricka Taubitz 130,000145,000 
Fredricka Taubitz                                                                                                    Charles F. Titterton 120,837140,000 
Charles F. Titterton                                                                                                    Dennis Van Mieghem 120,000140,000 
Dennis Van Mieghem                                                                                                    Steven R. Walker 117,920
Steven R. Walker                                                                                                    118,750
145,000 
(1)  Messrs. Dew and Simpson were not paid any director fees during 2010 but were paid $176,000 and $264,000, respectively, as consultants of RMIC.

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(*) Mr. Dew’s compensation reflects the fact that he has no committee responsibilities.

COMPENSATION DISCUSSION AND ANALYSIS
COMPENSATION DISCUSSION AND ANALYSIS

Compensation Philosophy and Objectives

Compensation levels are set to enable the Company to attract, reward and retain key executives and other associates critical to its long-term success. The Company believes that compensation paid to Executive Officers with major policy setting responsibilities should be closely aligned with the performance of the Company on both a short-term and long-term basis. In this regard, performance is evaluated principally on the basis of achieved returns on equity and growth in operating earnings over multi-year periods. For all other Executive Officers and senior members of the Company’s management and key employees, compensation is based in part on the foregoing financial factors, as well as on their individual performances in supportive staff positions.performances.

Neither the CEO, Chief Financial Officer (CFO)(“CFO”), nor any other Executive OfficersOfficer of the Company have employment contracts. They and all other associates of the Company and its subsidiaries are employees “at-will”. Compensation for most senior members of the Company’s management is set annually by the Compensation Committee of the Board of Directors based either on its sole determination or in consultation with the CEO and the President. The Company does not set any salary, incentive award or stock option targets or conditions for its Executive Officers which will automatically result in salary increases or awards based solely on the achievement of such targets or conditions. Rather, the Company attempts to make the total compensation paid to Executive Officers, the most senior members of the Company’s management and its other employees reflective of the financial performance actually achieved by the Company and the individual divisions or units for which they work. In certain cases, employees’ individual performance is subjectively evaluated and their incentive compensation is set at levels reasonably competitive with other companies in the insurance industry. In all of these regards,reaching compensation decisions, the Company does not measure each individual element of compensation against similar elements paid by other companies or its peer group, nor is any compensation element or the total compensation paid to any executive based solely on comparisons with those of other companies or their executives.

The Company has not previously had a shareholder vote concerning Executive Compensation. In the future, theCompany’s Board of Directors and Compensation Committee shall review the results of such votesreviewed last year’s shareholder vote concerning Executive Compensation and shall consider themconsidered that vote when reviewing possible changes in compensation programs, whenand determining compensation amounts and inwhen making incentive awards tofor Executive Officers and other senior members of the Company’s management.management for the current year. Further, that vote and future votes concerning Executive Compensation will be considered if any future changes in compensation programs occur.

The companies Old Republic selected as members of its peer group for 20102013 are: Ace Limited, American Financial Group, Inc., The Chubb Corporation, Cincinnati Financial Corporation, Fidelity National Financial, Inc., First American Corporation, MGIC InvestmentFinancial Corporation, Markel Corporation, The PMI Group, Inc., Stewart Information Services Corporation, Travelers Companies, Inc. and XL Capital Ltd.Group PLC. A comparison of the aggregate stock performance of this peer group and Old Republic appears in the chart in Part II of the Company Annual Report on Form 10K.10-K.

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Executive Performance Considered in Reaching Compensation Decisions

The Company rewards performance which the Compensation Committee believes will lead to both short-term and long-term success. The Committee evaluates the Company’s CEO performance and compensation primarily in the context of the following factors.

●      Vision and planning for the Company’s future, principally on a long-term basis;
●Vision and planning for the Company’s future, principally on a long-term basis;
●      Strategies established and implemented to realize these plans;
●Strategies established and implemented to realize these plans;
●      Leadership qualities;
●Leadership qualities;
●      Judgment in making decisions regarding plans and general management of the Company’s affairs;
●Judgment in making decisions regarding plans and general management of the Company’s affairs;
●      Commitment to achieving goals, especially when faced with adversity;
●Commitment to achieving goals, especially when faced with adversity;
 ●Ability in setting objectives and promoting the best interests of the Company’s shareholders, the beneficiaries of its subsidiaries’ insurance policies, and those of other stakeholders; and
 ●Adherence to high ethical standards that promote and protect the Company’s good name and reputation.

No particular component is given any greater weight than another. Rather, each Compensation Committee member subjectively reviews these characteristics in the aggregate and exercises his or her best business judgment in reaching conclusions. The Committee evaluates the CEO’s performance and compensation itself and the other Executive Officers’ performance and compensation in consultation with the CEO and other members of the President andOffice of the Chief Executive in the context of the above noted factors. The performance of non-policy-making senior members of the Company’s management is likewise reviewed by the Committee in consultation with the CEO and the President.CEO.

Elements of Compensation and the Factors and Rationale in Determining Compensation Amounts

The compensation paid by the Company to its CEO, other Executive Officers and senior members of the Company’s management is usually composed of the following basic elements:

●     Annual Salary;
●Annual Salary;
 ●Incentive awards, including both cash and deferred amounts, based on earnings and return on equity achieved by the Company and its subsidiaries over multi-year periods and, in certain cases, bonuses based also upon their individual performances;
●     Stock option awards; and
●Stock option awards; and
●     Miscellaneous other benefits such as pensions and health insurance programs.


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●Miscellaneous other benefits: such as health insurance programs.

The following table shows the segmented sources of Old Republic’s pretax and post-tax operating income. The level and trends in earnings of such segments and their past and most recent contributions to the Company’s growth in the shareholders’ equity account are important considerations in the determination of cash and stock option incentive compensation for certain Executive Officers and other senior members of the Company’s management.

Segmented Operating Results
($ in Millions)
Segmented Operating Results ($ in Millions)
2013 2012 2011 2010 2009
2010 2009 2008 2007 2006
Pretax operating income (loss)(a):         
Pretax operating income (loss) (a):              
General insurance
$ 172.7 $ 200.1 $ 294.3 $ 418.0 $ 401.6$288.3 $261.0 $353.9 $316.7 $311.4
Mortgage guaranty
(260.8) (486.4) (594.3) (110.4) 228.4
Title insurance
9.4 2.1 (46.3) (14.7) 31.0 124.3  73.8  36.2  9.4  2.1
Corporate and other (b)
(2.8) 4.0 13.5 15.1 - 2.1  (2.7)  (14.6)  (2.8)  4.0
Subtotal
 414.7  332.1  375.5  323.2  317.7
RFIG run-off business 110.0  (508.6)  (727.8)  (404.8)  (597.7)
Total
(81.5) (279.9) (332.7) 308.0 661.1 524.8  (176.4)  (352.2)  (81.5)  (279.9)
Income taxes (credits) on operating income (loss)(40.9) (122.7) (144.6) 81.3 208.6 173.2  (76.6)  (133.7)  (40.9)  (122.7)
Net operating income (loss) (a)
$ (40.6) $(157.2) $(188.1) $ 226.7 $ 452.4$351.6 $(99.7) $(218.5) $  (40.6) $(157.2)
__________         

(a)Operating income is a non-GAAP reflection of the Company’s business results inasmuch as it excludes investment gains or losses from sales of securities or impairments in the value of portfolio securities.
(b)Represents amounts for Old Republic’s holding company parent, minor corporate services subsidiaries, and a small life and healthaccident insurance operation.

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The following table shows athe compensation summary for the Chairman of the Board and Chief Executive Officer, the Chief Financial Officer and the four policy-making Executive Officers responsible for the operations of the Company and its major segments. Bonus and stock option awards for Messrs. Zucaro and Kellogg and Nard, as of July 2010, have beenwere based to a significant degree on the Corporation’s consolidated results,results; those of Messrs. Rager and Yeager were based primarily on the results of the General and Title Insurance segments, respectively, and prior to 2010, Mr. Nard’s compensation was primarily based on the Mortgage Guaranty segment.respectively. The compensation of Mr. Mueller, and other non-policy-making Executive Officers and the other senior members of the Company’s management iswere based on a composite of Old Republic’s segmented and consolidated results, as well as theiron subjective individual performance evaluations by the Company’s CEO, President and Executive Officers.evaluations.
Summary Compensation Table
(a)(b)(c)(d)(e)(f)(g)(h)
     Change in  
     Pension Value  
    Value ofand Nonqualified  
    StockDeferred  
Name and   OptionCompensationAll Other (4)Total
Principal PositionsYearSalaryBonus (1)Awards(2)Earnings (3)Compensation($)
Aldo C. Zucaro
Chairman and
2013
2012
$ 828,333
 810,000
$283,340
 155,197
$ 119,700
  89,654
$  69,315
 224,997
$ 13,677
  13,544
 
$1,314,365
 1,293,392
Chief Executive Officer2011792,049138,146189,500228,24212,415 1,360,352
 2010776,146237,780              -195,16822,003 1,231,097
 2009776,14640,748              -183,12922,577 1,022,600
         
Karl W. Mueller
Senior Vice President and
2013
2012
431,667
421,667
171,469
152,045
55,575
41,625
25,395
56,292
8,568
7,984
 
692,674
679,613
Chief Financial Officer2011411,667138,02656,85053,3767,386 667,505
 2010400,000183,00031,32537,6776,797 658,799
 2009385,000113,44613,11624,8867,216 543,664
         
James A. Kellogg
Executive Vice Chairman
2013
2012
432,885
491,539
66,208
57,000
-
44,827
114,675
200,148
19,595
16,892
 
633,363
810,406
 2011485,00068,34294,750230,09619,768 897,956
 2010472,400118,374              -194,11926,538 811,431
 2009476,03418,821              -156,58523,031 674,471
         
R. Scott Rager (5)
President and
2013
2012
476,667
466,667
388,708
336,115
55,575
41,625
                -
                -
24,763
21,547
 
945,713
865,954
Chief Operating Officer;2011456,667429,98856,850                -33,685 977,190
  President - General Insurance2010446,000419,26723,270                -13,060 901,597
 2009433,667386,1528,744                -5,364 833,927
         
Rande K. Yeager
Senior Vice President -
2013
2012
471,250
455,833
400,656
250,000
51,300
27,537
53,308
175,807
16,683
13,053
 
993,197
922,230
  Title Insurance2011439,583140,00039,785207,48613,053 839,907
 2010404,167          -35,800169,87010,195 620,032
 2009357,167          -17,488107,22910,951 492,835

Summary Compensation Table
(a)(b)(c)(d)(e)(f)(g)(h)
     Change in  
     Pension Value  
    Value ofand Nonqualified  
    StockDeferred  
Name and   OptionCompensationAll Other (5)Total
Principal PositionsYearSalary (1)Bonus (2) Awards(3)Earnings (4)Compensation($)
         
Aldo C. Zucaro2010$776,146$237,780$       -$195,168$ 22,003 $1,231,097
Chairman & Chief2009776,14640,748       -183,12922,577 1,022,600
Executive Officer
2008776,146    37,513       -  50,54716,320    880,526
 2007767,81338,090936,000343,73717,719 2,103,359
 2006741,146726,0191,528,800283,68020,237 3,299,882
         
Karl W. Mueller2010400,000183,00031,32537,6776,797 658,799
Senior Vice President &2009385,000113,44613,11624,8867,216 543,664
Chief Financial Officer
2008370,833103,72438,00015,8767,807 536,240
 2007358,333190,927177,84011,2327,527 745,859
 2006341,667266,934191,10015,0449,941 824,686
         
James A. Kellogg2010472,400118,374       -194,11926,538 811,431
Executive Vice2009476,03418,821       -156,58523,031 674,471
Chairman
2008472,40018,273       -79,90420,246 590,823
 2007467,40018,632397,800(5,968)13,402 891,266
 2006413,233449,186327,600104,70017,737 1,312,456
         
Christopher S. Nard  (6)2010475,00081,20176,970 864,922(7)1,498,093
President & Chief2009395,00031,91652,464-13,365(8)492,745
Operating Officer
2008375,33331,209152,000-17,106(8)575,648
 2007351,83331,702280,000-33,521(8)697,056
 2006343,500784,135409,500-36,138(8)1,573,273
         
R. Scott Rager  (6)2010446,000419,26723,270 13,060 901,597
Senior Vice President -2009433,667386,1528,744-5,364 833,927
General Insurance
2008420,000498,62957,000-5,364 980,993
 2007374,500486,440257,400-487,109(9)1,605,449
 2006294,583430,770256,815-5,982 988,150
         
Rande K. Yeager2010404,167                  -35,800169,87010,195 620,032
Senior Vice President-2009357,167                  -17,488107,22910,951 492,835
Title Insurance
2008316,063                  -45,60096,18610,967 468,816
 2007299,383                  -23,40026,5099,550 358,842
 2006284,450500,00081,90074,46010,260 951,070
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(1)Since January 1, 2007, no employee ofIn this table, the Company or any of its subsidiaries received any director fees for attending Board meetings ofawards are attributed to the Company or any of its subsidiaries. For 2006year on which the award was based, even though the award was granted in the following calendar year. The table includes any non-material amount of such fees.
(2)Includes the combined cash and deferred incentive compensation awards granted under the Company’s performance recognition plans or similar plans maintained by subsidiaries of the Company. In this table, both the cashFor Messrs. Rager 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, with 50% paid in cash and 50% deferred, except as to Mr. Yeager, whose awards were 100% cash. Beginning in 2007, the first $25,000 of these awards werean award is paid in cash and the balance wasis split with 50% being paid in cash and the balance being deferred. 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, theThe deferred portionsamounts accrue interest for awards made in 2005 and subsequent. The deferred amounts included in this column are shown without a present value discount but show the interest accrual on the deferred balances for the year.after 2004.  No incentive compensation awards have beenwere granted since 2007between 2009 and 2013 under the Company’s and its subsidiaries’ Key Employee Performance Recognition PlansPlan as thesethis plan has been suspended due to poor consolidated results. However, certain subsidiary plans have been suspended. However,remained in place and certain Executive Officers and other employees have been granted bonus awards based on the Company’s segmented results as well asor on the basis of a subjective evaluation of their individual performance. The 2010, 2009 and 2008 bonus awards shown for Messrs. Mueller, Rager and RagerYeager represent such awards. The awards andfor all Executive Officers include interest on their deferred incentive compensation plan balances.balances for prior years.  For the years 2007 toyear 2009, Messrs. Zucaro Kellogg and NardKellogg were credited only with only interest on their deferred incentive compensation plan balances. Forbalances; for the years 2010 to 2013, their awards represent a subjectively determined bonus and interest on their deferred incentive compensation plan balances.  No interest was accrued for Mr. Yeager prior to 2013.
(3)(2)The value of options is calculated pursuant to the Black-Scholes model. 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 in the years shown and reflect, among other factors previously noted, an evaluation of earnings trends and returns on equity for prior years.
 The significant facts and assumptions incorporated in the Black-Scholes model used to estimate the value of the options include the following:
 a)Options are issued with an exercise price equal to 100% of the per share value at the close of trading (the “Fair Market Value”) of Common Stock on the business day immediately preceding the date of grant (the “Grant Date”).
 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 will hold these options for an average of 8 years.
 c)Specific interest rates are used for valuing the awards. Such rates are predicated on 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)A stock price volatility factor is utilized in valuing the option awards. This factor is calculated using daily stock prices for the period prior to the grant date corresponding with the expected option life.
 e)Expected annual dividend yields ranging between 3.56.0% and 6.5%8.0% are used in the calculation of the awards.
 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, if any, will depend on the excess of the market value over the exercise price on the date the option is exercised. The values attributed to options granted in the years 2006 to 2008 have turned out to be of no value based on the actual market value of the Company’s stock through March 31, 2011.
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(4)(3)Represents the aggregate change in the actuarial present value of the accumulated benefits under allthe Company’s defined benefit and actuarial pension plans, including supplemental plans.plan. The Company does not have any non-qualified deferred compensation plans that credit above market or preferential earnings to participants.
(5)(4)Includes all minor amounts covering the Company’s matching contribution to the Executive Officers’ ESSOP accounts; the value of the Company’s group term life insurance plan treated as income; the value of the personal use of aany vehicle supplied for Company business; and the personal value of meals and club dues incurred for Company business.
(6)(5)Mr. Nard assumed additional responsibilities asRager became President of the Company effective July 1, 2010; Mr. Rager assumed additional responsibilities as an Executive Officer of the Company and its General Insurance Companies effective June 1, 2006.
(7)Includes $500,000 as a bonus in recognition of his ascendancy to the position of President and the attendant requirement to relocate, grossed up by $218,103 to cover federal and state income tax liability thereon, and $139,617 in relocation expenses paid to Mr. Nard in connection with his relocation to the Company’s Chicago executive offices in 2010.
(8)Includes the vested amounts accrued under the RMIC Profit Sharing Plan, of which there was none in 2008, 2009 and 2010 and a minor amount attributed to a health program available to all RMIC employees.
(9)Includes a $400,000 relocation bonus and $84,362 in relocation expenses paid to Mr. Rager in connection with his relocation to the Company’s Chicago executive offices in 2007.2012.

Annual Salary

The Company’s objective in establishing annual salaries for all of its employees is to set themannual salaries at amounts which:

1)  Are reasonably competitive in the context of prevailing salary scales in the insurance industry; and
·Are reasonably competitive in the context of prevailing salary scales in the insurance industry; and
2)  Provide a fixed, reasonable source of annual income.
·Provide a fixed, reasonable source of annual income.

The primary factors which are considered in varying degrees inwhen establishing annual salaries for certain Executive Officers and other senior members of the Company’s management are:

●     Business size and complexity of the operations with which the person is associated;
●Business size and complexity of the operations with which the person is associated;
●     The person’s level of responsibility and experience; and
●The person’s level of responsibility and experience; and
●     The success of the business unit to which the person is assigned and the evaluation of his or her contribution to that success.
●The success of the business unit to which the person is assigned and the evaluation of his or her contribution to that success.

When making these evaluations, prevailing salary scales in the insurance industry, the annual consumer price index, trends in salary levels in published or private compilations and reports, and data contained in the proxy statements of publicly held insurance organizations are taken into account. No formula, set benchmark or matrix is used in determining annual salary adjustments. The decision regarding each Executive Officer is subjectively based upon all of the above factors, with the Compensation Committee members exercising their business judgment in consultation with the CEO, as to Executive Officers other than the CEO himself.

15
The salaries of the Executive Officers are reviewed on an annual basis during the first quarter of the year, and concurrently with a promotion or other significant change in responsibilities. Prior compensation, prior cash and/or deferred incentive awards, bonuses and prior gains from the exercise of stock options are not taken into account when setting current annual salaries for the CEO and other Executive Officers of the Company.

Incentive Awards and Bonuses

The Company uses incentive awards, comprised of both cash and deferred amounts, as well as bonuses. Incentive awards and bonuses are intended to reward and retain eligible Executive Officers, other senior members of the Company’s management and certain key employees, and afford thememployees. They are also intended to provide an opportunity and incentive to increase their compensation based on management’s and the Compensation Committee’s review of their performance.

Performance Recognition Plans

Under the Company's Key Employee Performance Recognition Plan (KEPRP)(“KEPRP”), prior to its suspension in 2007, a performance recognition pool is establishedhad been calculated each year for allocation among eligible key employees of the Company and its participating subsidiaries, including the CEO, CFO, Executive Officers and other senior members of the Company’s management. Employees eligible to share in this pool arehad been selected by the Compensation Committee in consultation with the CEO and the President.CEO. The CEO recommendsrecommended the allocationtotal amount of the pool tofor participants in the plan and the Compensation Committee then makesmade the sole determination with regard to the CEO'stotal amount of the pool; and President’sthe award thereunder, if any, granted to the CEO. The Committee also approved the award recommendations for the CFO, the other Executive Officers and senior members of management based upon their performance and the CEO’s recommendation. The eligibility and award using the remaining balance in the pool. Up to 50%awards of any one year’s pool amount may be carried forward for up to three years for later allocation. In designating eligibleother key employees and determining amounts to be allocated,was also approved by the Compensation Committee consults withfollowing the CEO andrecommendations made by the President and considersCEO. All awards have been based on the positions and responsibilities of the key employees, the perceived value of their accomplishments to the Company, their expected future contributions to Old Republic, and other relevant factors. The Compensation Committee's evaluation of all such factors ishas been subjective and based on the business judgment of its members.

Each year’s pool amount takestook into account pre-established objectives approved by the Compensation Committee for return on equity and year-over-year growth in earnings. Calculation of the pool iswas made in accordance with a detailed formula affected byby: (a) the eligible participating employees' annual salaries, (b) the current year's earnings in excess of the prior year's earnings (excluding income from realized investment gains or losses), multiplied by a factor determined by the increase in the Company's earnings per share, and (c) the latest year's return on equity in excess of a minimum target return on equity equal to two times the mean of the five-year average post-tax yield on 10-year and 20-year U.S. Treasury Securities. The pool iswas limited to a percentage of plan participants' aggregate annual base salaries, ranging from 10% to 150%, depending upon the amount by which the current year's actual return on equity exceedsexceeded the minimum target return on equity for the year. Up to 50% of any one year’s pool amount was carried forward for up to three years for later allocation. There iswas no prescribed guarantyguarantee or limit as to how much of the year's available pool maywould be awarded to each participant.

Prior to 2007, there was an immediate payment in cash of 50% of any award,
18
Under the KEPRP as well as 50% of the multiplier factor applied to the deferred balances of prior years' participants; the balance of the award was deferred and vested at the rate of 10% per year of participation. Beginning in 2007,created, the first $25,000 of any award, including any multiplier applied to a deferred balance, iswas paid in cash. For awards in excess of that amount, 50% of the excess iswas paid in cash and 50% iswas deferred. The deferred balance of the award vests at the rate of 10% per year of participation. The deferred balance, if any, is credited with interest at a rate approved annually by the Compensation Committee. Pursuant to the terms of the plan, participants become vested in their deferred account balances upon total and permanent disability, death, upon the earlier of attaining age 55 or being employed for 10 years after first becoming eligible or upon a change of control of the Company. Benefits are payable in a set number of equal installments, beginning no earlier than age 55, following termination of employment, death, disability, retirement or a change in control of the Company. Distributions for Executive Officers can begin no earlier than six months following their termination from service.

In addition to the KEPRP, the Company also maintains a number of separate plans for several individual sub­sidiaries, or segments of business such as the Mortgage Guaranty and Title Insurance segments.business. Such plans provide for the achievement of certain financial results and objectives as to each such entity. Each of these plans operateshas operated in the same basic fashion as the Company’s Plan. The award pools for each plan are also established according to detailed formulas that take into account the increases in earnings, returns on equity in excess of a minimum target percentage, and other factors pertinent to each operating entity. Each separate subsidiary’s or operating center’s plan has a similar cash and deferred element, except forelement. Mr. Yeager’s awards have been based on such a few separate plans used for transaction-driven businesses, such as Title Insurance, which have historically been cash-basis plans only.plan since 2011.

Incentive awards are typically granted annually during the first quarter of the year to eligible employees who are employed as of the award date. This follows the receipt of the independent registered public accounting firms’ reports on the financial statements of the preceding year, and an evaluation of any pertinent and significant post balance sheet events and business trends.

Bonuses

The awards shown in the “Bonus” column of the preceding Summary Compensation Table for 2006 were approved by the Compensation Committee following a review of the tangible factors cited at (a), (b), and (c) in the second paragraph of this section.Committee. As a result of the substantial decline in the earnings between 20072008 and 20102012 of the Company’s consolidated business and of its run-off Mortgage Guaranty and Title Insurance segments,business, in particular, no incentive awards or bonus payments, except for purely subjective awards, were made to any ofunder the policy-making Executive Officers responsibleKEPRP for the operations ofyears shown in the Company as a whole or the Mortgage Guaranty or Title Insurance units.above table. In light of current business and financial conditions, the Compensation Committee, in consultation with the Chairman and CEO, and the President, has determined to suspendsuspended the Company’s KEPRP andKEPRP. However, certain other plans. The current policypurely subjective awards were made to policy-making Executive Officers responsible for the operations of the Company and its subsidiaries. The Compensation Committee is to grantalso granted bonus awards if any, to non-policy-making Executive Officers, other senior members of the Company’s management and other employees based upon a composite of the Company’s segmented and consolidated results as well as those employees’ individual performance evaluations by policy-making Executive Officers.
16
evaluations. The manner of deciding who shall receive these bonuses and the amounts of such bonuses is the same as outlined in the first paragraph of the above section.

The following table sets forth certain information regarding non-qualified deferred compensation awards made to the persons listed in the Summary Compensation Table and shows the pro forma balances of such accounts as of December 31, 2010.2013. The individuals listed had no discretion as to whether they wished to defer any awards made to them by the Company and were not permitted to voluntarily make contributions of their own to the Company’s KEPRP. The amounts shown as contributed to the named persons’ accounts were based upon their performance for that year even though the award itself was made after year end following the receipt of the independent registered public accounting firms’firm’s reports on the financial statements of the Company, review of any significant post-balance sheet events, and their continued employment. Similarly, the amount earned on prior year balances and the aggregate balances for these persons are presented as of the date coincident with the calculation and the making of awards in mid-March 2011.2014.

Nonqualified Deferred Compensation
Nonqualified Deferred Compensation
 
 
Name
 
 
Company’s
Contributions 2013
 
 
Aggregate Earnings
2013
 
Aggregate Deferred
Balance as of
December 31, 2013
Aldo C. Zucaro          - $33,340 $6,763,778
Karl W. Mueller          -   11,469      514,473
James A. Kellogg          -    16,208     1,542,726
R. Scott Rager $162,500   38,708    2,750,101
Rande K. Yeager   150,000               656                                                            292,562

19
 
 
Name
 
 
Company’s
 Contributions 2010
 
 
Aggregate Earnings
2010
 
Aggregate Deferred
 Balance as of
December 31, 2010
Aldo C. Zucaro -         $ 37,780            $ 6,694,876
Karl W. Mueller -            13,000                  490,933
James A. Kellogg -            18,374              1,506,828
Christopher S. Nard -            31,201              2,263,676
R. Scott Rager       $ 180,000            34,267              2,187,778
Rande K. Yeager - - -

Stock Option Awards

The Company believes that its CEO, Executive Officers, other senior members of the Company’s management and other key employees who make a substantial contribution to long-term performance should have an equity interest in the Company. The Company’s current Incentive Plan was approved by shareholders in 2006 and replaced a similar non-qualified stock option plan that had been in place for more than twenty-five years. Pursuant to the existing Plan, as amended, a set number of shares (originally 14,500,000) are available for award until the Incentive Plan terminates in 2016. At year end 2010, 13,753,000year-end 2013, 10,877,713 shares were available for future awards pursuant to this plan.Plan.

The objective of the planPlan is to encourage:

1)     an·An alignment of stockholder and employee interests;
2)     employee·Employee efforts to grow shareholder value; and
3)     a·A long-term commitment to the Company by participating employees.

Accordingly, stock option grants have not been limited solely to the CEO and Executive Officers but have been available to a number of Company employees. The factors considered when making stock option awards include:

●      theThe achievements of the individual;
●      theThe overall performance of the Company;Company or, in certain cases, segmented results; and
●      theThe anticipated contributions of awardeesthe individual to the Company’s future success.

No formula, set benchmark or matrix is used in determining stock option awards. The relative significance of the above factors with respect to awards granted to the CEO, and other Executive Officers and all other employees is determined subjectively by the Compensation Committee taking into consideration the segmented and consolidated results of the Company, with each member using itstheir business judgment, and infollowing consultation with the CEO and the President.for awards other than his own. The aggregate number of option shares granted over the past fivethree years to all employees, including the CEO, the Executive Officers of the Company and all employeessenior members of the Company has ranged from 0.4% to 1.1%been less than 0.5% of the then outstanding Common Stock of the Company.

Option awards are made once a year, usually during the first quarter following receipt of the independent registered public accounting firms’firm’s report on the financial statements for the preceding year. The Compensation Committee approves the total pool of option shares and the options granted to the CEO, the President, the other Executive Officers, and a number of the senior members of the Company’s management and its subsidiaries. The options’ exercise price is the fair market value of the Company’s Common Stock on the Grant Date. When making these awards, the other sources of compensation for the participant, such as base salary and any other incentive awards, are taken into account so as to achieve a reasonable balance of cash and future income or value. The grant of options and their strike price are not linked to any Company action such as the release of earnings and have typically occurred during March of each year.

17

STOCK OPTION GRANTS AND EXERCISES

The following table sets forth certain information regarding options to purchase shares of Common Stock granted in 20102013 to the Executive Officers listed in the Summary Compensation Table:

2010 Stock Option Grants
Stock Option GrantsStock Option Grants
   All Other Option Awards: Exercise or Grant Date   All Other Option Awards: Exercise or Grant Date
 Grant Number of Securities Base Price Fair Value of Grant Number of Securities Base Price Fair Value of
Name Date Underlying Options Of Option Awards Option Award Date Underlying Options of Option Awards Option Award
                
Aldo C. Zucaro -                   - -         - 3/20/13 70,000 $12.57 $119,700
Karl W. Mueller 3/25/10             17,500 $12.08 $ 31,325 3/20/13 32,500   12.57 55,575
James A. Kellogg -                    - -        - 3/20/13 - - -
Christopher S. Nard 3/25/10            43,000 12.08 76,940
R. Scott Rager 3/25/10            13,000 12.08 23,270 3/20/13 32,500 12.57 55,575
Rande K. Yeager 3/25/10            20,000 12.08 35,800 3/20/13 30,000 12.57 51,300

The purchase price per share of Common Stock subject to an option was fixed by the Compensation Committee. Such purchase price was the fair market value of the Company’s Common Stock on the Grant Date.

20
The term of each option was 10 years from the Grant Date. Options are exercisable in accordance with the following vesting schedule: 10% at the end of the year of grant, and thereafter, annually at the rates of 15%, 20%, 25% and 30% so that at the end of the 5th fiscal year after the grant they are 100% vested. If the optionee dies, retires in good standing after age 57, or becomes disabled, vesting acceleration occurs. In such cases and if a change in control of the Company occurs, vesting accelerates to the extent of the higher of 10% of the shares covered for each year of service by the optionee or the actual vested percentage plus 50% of the unvested remaining shares.  For any option granted after January 1, 2014 to an optionee who, as of the date of the grant (i) has attained age 65, (ii) is currently an employee of the Company or a subsidiary, (iii) has been employed by the Company or a subsidiary for ten (10) years or longer, such option shall be fully vested as of the date of the grant. All option shares granted prior to 20072010 are now fully vested.

Exercises of Stock Options During 2010
Exercises of Stock Options

The following table sets forth certain information regarding options to purchase shares of Common Stock  exercised during 2010 by anyNone of the Executive Officers named in the Summary Compensation Table.

Option Awards
Name
(a)
Number of Shares
Acquired on Exercise
(b)
Value Realized
on Exercise
 (c)
Aldo C. Zucaro--
Karl W. Mueller--
James A. Kellogg          4,219$21,179 (1)
Christopher S. Nard        28,125$106,470 (1)
R. Scott Rager--
Rande K. Yeager--
(1)  During 2010, Messrs Kellogg and Nard exercised options granted to them in 2000. As such, the value shown here accrued over those ten years.
Table exercised any stock options during 2013.

Equity Compensation Plan Information

The following table sets forth certain information regarding securities authorized for issuance under equity compensation plans as of year end 2010.year-end 2013. The Company only has equity compensation plans that have been approved by the Company's shareholders.

Equity Compensation Plan Status as of Year End 2010
Equity Compensation Plan Status as of Year End 2013
  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                                                    12,807,272 $ 16.97 10,877,713
       
Equity compensation plans not      
  approved by security holders - - -
       Total 12,807,272 $ 16.97 10,877,713
  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                                                  16,560,483 $ 17.39 13,753,000
       
Equity compensation plans not      
  approved by security holders - - -
       
       Total                                                    16,560,483 $ 17.39  13,753,000

21
 
18
 

The following table sets forth information regarding the unexercised options held by the persons listed in the Summary Compensation Table. This table shows the option exercise price for each exercisable and unexercisable option held by each individual and the date upon which each option expires.

Outstanding Equity Awards at Year End 2010
Outstanding Equity Awards at Year End 2013
  Number of Securities  
  Underlying Underlying    
  Unexercised Unexercised Option Option
  Options Options Exercise Expiration
Name Exercisable Unexercisable Price Date
Aldo C. Zucaro 346,875 - $19.32 03/09/14*
  112,500 -   18.41 04/11/15
  280,000 -   21.48 05/26/16
  200,000 -   21.77 03/13/17
  45,000 55,000   12.33 03/23/21
  
17,500
7,000
 
52,500
63,000
 
  10.80
  12.57
 
03/21/22
03/20/23
         
Karl W. Mueller 37,500 -   20.02 10/01/14
  12,500 -   18.41 04/11/15
  35,000 -   21.48 05/26/16
  38,000 -   21.77 03/13/17
  25,000 -   12.95 03/18/18
  15,000 -   10.48 03/25/19
  12,250 5,250   12.08 03/25/20
  13,500 16,500   12.33 03/23/21
  
8,125
3,250
 
24,250
29,250
 
  10.80
  12.57
 
03/21/22
03/20/23
         
James A. Kellogg 25,000 -   19.32 03/09/14*
  37,500 -   18.41 04/11/15
  60,000 -   21.48 05/26/16
  85,000 -   21.77 03/13/17
  20,000 30,000   12.33 03/23/21
  8,750 26,250   10.80 03/21/22
         
R. Scott Rager 27,500 -   19.32 03/09/14*
  28,750 -   18.41 04/11/15
  47,000 -   21.48 05/26/16
  55,000 -   21.77 03/13/17
  37,500 -   12.95 03/18/18
  10,000 -   10.48 03/25/19
  9,100 3,900   12.08 03/25/20
  
13,500
8,125
3,250
 
16,500
24,375
29,250
 
  12.33
  10.80
  12.57
 
03/23/21
03/21/22
03/20/23
         
Rande K. Yeager 18,750 -   19.32 03/09/14*
  13,750 -   18.41 04/11/15
  15,000 -   21.48 05/26/16
  5,000 -   21.77 03/13/17
  30,000 -   12.95 03/18/18
  20,000 -   10.48 03/25/19
  14,000 6,000   12.08 03/25/20
  
9,450
5,375
3,000
 
11,550
16,125
27,000
 
  12.33
  10.80
  12.57
 
03/23/21
03/21/22
03/20/23
         
  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 
  346,875 - 19.32 03/09/14 
  112,500 - 18.41 04/11/15 
  280,000 - 21.48 05/26/16 
  140,000 60,000 21.77 03/13/17 
  - - 12.95 03/18/18 
  - - 10.48 03/25/19 
  - - 12.08 03/25/20 
          
Karl W. Mueller 37,500 - 20.02 03/09/14 
  12,500 - 18.41 04/11/15 
  35,000 - 21.48 05/26/16 
  26,600 11,400 21.77 03/13/17 
  11,250 13,500 12.95 03/18/18 
  3,750 11,250 10.48 03/25/19 
  1,750 15,750 12.08 03/25/20 
          
James A. Kellogg 6,563 - 14.36 03/21/11 (*)
  7,500 - 16.86 03/20/12 
  9,375 - 14.37 03/19/13 
  25,000 - 19.32 03/09/14 
  37,500 - 18.41 04/11/15 
  60,000 - 21.48 05/26/16 
  59,500 25,500 21.77 03/13/17 
  - - 12.95 03/18/18 
  - - 10.48 03/25/19 
  - - 12.08 03/25/20 
          
Christopher S. Nard 65,625 - 14.36 03/21/11(*)
  56,250 - 16.86 03/20/12 
  75,000 - 14.37 03/19/13 
  75,000 - 19.32 03/09/14 
  53,125 - 18.41 04/11/15 
  75,000 - 21.48 05/26/16 
  42,000 18,000 21.77 03/13/17 
  45,000 55,000 12.95 03/18/18 
  15,000 45,000 10.48 03/25/19 
  4,300 38,700 12.08 03/25/20 
          
R. Scott Rager 15,000 - 16.86 03/20/12 
  27,500 - 19.32 03/09/14 
  28,750 - 18.41 04/11/15 
  47,000 - 21.48 05/26/16 
  38,500 16,500 21.77 03/13/17 
  16,875 20,625 12.95 03/18/18 
  2,500 7,500 10.48 03/25/19 
  1,300 11,700 12.08 03/25/20 
          
Rande K. Yeager 14,063 - 16.86 03/20/12 
  18,750 - 19.32 03/09/14 
  13,750 - 18.41 04/11/15 
  15,000 - 21.48 05/26/16 
  3,500 1,500 21.77 03/13/17 
  13,500 16,500 12.95 03/18/18 
  5,000 15,000 10.48 03/25/19 
  2,000 18,000 12.08 03/25/20 
          

(*)      These options lapsedexpired on March 21, 2011.9, 2014 without being exercised.
 
22
 
19
 

The following table sets forth a summary of all stock options that have been granted to Company employees, including those persons listed in the Summary Compensation Table, as of December 31, 2013.  This table is intended to highlight that the compensation of employees, in the form of stock options, has suffered due to the decline in price of the Company’s Common Stock since 2007.  Note that the options granted prior to 2008 are currently “out of the money”, and that the options granted in 2004 expired without value to the employees holding them on March 9, 2014.

  Options Outstanding Options Exercisable
    Weighted – Average   Weighted
  Year(s) Number Remaining     Average
  Of Out- Contractual Exercise Number Exercise
Ranges of Exercise Prices Grant Standing Life Price Exercisable Price
$19.32to$20.02 2004(a) 
1,850,852
 
0.25
  $19.33 
1,850,852
  $19.33
$18.41to$20.87 2005  
1,572,059
 1.25  18.45 
1,572,059
  18.45
$21.36to$22.35 2006  
2,089,525
 2.25  
22.00
 
2,089,525
  
22.00
$21.78to$23.16 2007  
1,971,475
 3.25  21.78 
1,971,475
  21.78
$7.73to$12.95 2008  
1,048,370
 4.25  12.93 
1,048,370
  12.93
$10.48   2009  698,133 5.25  10.48 698,133  10.48
$12.08   2010  
690,225
 6.25  12.08 490,234  12.08
$10.51to$14.31 2010(b) 
67,745
 
0.25
  
12.96
 
67,745
  
12.96
$12.33   2011  
945,413
 7.25  12.33 
442,146
  12.33
$10.80   2012  
953,475
 8.25  10.80 246,711  10.80
$12.57     2013  920,000 9.25  12.57 105,048  12.57
Total      
12,807,272
    $16.97 
10,582,298
  
$18.03
(a)  These options expired on March 9, 2014 without being exercised.
(b)  Represents the replacement options issued pursuant to the PMA merger.

Pension PlansPlan and Baseline Security Plan

The Company maintainsDuring 2013, the Old Republic International Corporation Salaried Employees Restated Retirement Plan (“ORI Employees RetirementCompany Plan” or "Company Plan") for eligible employeesassumed the obligations and thoseassets of participatingthe other retirement plans maintained by subsidiaries whoof the Company. Participation in the Company Plan and the other plans maintained by subsidiaries had been closed to new employees for many years. Individuals who became employed through year end 2004. Persons whose employment commenced on or after January 1, 2005 areparticipation was closed were not eligible to participatefor participation in the Company Plan, but maywere permitted to participate in the Company’s 401(k) ESSOP. TheESSOP, subject to its eligibility rules. Effective December 31, 2013, the accrued benefit levels available to each participant in the Company Plan which is non­contributory, provides forwere frozen and no new benefits will accrue to participants after that date.

Under the Company Plan, as it applies to Messrs. Zucaro, Mueller and Kellogg, benefits are determined based upon 1.5% of the participant's "Final Average Monthly Earnings" (1/60th of the aggregate earnings of the employee during the period of the five consecutive years of service out of the last ten consecutive years of service which results in the highest “Final Average Monthly Earnings”) multiplied by the participant's years of service. Earnings include base salary and commissions, but excludesexclude bonuses and cash and deferred incentive compensation awards granted under the Company's currentany Company or subsidiaries’ Incentive Award Plan or KEPRP. Early retirement benefits are available under the Company Plan for persons who are eligible and elect to retire after attaining age 55 provided they have at least five years of vested service with the Company. In this case, early retirement benefits are adjusted based upon the participant’s age at retirement. The adjustment begins at 50% of normal benefits at age 55. For participants age 55 to 60 the early retirement benefits increase by 3.33% per year. Between ages 60 and 65, they increase by 6.66% per year until they reach 100%. Only Mr. Kellogg is currently eligible for early retirement benefits under the Company Plan and Mr. Rager is not a participant in the Company Plan.

Under the Company Plan, as it applies to Mr. Yeager, the monthly benefit is 1.20% of the participants Final Average Monthly Earnings up to the Social Security Integration Level, and 1.75% of the amount in excess of that level, multiplied by the participant’s years of credited service limited to a maximum of 30 years. Early retirement benefits are available for persons who are eligible and elect to retire after attaining age 55 and completing 10 years of vesting service, or after attaining age 60. In the case of early retirement, benefits are reduced by .458% for each month preceding the participant attaining age 65.

The Company also maintains the Old Republic International Corporation Executive'sExecutives Excess Benefit Plan (“ORI Excess Benefit Plan”) to pro­vide certain key executives with pension benefits in excess of those provided by the Company Plan because of legal limitations that cap benefit payments. The ORI Excess Benefit Plan is administered by the Compensation Committee of the Board of Directors, which selected the employees to participate in this plan from those who are participants in the Company Plan. Mr. Zucaro is the only listed Executive Officer who qualified for participation under the ORI Excess Benefit Plan as this plan was closed to any additionalnew participants as of December 31, 2004. Further, the accrued benefits under this plan were frozen as of December 31, 2013 and no additional future benefits will accrue to Mr. Zucaro or others under it.

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Employees ofEffective January 1, 2014, the Old Republic National Title Group (“ORNTG”) who had been employed through year end 2003 participate in the Old Republic National Title Group PensionBaseline Security Plan (“ORNTG Plan”BSP”) instead ofwas established by the Company, in part, as a replacement for the Company Plan. The ORNTG Plan operatesEligibility for participation in the same basic fashion as the Company’s Plan except that benefits are calculated differently. The monthly benefitBSP is 1.20% of the participants Final Average Monthly Earnings upsimilar to the Social Security Integration Level, and 1.75% of the amount in excess of that level, times the participant’s years of credited service limited to a maximum of 30 years. Employees who joined ORNTG on or after January 1, 2004 are ineligible to participate in the ORNTG’s Plan but may be eligible to participate ineligibility under the Company’s 401(k) ESSOP.

Mr. Nard does not participate in The BSP is noncontributory by participants and no employee contributions are permitted under it except for IRA roll-over contributions. The BSP contributions will be performance-based with an emphasis on the long-term underwriting results of the Company. The annual contribution will be approved each year by ORI’s Board of Directors following the receipt of all pertinent audit reports for the Company, Plan, but does participate in the Republic Mortgage Insurance Company Profit-Sharing Plan and its individual subsidiaries and operating centers (“BSP Cells”), as profit sharing contributions will be performance-based on each BSP Cell. Any contribution will be characterized as a percentage of each eligible employee’s annual base salary. The initial base year for determining the Company’s ESSOP. Likewise, Mr. Rager does not participatecontribution to the BSP will be 2014. Following the Board of Directors’ approval of a contribution, if any, the first contributions under the BSP shall be allocated to participants’ accounts in the Company Plan, but does participate in the Great West Casualty Profit Sharing Plan (“GWC Profit Sharing Plan”) and the Company’s ESSOP. These plans are described in the following section.early 2015.

The following table sets forth the present value of the estimated benefits payable to an employee:Executive Officers under the above described pension plans.

Pension Benefits
Pension Benefits
 
Name
 
Plan Name
Number of
Years Credited
Service
Present Value of
Accumulated
Benefit (1)
Payments
During Last
Fiscal Year
Aldo C. ZucaroCompany Plan36.4$2,023,910-
 Excess Benefit Plan36.44,437,610-
Karl W. MuellerCompany Plan8.3243,226-
James A. KelloggCompany Plan36.81,605,056-
R. Scott RagerNone---
Rande K. YeagerCompany Plan26.61,317,076-
 
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
        33.4
        33.4
     $1,501,356
      3,291,864
-
-
Karl W. MuellerORI Employees Retirement Plan          5.3         107,963-
James A. KelloggORI Employees Retirement Plan        33.8      1,060,137-
Christopher S. NardNone            -  --
R. Scott RagerNone            -  --
Rande K. YeagerORNTG Pension Plan       23.6        880,475-

(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 year end 2010.2013.

Employees Savings and Stock Ownership Plan

Under the Company's 401(k) qualified ESSOP, employees'eligible employees who elect to participate may have their  savings, up to a maximum of 6%, are matched by employer contributions ranging from 20% to 140% of such savings in accordance with a formula based upon the percentages saved and the increase in the Company's average net operating earnings per share for the five years ending with the calendar year immediately prior to the year for which the contribution is made. The Company’s matching contribution applies to annual compensation up to a maximum of $150,000. For the year 2010, the Company’s match was set at 20% by this formula. Employees’ contributions are invested, at the employees’ direction, in a number of publicly-traded mutual funds, and employees may elect to purchase the Company’s Common Stock as an investment option. Employer contributions are invested exclusively in the stock of the Company. Employees with three or more years of service as of the prior years’ end may diversify the annual contribution of Company stock into alternative investments. Further, such employees may also diversify all of the prior contributions of Company stock at any time. The alternative investment choices include a number of publicly-traded stock and bond mutual funds. Employees may also change their investments from the alternate investments permitted into investments in the Company’s stock. However, the number of times an employee may change their investments into or out of the Company’s stock is annually limited. A participant becomes vested in the account balance allocated from employer contributions upon being totally and permanently disabled, dying, or upon the earlier of attaining age 65 or being employed for 6 years. Vesting also occurs in increments of 20% aper year, beginning after one year of ser­vice. Benefits are payable upon termination of service, death or disability, or following retirement and are subject to minimum distribution requirements set outforth in Treasury regulations under the Internal Revenue Code.  At the election of the participant, benefits derived from employer contributions are payable either in cash or the Company’s Common Stock.

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Mr. Nard participates inIn addition to the Company’s ESSOP, as well as in the RMIC Profit Sharing Plan, a 401(k) qualified plan. The RMIC Profit Sharing Plan covers substantially all employees of RMIC and its affiliates. Contributions to the plan are determined an­nually by RMIC's Board of Directors, and voluntary contributions of up to 10% of their RMIC annual income are permitted. There were no contributions made by RMIC in 2008, 2009 or 2010 based upon RMIC’s performance in 2007, 2008 and 2009. Employees’ contributions are invested, at the employees’ direction, in a number of publicly traded mutual funds and employees may elect to purchase the Company’s Common Stock as an investment option. RMIC Profit Sharing Plan participants' interests vest in increments of 10% of contributed amounts beginning with 40% after one year and ex­tending to 100% after seven years. Account balances are payable upon death or permanent disability. Normal retire­ment is at age 65 and the plan provides for early retirement at age 50 with ten years of service. Benefits upon retirement may be received as a monthly annuity, periodic cash payments, or in a lump-sum distribution, at the participant's election.

Mr. Rager participates in the Company’s ESSOP as well asparticipated in the GWC Profit Sharing Plan (“GWC Plan”) that was terminated on December 31, 2013 and the existing account balances of each GWC Plan participant were absorbed by with the BSP described above. While Mr. Rager had a balance with the GWC Plan, he has not received or made a contribution to the GWC Plan since joining the Company’s Senior Management in late 2007. The GWC Profit Sharing Plan iswas a 401(k) qualified plan, that coverssimilar to the Company’s ESSOP, and covered substantially all employees of GWC and its affiliates. UnderAs of January 1, 2014, no new participants were permitted to join the termsGWC Plan and existing GWC participants automatically became members of the Plan, employees may contribute up to 15% of their GWC pay on a pretax basis. Contributions are subject to an annual maximum which increases annually to reflect changesBSP while remaining eligible for participation in the cost of living. GWC matches 25% of the employees first 6% of contributions and at the discretion of GWC’s Board of Directors may make additional contributions as determined annually. Employees share in discretionary contributions on a proportional basis according to their earnings. Employees’ contributions are invested, at the employees’ direction, in a number of publicly traded mutual funds and employees may elect to purchase the Company’s Common Stock as an investment option. GWC Profit Sharing Plan participants’ interest vests in increments of 20% of the Company’s contributions after two years of service and are 100% vested after six years of service. Benefits are payable upon normal retirement at age 65 and earlier upon death or permanent disability. Upon retirement, a participant may elect a lump sum distribution or a direct rollover into an Individual Retirement Account.ESSOP.

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Other Benefits

The Company’s philosophy on compensation does not encompass the disbursement of significant values by way of perquisites or personal benefits to its Executive Officers and other employees. Such benefits, as are in fact provided, include the personal value attributed to the use of Company-supplied automobiles, the personal value of club memberships, and the value of personal meals. The value of these benefits to the CEO, CFO and other listed Executive Officers are shown in the “All Other Compensation” column of the Summary Compensation Table shown elsewhere in this proxy statement. The Company and most of its subsidiaries provide other employment benefits that are generally available to most other employees and include: 401(k) and profit sharing plans based on each subsidiary’s or operating unit’s profitability; group life insurance plans; group health insurance plans; paid holidays and vacations.

ITEM 3
VOTE ON EXECUTIVE COMPENSATION
VOTE ON EXECUTIVE COMPENSATION

Background

The Company is committed to full disclosure concerning compensation, transparent corporate governance and the interest that shareholders have in knowing the compensation philosophy of the Company. InAt the Company’s 2013 Shareholder Meeting, more than 98.5% of the shares voted to approve the Company’s executive compensation. However, in accordance with the Company’s desire to fully inform shareholders about the methods and amounts of executive compensation, and as prescribed by law and regulation, shareholders are again asked to endorse the Company’s handling of these matters by adopting the following resolution that is commonly called a “Say-on-Pay” proposal.

The Board of Directors and the Compensation Committee, in particular, review the elements of Company compensation each year. Special attention is devoted to the compensation of the Executive Officers and other senior members of the Company’s management. In general, the Company seeks to align executive compensation with shareholder value on an annual and long termlong-term basis through a combination of base pay, annual incentives and long-term incentives. The Company believes that its history of long-term growth over the last several decades is, in part, a result of its compensation programs that encourage a longer termlonger-term pursuit of growth goals, rather than short-term results. A more detailed review of those programs and the awards made during 20102012 to the Executive Officers of the Company are reported elsewhere in this proxy statement. Further, theThe Board of Directors and Compensation Committee believe the Company’s performance and executive compensation have been aligned and balanced with shareholder returns in recent years through the elimination or reduction in the amount of annualyears. Annual incentive or bonus compensation and stock option awards made to several Executive Officers and other senior members of management.management have been eliminated or reduced during several of those years in conformity with the Company’s financial results. This vote is not intended to address any one specific element of compensation or the compensation paid to any one individual. Rather, the resolution concerns the overall philosophy, makeup and amounts of compensation paid to Executive Officers as a group.

2013 Executive Compensation Vote

At the Company’s 2013 Annual Shareholder Meeting more than 98.5% of shares present voted to approve the Company’s executive compensation for 2012. The Compensation Committee and Board of Directors considered this vote when it reviewed executive compensation for 2013.

Proposed Resolution

Resolved, that the shareholders of the Company approve the compensation policies, practices and procedures as set forth in the Compensation Discussion and Analysis sectionssection of the Company’sthis proxy statement for its Executive Officers for the year 2010.2013.

Vote Required

This vote is required but is advisory and is not binding upon the Board of Directors. The vote is intended to be a measure of the shareholders’ overall approval of the handling of the Company’s Executive Compensation matters. Therefore, the vote will not result in a change or clawback of any existing or future compensation of any individual. Nor will this vote necessarily result in a change in the elements or compensation programs of the Company, as those decisions remain vested in the Board of Directors. However, if the shareholders fail to give this proposal a favorable vote, the Board of Directors and Compensation Committee shall investigate the reasons the resolution did not receive a majority vote. Further, this vote and will consider such votebe taken into consideration when future changes are considered in the elements of compensation, when compensation programs are adopted or changed, and when compensation amounts or incentive awards are approved for Executive Officers and the other senior members of the Company’s management. The results of thethis vote on this matter shall be disclosed in a filing made with the SEC shortly after the Annual Shareholders’ Meeting and will be available for review on the Company’s website, www.oldrepublic.com. It is currently anticipated that the next vote on a “Say-on-Pay” proposal shall occur in connection with the Company’s 2014 election of Directors.

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BOARD OF DIRECTORS’ RECOMMENDATION

The Board of Directors recommends a vote FOR this proposal. Proxies solicited by the Board of Directors shall be voted in favor of this proposal unless shareholders specify to the contrary in their proxies.
ITEM 4
FREQUENCY OF ADVISORY VOTE ON EXECUTIVE COMPENSATION
OTHER INFORMATION

Section 16(a) Beneficial Ownership Reporting Compliance

Background

The Board of Directors, as part of its commitment to transparency in corporate governance and executive compensation, has determined that submitting to shareholders a resolution to approve the Company’s compensation policies, practices and procedures concerning Executive Officers, commonly referred to as a “Say-on-Pay” proposal should be made periodically, and at least every three (3) years. To further enhance this procedure and as prescribed by law and regulation, the shareholdersSection 16(a) of the Company are asked to indicate their preference concerningSecurities Exchange Act of 1934 requires the frequency of these votes. Regardless of the frequency selected, the Company shall, at least every six years, unless the law or regulations concerning this matter are changed, have the opportunity to re-evaluate the frequency of voting on this issue.

Proposed Resolution

Resolved, that the shareholders of the Company shall vote on a resolution concerning the frequency of approving the Company’s compensation policies, practices and procedures concerning Executive Officers, commonly referred to as a “Say-on-Pay” proposal. The choices the shareholders may recommend are: every year, every two years, or every three years. Further, if the shareholder wishes, he or she may abstain on this matter.

Vote Required

This vote is required but is advisory and is not binding upon the Company or its Board of Directors with regard to the frequency of such a vote, provided the Company’s shareholders vote at least every three years on a “Say-on-Pay” resolution and the shareholders have an opportunity, at least every six years, to recommend the frequency of such votes. This vote is intended to serve as an indication of the frequency shareholders wish to address this issue. The Board of Directors and Compensation Committee believe a choice of voting on compensation matters every three years is appropriate, as the Company makes an effort to align compensation matters for its Executive Officers and other senior membersdirectors, and persons who own more than ten percent of the Company’s managementCommon Stock, to file reports of ownership and changes in the same manner as it evaluates its general business – using a long-haul approach. With this in mind, the choice receiving a plurality of votes shall be considered by the Board of Directors in determining the frequency of such votes. The results of the vote on this matter shall be disclosed shortly after the Annual Shareholders’ Meeting in a filing madeownership with the SECSEC. Based solely on reports and other information submitted by Executive Officers, directors and such other persons required to file, the Company believes that will be available for review throughduring the Company’s website at www.oldrepublic.com. Any action resulting from this vote shall be disclosed after the Board of Directors has had an opportunity to review and evaluate the vote on this matter. Such action shall be announced in a filing made with the SEC that will be available for review through the Company’s website. This filing will be made at least 60 days prior to the deadline for the submission of shareholder proposals (October 15). Further, it is currently anticipated that a vote on the frequency of having advisory votes on executive compensation shall occur in connection with the Company’s 2017 election of Directors.year ended December 31, 2013 all reports required by Section 16(a) have been properly filed.

BOARD OF DIRECTORS’ RECOMMENDATION

The Board of Directors recommends a vote for every three years for this proposal. Proxies solicited by the Board of Directors shall be voted in that manner unless shareholders specify one of the other options in their proxies.

Change of Control, Severance or Retirement

None of the Executive Officers have employment contracts, and all are considered “at-will” employees of the Company. Further, the Company has no change of control or severance agreements such as “golden parachutes” in place for any of its Executive Officers. However, the benefit plans referred to above would be affected, in limited ways, by a change of control of the Company. Such an event would not result in additional compensation or benefits being paid to any Executive Officer or employee for the Company. Rather, the effect would be to accelerate the vesting of benefits under these plans and require the immediate payment of all deferred balances under the Company’s Performance Recognition Plans.

The above notwithstanding, the Company and its Board of Directors retain the right to enter into employment contracts or institute golden parachute“golden parachutes” and similar benefits for its Executive Officers and other key employees immediately, and at any time as circumstances may warrant, to protect the Company’s business interests. There is no assurance, however, that any of the selected executives would agree to such contracts.

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Financial Restatement

The Company has adopted a policy that if it is ever required to prepare an accounting restatement due to a material noncompliance with any financial reporting requirement under the securities laws, it will attempt, to the extent permitted by law, to recover or clawback the excess incentive-based compensation received by each current or former Executive Officer during the three years preceding the required restatement, over what, if any, incentive compensation such officers would have received based on the accounting restatement.

Tax Deductibility of Compensation

Section 162(m) of the Internal Revenue Code of 1986, as amended, places a limit of $1,000,000 on the amount of compensation that the Company may deduct in any one year with respect to each of its five most highly paid Executive Officers. There is an exception to the $1,000,000 limitation for performance-based compensation meeting certain requirements. Annual cash incentive compensation and stock option awards generally are performance-based compensation meeting those requirements and, as such, are fully deductible. In light of the above rule, the Company has not adopted any policy with respect to compensation in excess of $1,000,000 being paid to Executive Officers.

Stock Ownership Guidelines

The Company encourages all of its employees to own Company stock directly or through employee benefit plans such as its 401(k) ESSOP. All of its Executive Officers and directors own shares of the Company’s stock. The Table on page 23 shows the nature and amount of such holdings.

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The Company has an equity ownership policy for its directors and senior officers. Pursuant to this policy, directors are required to acquire holdings in the Company’s Common Stock with a value of at least $250,000. This policy allows new directors three years during which to acquire such ownership, with the valuation of such stock based upon the greater of current market value attained at any point in time, or the original acquisition cost. All of the Company’s directors currently hold in excess of this requirement. For the most senior officers of the Company, the recommended value of Common Stock ownership is based upon the following multiples of the officer’s base salary:

CEO of the Company 6 times
President of the Company 4 times
Certain other senior officers of the Company and its subsidiaries 1.5 times

The value of all shares of Company Common Stock owned directly or held in employee benefit accounts by such officers, together with the value of deferred compensation accounts, are considered in meeting these objectives. Newly elected senior officers have five years to meet the pertinent requirement. Senior officers who are promoted to a position that suggests additional ownership of the Company’s Common Stock have three years from such promotion to meet the applicable requirement.


This proxy statement is filed by order of the Board of Directors.

        SPENCER LEROYSpencer LeRoy III
        Senior Vice President,
        General Counsel, and
        Secretary
Chicago, Illinois
April 15, 20112014

 
 
 
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