OLD REPUBLIC INTERNATIONAL CORPORATION EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN An Important Part Of Your Security Needs

Transcription

1 OLD REPUBLIC INTERNATIONAL CORPORATION EMPLOYEES SAVINGS AND STOCK OWNERSHIP PLAN An Important Part Of Your Security Needs

2 Contents Page Introduction 2 Definitions 3 Eligibility and Enrollment 4 Contributions 4, 5, 6 & 7 Limitations on Contributions 8 Investing Contributions 9 &10 Earnings 11 When You Receive Your Benefits 12 How You Receive Your Benefits 13 In Case You Die 14 Withdrawals 14 Vesting and Forfeitures 15 & 16 Amendment and Termination 17 Claims Appeals 18 For Your Reference 19 & 20

3 Introduction Your Old Republic International Corporation Employees Savings and Stock Ownership Plan is an important part of the benefits and security for you and your family. In this booklet, you ll learn about this benefit. We ll talk about eligibility and discuss some choices you ll have. And we ll consider how you can receive the benefits to which you re entitled. This Plan gives you a chance to participate in the Company s success and at the same time helps provide you with additional financial security, both now and in your retirement years. As you read about your Savings and Stock Ownership Plan, consider the key words: your Plan. This Plan is for you. Benefits are based in part on the Company s operating earnings - which are determined mainly by your efforts and those of your fellow employees. Thus these joint efforts to build the Company s earnings and the recognition given those earnings by the Stock Market have a direct effect on your Plan, and your resulting benefits. (Rev. 11/07) 2

4 Definitions Throughout the Plan, certain capitalized terms are used. These terms are defined as follows: Calculation Year means the calendar year immediately prior to the year for which contributions are being calculated. Committee means the Executive Committee of the Board of Directors, which has been appointed by the Company to administer the Plan. Company means Old Republic International Corporation. Company Stock means any shares of common stock of the Company. Discretionary Contributions means contributions, other than matching contributions, to the Plan by an Employer and allocated based upon your compensation. Employer means Old Republic International Corporation and its affiliates and subsidiaries that have adopted this Plan. You can receive from the Committee, upon written request, information as to whether a particular Employer has adopted the Plan. Hour of Service means each hour you are paid for, or entitled to payment, for the performance of duties for an Employer. You will also receive credit for service if you are paid while you are on an approved leave of absence (vacation, holiday, illness, layoff, jury duty, or military duty). You should note, however, that no more than 501 Hours of Service are required to be credited to you for any single continuous period in which you perform no duties. Also, an Hour of Service will not be credited for any payment made or due because of workers compensation, unemployment compensation, or medical insurance. Individual Contributions mean your contributions to the Plan. Matching Contributions mean contributions to the Plan made by an Employer which are computed and allocated based upon your Individual Contributions. Plan means the Old Republic International Corporation Employees Savings and Stock Ownership Plan, as amended from time to time. Plan Recordkeeper means Fidelity Investments. Year of Service means each 12-month period from January 1 through December 31 in which you complete 1,000 or more Hours of Service with an Employer. 3

5 Eligibility and Enrollment Contributions Generally, you will be eligible to enroll in the Plan upon your first date of employment. However, due to the coordination necessary between the payroll systems and the Plan custodian, Fidelity Investments, there may be a short delay until all of your records are updated. You will be provided with the necessary forms to enroll in the Plan by your Employer. At that time you ll be asked to designate a beneficiary(ies) and indicate whether you want to make Individual Contributions. Each participant has two contribution accounts in the Plan: an Individual Contribution Account and a Matching Employer Contribution Account. Individual Contribution Account Your Individual Contribution Account contains the contributions you make to the Plan, including your Salary Reduction Contributions and your Employee After-Tax Contributions. Your contributions are limited as described in this section and in the section titled Limitations on Contributions. Salary Reduction Contributions You can contribute between 1% and 100% of your compensation (limited to $225,000, as adjusted) to the Plan on a before-tax basis. These contributions will be known as Salary Reduction Contributions. The maximum amount of Salary Reduction Contributions you can make to the Plan in one year is limited by law. For 2007, the limit is $15,500. This maximum amount may increase in future years to reflect the changes in the cost of living. If you are age 50 or over, you may make additional catch-up contributions to the Plan. For 2007, the additional catch-up contribution permitted is $5,000. Employee After-Tax Contributions In addition to making before-tax, or Salary Reduction, Contributions to the Plan, you can contribute amounts to the Plan on an after-tax basis. Specifically, you can contribute from 1% to 100% of your compensation (limited to $225,000, as adjusted) on an after-tax basis to your Individual Contribution Account. When you have reached the maximum permitted Salary Reduction Contributions for a year, as described above, your contributions will automatically continue as Employee After-Tax Contributions. However, contributions are limited as described below in Limitations on Contributions. 4

6 Compensation Compensation generally includes base salary, sales-based commissions, bonuses, overtime pay and incentive compensation. Some items are excluded from compensation for purposes of the Plan, such as contributions to other plans of the Employers, car allowances, and amounts realized with respect to stock options. For purposes of making individual contributions to the Plan, your total compensation is limited to $225,000, which may be adjusted annually for cost-of-living increases. Other Details Your Salary Reduction and Employee After-Tax Contributions (together called Individual Contributions ), are withheld from your paycheck and credited to your Individual Contribution Account. If you want, you can increase or decrease the amount of your Individual Contributions. To do this, just notify the Plan Recordkeeper. The change will become effective beginning with the first payroll period following receipt and processing of the change request by the Plan Recordkeeper. Your own contributions will be allocated to your Individual Contribution Account shortly after the end of each payroll period. If you begin making Individual Contributions on the January 1 following your date of hire, but you do not actually become a participant because you do not work a sufficient number of Hours of Service, your Individual Contributions will be retained by the Plan, but you will not receive any Matching Employer Contributions for that year. Matching Employer Contribution Account Several items affect the balance in your Matching Employer Contribution Account: Matching Employer Contributions, Discretionary Contributions, forfeitures, earnings on accumulated matching employer contributions, and changes in the market value of the Old Republic stock in which matching contributions are invested. Also, if you have chosen to diversify a part of your accumulated matching employer contributions, the income and changes in the market value of alternate investments you have selected would also affect the balance in this account. Matching Employer Contributions Your Employer will make Matching Employer Contributions on your behalf every year, so long as: you complete 1,000 or more Hours of Service during the year; you were employed by your Employer on December 31 of that year, died or became fully disabled during the year, or retired during the year after age 65; the Company meets certain minimum profit objectives; and you have made Individual Contributions to the Plan during the year. Your Matching Employer Contribution will be allocated to your Matching Employer Contribution Account as of December 31 of each year. 5

7 The amount of your Matching Employer Contribution in any year is the product of your Matching Dollar Amount multiplied by your Matching Percentage where your: * Matching Dollar Amount is the sum of your Individual Contributions which you have made and not withdrawn during the year (up to 6% of your compensation); * Matching Percentage is based upon the percentage increase in average operating earnings per share. This percentage increase in average operating earnings per share is obtained by comparing the average operating earnings per share for the Company for the five years ending with the Calculation Year, with the same average for the five years ending the year prior to the Calculation Year. Operating earnings per share are determined pursuant to generally accepted accounting principles and are equal to net income per share exclusive of realized capital gains or losses. The Matching Percentage is set forth in the following schedule: Five Year Average % Increase in Operating Earning Per Share: Less than 6% to 9.01% to 15.01% to Over 6% 9% 15% 20% 20% Level of Voluntary Savings: Resulting Employer Matching Contribution on the first 6% of Employee Savings Up to 1.00% 30% 40% 65% 100% 140% 1.01% to 2.00% 28% 38% 63% 98% 138% 2.01% to 3.00% 26% 36% 61% 96% 136% 3.01% to 4.00% 24% 34% 59% 94% 134% 4.01% to 5.00% 22% 32% 57% 92% 132% 5.01% to 6.00% 20% 30% 55% 90% 130% 6.01% to None None None None None To show you how the above schedule works, let s look at the following example. Assume Tom Smith earned $25,000 in compensation from his Employer for the year. He decided to make Individual Contributions to the Plan of 6% of his compensation. Let s further assume there was an increase in average earnings per share of 16.5%. His Matching Employer Contribution is determined as follows: Individual Contributions $25,000 X 6% $1,500 Matching Percentage 90% The Matching Percentage is represented by the intersection of the column headed 15.01% to 20% (because the increase in earnings per share is 16.5%) and the line labeled 5.01% to 6.00% (because the sum of Individual Contributions for the current year totaled 6.00% of his compensation). His Matching Percentage is 90%. If Tom had not made Individual Contributions to the Plan in the current year, he would not receive any Matching Employer Contributions. Please note that Individual Contributions above 6.00% of your compensation are not eligible for Matching Employer Contributions. However, such contributions will be credited to your Individual Matching Contribution $1,350 6

8 Contribution Account and will be eligible to participate in earnings. Discretionary Contributions In addition to Matching Employer Contributions, Employers at their discretion may make additional contributions for any year. Such contributions will be allocated as of December 31st of each year to the Matching Contribution Account of employees that: completed 1,000 or more Hours of Service during the year, and that were employed on December 31st of that year, died or became fully disabled during the year, or retired during the year after age 65. The amount allocated to your Matching Employer Contribution Account will equal the same proportion that your compensation bears to the combined total compensation of all the participants who are entitled to share in your Employer s Discretionary Contribution for that year. Forfeitures Forfeitures from the accounts of other terminated employees (see page 15) will be allocated as of December 31st of each year to the Matching Employer Contribution Accounts of participants: who made Individual Contributions; completed 1,000 or more Hours of Service during the year; and were employed on December 31st of that year, died or became fully disabled during the year, or retired during the year after age 65. The amount of forfeitures allocated to your Matching Employer Contribution Account will equal the same proportion that your compensation bears to the combined compensation of the other participants who are entitled to share in forfeitures for that year. Maximum Compensation allowed in calculating the Matching Employer Contribution and allocating forfeitures is $150,000. 7

9 Limitations on Contributions Under the law there are limitations on the contributions that may be made or allocated to your accounts in any Plan Year. These limitations affect: (1) your Individual and Matching Employer Contributions, and (2) the total contributions to your accounts. Individual and Matching Employer Contributions The Internal Revenue Code prohibits the Plan from discriminating in favor of highly compensated employees. Highly compensated employees are employees who are either: 5% owners or, generally receive compensation of over $100,000 (such salary amount is adjusted for inflation in years after 2007). Individual and Matching Employer Contributions for highly compensated employees, as a percentage of compensation, generally cannot exceed the Individual and Matching Employer Contributions for other employees by more than a specified amount. If the Plan fails this test in any Plan Year, the Employer may reduce the Individual or Matching Employer Contributions to the Plan on behalf of highly compensated employees. If the Employer reduces your Individual Contributions, the reduced portion of such contributions shall be distributed to you, together with any income on such contributions. The Matching Employer Contribution associated with such reduced Individual Contributions will be forfeited and applied to reduce other Employer Contributions. Total Contributions The total of all contributions and forfeitures (but not earnings) allocated to your accounts in any calendar year may not exceed $45,000. The $45,000 limitation could be increased after 2007 by an annual cost of living factor. 8

10 Investing Contributions Your Individual Contribution Account is invested at your direction in the Funds approved by the Committee and described in the attached document entitled Reviewing Your ESSOP Investment Options as well as other documents you will receive periodically from the Plan Recordkeeper. These documents will be updated regularly to provide current information on available investments under the Plan. The Matching Employer Contribution Account is invested in the Old Republic Employer Matching Stock Fund. To transfer Individual Contributions among the Funds, you must make a request with the Plan Recordkeeper, via computer through the Fidelity Web site or via telephone through the Fidelity Retirement Benefits Line. Access information is provided on the last pages of this summary booklet. You may use the web site or phone line to request transfers up to 12 times per year. During each of these 12 sessions, you may transfer amounts among as many approved Funds as you wish. Your transfers will generally be effective as of the business day made. The Old Republic Employer Matching Stock Fund is invested in Company Stock. As of each business day, your Matching Employer Contribution Account will be credited with your proportionate share of any dividends from the Company Stock held in the Old Republic Employer Matching Stock Fund and will also be adjusted for expenses of the Old Republic Employer Matching Stock Fund and any increase or decrease in the value of the Company Stock. So, if the Company declares a cash dividend and its stock price increases, you will benefit accordingly. You ll have the voting rights of the number of shares allocated to your account. If you don t exercise your voting rights, the Committee has the authority to exercise them for you. Diversification For plan years beginning after December 31, 2006, you will be able to divest any of your own contributions invested in company stock and reinvest the proceeds in other Plan investment options. Company stock acquired with employer contributions, such as matching and profit sharing contributions, may be divested after you have completed three years of service, subject to the special phase-in rule discussed below. Special Phase-In Rule for Company Stock Acquired Prior to the Start of the 2007 Plan Year The Plan will phase in your right to divest company stock acquired with employer contributions prior to the start of the 2007 plan year. Your rights will be phased in over a three-year period, as described below: 2007: 33% of pre-2007 shares may be divested 2008: 66% of pre-2007 shares may be divested 2009: 100% of all shares may be divested The phase-in rule does not affect your right to diversify company stock acquired after the start of the 2007 plan year. In addition, if you are age 55 or older and have at least three years of service prior to the start of the 2007 plan year, you will not be subject the phase-in rule. Default Investment Fund For Employee Contributions/Rollovers When you make an election to contribute to the Plan, either as a salary withholding or as a rollover from a prior employer's qualified plan, and you do 9

11 not specify an investment fund to direct these moneys into, the Plan will deposit this money into a default fund. The default is a target dated fund based on your normal retirement date. At your direction Fidelity Investments will reallocate your balance from the default fund and or direct future contributions/rollovers to a specific fund of your choosing. ERISA Section 404(c) With respect to the amounts in your Individual Contribution Account as well as those amounts in your Matching Employer Contribution Account that you are eligible to diversify, as discussed above, the Plan gives you the flexibility to develop your own investment scheme. You will be responsible for investing these amounts subject to the terms of the Plan and rules and regulations adopted by the Committee. Neither the Committee nor the Trustees will pass upon the prudence of your investment choices. With respect to these amounts, the Plan is intended to constitute a plan described in section 404(c) of the Employee Retirement Income Security Act of 1974 and Title 29 of the Code of Federal Regulations Section c-1, and accordingly, fiduciaries of the Plan may be relieved of liability for any losses that are the direct and necessary result of investment instructions given by a Participant or beneficiary. 10

12 Earnings On each business day, each Fund receives an allocation of income or loss. The amount of income or loss is based upon the performance of each Fund during the current year. Once the income or loss for a Fund is calculated, it is allocated to your accounts based upon the proportion that your accounts invested in the Fund bears to total amounts invested in the Fund. 11

13 When You Receive Your Benefits Due to Retirement You are eligible to receive benefits when you retire due to age or disability. Your normal retirement date is your 65th birthday. If you continue working past this date, you may continue to participate in the Plan and earn benefits. Retirement due to a physical or mental disability begins when your Employer determines - based on an independent doctor s examination - that you are incapable of continuing your duties. Due to Termination/Resignation/Death If the vested balance in your accounts does not exceed $1,000, you may receive your vested balance within 90 days following the calendar year in which you terminate service. If the vested balance in your accounts exceeds $1,000 upon your termination or resignation, you will receive your vested balance within 90 days following the calendar year in which the latest occurs: your 65th birthday, the 10th anniversary of your participation in the Plan, or the date you terminate employment with all Employers. However, you may request distribution after you terminate service with all Employers. 12

14 How You Receive Your Benefits Individual Contribution Account Your Individual Contributions, which are invested in Funds other than the Old Republic Employer Matching Stock Fund will be paid to you in cash. You may elect to receive benefits in a lump sum distribution or in installments. If you elect the installment payment method, you will receive your balance in substantially equal installments spread over a period not to exceed the joint life expectancy of you and your designated beneficiaries. Matching Employer Contribution Accounts Your vested interest in your Matching Employer Contribution Account, which is invested in the Old Republic Employer Matching Stock Fund, will be paid to you either in cash or in stock, whichever you choose. If you choose cash, your benefits from the Old Republic Employer Matching Stock Fund will be paid to you in the same manner as benefits from the other Funds. If you choose to have your benefits from the Old Republic Employer Matching Stock Fund paid to you in stock, the balance in your Old Republic Employer Matching Stock Fund account shall be paid to you in Common Stock of Old Republic (based on the fair market value as of the date of distribution). Any remaining benefits from the Old Republic Employer Matching Stock Fund insufficient to purchase one share of the Company Stock will be paid to you in cash. Please note that if you choose to receive your benefits from the Old Republic Employer Matching Stock Fund in the form of Company Stock, your benefits will be paid to you in one distribution. Benefits payable in Company Stock cannot be made in installments. If you previously chose to diversify a portion of your Old Republic Employer Matching Stock Fund into the other Funds, the balance in these diversified funds will be paid in cash. Before your benefits start, you must notify the Plan Recordkeeper in writing - at the address indicated in this booklet - of the method by which you wish to have your benefits paid. Direct Rollover Option Benefits paid to you in a lump sum generally can be paid directly to an IRA or another qualified retirement plan. Payment to an IRA or qualified retirement plan will be made by giving you a check, issued in the name of the IRA or qualified plan you designate. 13

15 In Case You Die Withdrawals If you die before your benefit payments commence, your benefits will be paid to your beneficiary within 90 days following your death. In addition, if you elect installment payments and die before your benefits are completely paid out, the unpaid balance will go to your beneficiary. If you are married at the time of your death, your surviving spouse will automatically be your beneficiary unless you have designated another beneficiary and your spouse has consented to such a designation. The consent must be in writing, notarized by a notary or witnessed by a plan representative, and your spouse must acknowledge the effect of the consent. Should your beneficiary die before all the funds from your accounts are paid out, the remaining balance will be distributed to the other beneficiary(ies), if any. If there is no beneficiary living when you die, then the remaining balance will be paid to your estate. If your beneficiary is a minor or is legally disabled, the Committee, at its discretion, can: make payment to your beneficiary; make payment to a legal guardian; make payment to any relative to pay for the care, support or education of the beneficiary; or use the funds to provide such care, etc., to the beneficiary. Please note, if the Committee notifies you or your beneficiary(ies) that benefits are available, the benefits must be claimed within two calendar years after such notification or they will be distributed to one or more of your relatives, or your beneficiary s relatives, as determined by the Committee. If the Committee cannot locate an appropriate relative within three calendar years after notification, the participant s benefits will be forfeited. However, if an appropriate relative subsequently applies for the forfeited benefit, such benefit will be reinstated. You can make withdrawals while you re still actively at work in certain circumstances: Salary Reduction Contributions You may withdraw Salary Reduction Contributions in the event of an immediate and heavy financial hardship. The following are the only immediate and heavy financial hardships permitted under the Plan: medical expenses, purchase of a principal residence, payment of tuition for post-secondary education, or payments necessary to prevent the eviction from or foreclosure upon the participant s principal residence. If a hardship withdrawal request is granted, the amount withdrawn cannot exceed the amount required to relieve the financial hardship, including other withdrawals from the Plan. You may not withdraw the earnings on your account. If you withdraw Salary Reduction Contributions, you may not make Salary Reduction Contributions to the Plan for 6 months from the date of withdrawal. Employee After-Tax Contributions You may withdraw only Employee After-Tax Contributions that were not made during the current year. The minimum amount of a withdrawal is $500. General Withdrawal Rules You may withdraw amounts from your Individual Contribution Account only as described above. You may not withdraw amounts from your Matching Employer Contribution Account. You are limited to two withdrawals from your Individual Contribution Account per year. Withdrawals may be requested by contacting the Plan Recordkeeper, via computer through the Fidelity Web site or via telephone through the Fidelity Retirement Benefits Line. Access information is provided on the last pages of this summary booklet. 14

16 Vesting and Forfeitures In the language of benefit plans, vesting is an important word. It means your ownership rights to your accounts. You are always fully vested in your Individual Contribution Account and you are fully vested in your Matching Employer Contribution Account if you terminate service after your 65th birthday, death, or disability; or if you terminate employment for any other reason as long as you have completed six Years of Service. Vesting becomes very important if you terminate service before age 65 and before completing six Years of Service. We say this because the Plan has been designed to give you a percentage of your interest in your Matching Employer Contribution Account for each Year of Service you have completed - up to 100% as shown below. Years of Service Vested Interest 1 0% 2 20% 3 40% 4 60% 5 80% 6 100% Because of the method used by the Plan to count Hours of Service, for vesting purposes, you will earn a Year of Service in your first year of employment if you are a full-time employee and your employment date is prior to August 1, and in your last year of employment if your separation date is subsequent to May 31. Amounts in your Matching Employer Contribution Account which exceed your vested interest will be forfeited and redistributed to other participants at the end of the year at the close of the calendar year in which you terminate your service, as described on page 5. Break in Service A Break in Service is any calendar year in which you do not complete 501 Hours of Service with the Employer. Here s how this could effect your vesting. The unvested portion of your Matching Employer Contribution Account is forfeited upon your termination of service and re-allocated to other participants at the end of the year. If you are not fully vested upon termination of service, but are rehired by your Employer before incurring five consecutive one year Breaks in Service, you have a right to have the balance you forfeited restored to your accounts. This is accomplished by your repaying to the Plan any amount(s) which had been distributed to you after your departure. You must repay this amount before the earlier of: the date you incur five consecutive Breaks in Service following the distribution or the fifth anniversary of your rehire. If you are not fully vested upon termination of service, but are rehired before receiving a distribution from the Plan and before incurring five consecutive Breaks in Service, your Matching Employer Contribution Account will be restored in full without your being required to take any action. If you return to work after a Break in Service, you will once again participate in the Plan. When this happens, if you are partially or fully vested, you receive credit for any previous Years of Service (before the Break in Service). If you have no vested interest but return before incurring five consecutive Breaks in Service, you will also receive credit for any previous Years of Service. However, if you have no vested interest and incur five consecutive Breaks in Service, you forfeit your prior Years of Service. 15

17 NOTE: A calendar year in which you complete between 501 and 999 Hours of Service is not considered a Break in Service nor a Year of Service. Of course, if you complete 1,000 or more Hours of Service in a year, you will be credited with a Year of Service. If you are absent from employment because of pregnancy, because of birth or adoption of a child, or for the purpose of caring for a child immediately after its birth or adoption, you will receive credit in one year for a sufficient number of hours (not to exceed 501) to avoid a Break in Service. 16

18 Amendment and Termination Amendment The Plan may be amended at any time, including retroactively, by a resolution of the Board of Directors of the Company. No amendment to this Plan can retroactively reduce benefits already accrued to you, except when required to comply with an act of Congress or the Internal Revenue Code. Termination Although the Employers intend the Plan to be permanent, they reserve the right to terminate the Plan or discontinue contributions to the Plan at any time. Upon termination of the Plan or discontinuance of contributions, you will receive a lump sum distribution of your current account balances as soon as practicable. 17

19 Claims Appeal The Plan is designed to provide you with benefits automatically. It s unlikely that problems will arise. In all cases, the Plan is designed to provide you or your beneficiary with the benefits to which you are entitled. But, if for some reason, either you or your beneficiary don t receive the benefit to which you or your beneficiary are entitled, contact: Old Republic International Corporation ESSOP Administration Committee 307 North Michigan Avenue Chicago, Illinois (312) ext.4217 If your claim is denied, you or your beneficiary will receive a written explanation of the denial within 90 days. The denial will give: * Specific reason or reasons for the denial. If you fail to receive a written notice, your claim is deemed to be denied. If you or your beneficiary believe you are incorrectly denied a benefit, you may request a written review of your case. You must write to the Committee within 60 days of the date you received the denial, or within 150 days after you file a claim if your claim is deemed denied. Any such request should be accompanied by documents or records in support of your appeal. You have the right to review documents pertinent to your claim. Within 60 days (or 120 days in special circumstances) after receipt of your written appeal for review, the committee will notify you in writing of its final decision. If this period is extended, you will be notified within the first 60 days. This decision must contain specific reasons and reference to the Plan provisions on which the denial is based. * Specific reference to the Plan provisions on which the denial is based. * Description of additional information necessary for you to substantiate your claim and an explanation of why that information is necessary. * Information describing how to present a claim for review. 18

20 For Your Reference Here are some basic facts about the Plan and its administration. As a participant in the Plan, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). The Department of Labor describes these below. You may: * Examine, without charge, at the Plan administrator s office and at other specified locations, such as work sites, all Plan documents, including insurance contracts, collective bargaining agreements, and copies of all documents filed by the Plan with the U. S. Department of Labor, such as summary annual reports and Plan descriptions. * Obtain copies of all Plan documents and other Plan information upon written request to the Plan administrator. The administrator may make a reasonable charge for the copies. * Receive a summary of the Plan s annual financial report. The Plan administrator is required by law to furnish each participant with a copy of this summary annual report. * Obtain a statement telling the employee whether he has a right to receive a benefit under the Plan and, if so, what his benefit would be if he stops working under the Plan now. This statement must be requested in writing and is not required to be given more than once a year. The Plan must provide the statement free of charge. In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan, called fiduciaries of the Plan. These fiduciaries must operate the Plan prudently and in the interest of you and other Plan participants and beneficiaries. No one, including your employer, or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit or exercising your rights under ERISA. If your claim for a benefit is denied in whole or in part, you must receive a written explanation of the reason for the denial. You have the right to have the Plan review and reconsider your claim. Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request materials from the Plan and do not receive them within 30 days, you may file suit in federal court. In such a case the court may require the Plan administrator to provide the materials and pay up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court. If it should happen that Plan fiduciaries misuse the Plan s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous. If you have any questions about your Plan, you should contact the Plan administrator. If you have any question about this statement or about your rights under ERISA, you should contact the nearest office of the Pension and Welfare Benefits Administration, U.S. Department of Labor, listed in your telephone directory, or the Division of Technical Assistance and Inquiries, Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W., Washington D.C

21 Plan Sponsor The Plan has been established by the following Company, which is also the administrator of the Plan: Old Republic International Corporation 307 North Michigan Avenue Chicago, Illinois Financial Aspects The Plan is funded by contributions made by the Employers. These contributions, plus any employee contributions, go to the Plan trustee. Currently, the Plan trustee is: Inter Capital Company of Chicago 307 North Michigan Avenue Chicago, Illinois (312) ext Administration Day-to-day administration of the Plan is handled by the Plan Recordkeeper, Fidelity Investments. The Plan Recordkeeper s address is: Fidelity Investments Institutional Services Company, Inc. 82 Devonshire Street Boston, Massachusetts The telephone number of the Fidelity Retirement Benefits Line is (800) The Internet address for the Fidelity Web site is The Plan year begins on January 1 and ends on December 31. If you have any legal action against the Plan, process should be served on: Old Republic International Corporation ESSOP Administration Committee 307 North Michigan Avenue Chicago, Illinois (312) In addition, process may be served on the Plan administrator or Plan trustee. Plan Name The full name of the Plan is Old Republic International Corporation Employees Savings and Stock Ownership Plan. Government Filings Information regarding the Plan is to be filed with the United States Department of Labor under the Company s Employer Identification Number ( ) and Plan number. The Plan number for the Employees Savings and Stock Ownership Plan is 003. Be sure to use these numbers in any government-related correspondence about the Plan. The Plan is a defined contribution Plan, which means that certain amounts are defined in advance as contributions. Your benefits are provided from individual accounts; therefore, those benefits are not insured by the Pension Benefit Guaranty Corporation, a federal organization that insures certain kinds of pension benefits. Please note, the contents of this booklet are a guide to help you better understand your Employees Savings and Stock Ownership Plan. If there is an inadvertent conflict between the actual provisions of the Plan and this summary, the Plan document will control. 20