As in effect
3/1/61
FORM 10K/A
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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AMENDMENT TO APPLICATION OR REPORT
Filed Pursuant to Sections 12, 13, or 15 (d) of
THE SECURITIES EXCHANGE ACT OF 1934
OLD REPUBLIC INTERNATIONAL CORPORATION
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(Exact name of registrant as specified in charter)
AMENDMENT NO. 3
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The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its ANNUAL REPORT FOR 2002 on Form
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10-K as set forth in the pages attached hereto: (List all such items, financial
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statements, exhibits or other portions amended)
FORM 11-K
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
OLD REPUBLIC INTERNATIONAL CORPORATION
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(Registrant)
Date: May 5, 2003 By: /s/ John S. Adams
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(Signature)
John S. Adams
Senior Vice President and
Chief Financial Officer
Total Pages: 12
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
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ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For The Years Ended December 31, 2002 and 2001
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BITUMINOUS 401(k) SAVINGS PLAN
(Formerly Known as BITCO Savings Plan)
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OLD REPUBLIC INTERNATIONAL CORPORATION
307 NORTH MICHIGAN AVE
CHICAGO, ILLINOIS 60601
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Committee Members have duly caused this annual report to be signed on behalf of
the undersigned, thereunto duly authorized.
BITUMINOUS 401(K) SAVINGS PLAN, Registrant
By /s/ Greg Ator
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Greg Ator, Committee Member
By /s/ Janine Happ
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Janine Happ, Committee Member
By /s/ Robert Rainey
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Robert Rainey, Committee Member
Dated: April 15, 2003
BITUMINOUS 401(k) SAVINGS PLAN
Index to Financial Statements
Page No.
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Benefits at
December 31, 2002 and 2001 2
Statements of Changes in Net Assets Available for Benefits
for the years ended December 31, 2002 and 2001 3
Notes to Financial Statements 4 - 7
Supplemental Schedule:
Schedule of Assets (Held at End of Year) 8
Report of Independent Accountants
To the Participants and Administrator of the
Bituminous 401(k) Savings Plan:
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Bituminous 401(k) Savings Plan (the "Plan") at December 31, 2002 and
2001, and the changes in net assets available for benefits for the years then
ended in conformity with accounting principles generally accepted in the United
States of America. These financial statements are the responsibility of the
Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. This
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ PricewaterhouseCoopers, LLP
April 4, 2003
Chicago, Illinois
BITUMINOUS 401(k) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2002 and 2001
2002 2001
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ASSETS
Investments, at fair value:
Old Republic International Corporation (ORI) common stock $4,935,427 $ 5,643,446
Pooled separate accounts 9,751,089 9,820,081
Participant loans 306,128 309,172
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14,992,644 15,772,699
Cash - 1,082
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Net assets available for benefits $14,992,644 $15,773,781
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The accompanying notes are an integral part of these financial statements.
2
BITUMINOUS 401(k) SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
For the years ended December 31, 2002 and 2001
2002 2001
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Additions:
Contributions:
Employer $192,123 $187,223
Employee 1,004,889 931,048
Rollover 16,946 444,510
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Total contributions 1,213,958 1,562,781
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Investment income (loss):
Dividends from ORI common stock 117,816 131,557
Net investment loss from pooled separate accounts (1,355,807) (474,465)
Net appreciation (depreciation) of the ORI stock account 68,038 (1,003,903)
Interest from participant loans 23,855 23,333
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Total investment loss (1,146,098) (1,323,478)
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Other income:
Total other income - 45
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Total additions 67,860 239,348
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Deductions:
Benefits paid to participants 833,969 901,456
Administrative expenses 8,841 9,986
Participant loans 6,186 6,039
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Total deductions 848,996 917,481
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Net decrease (781,136) (678,133)
Net assets available for benefits:
Beginning of year 15,773,781 16,451,914
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End of year $14,992,644 $15,773,781
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The accompanying notes are an integral part of these financial statements.
3
BITUMINOUS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. Description of Plan
The following description of the Bituminous 401(k) Savings Plan (the
"Plan") provides only general information. Participants should refer to
the Plan document for a more complete description of the Plan's
provisions.
A. General
The Plan is a defined contribution plan covering substantially all of
the employees of Bituminous Casualty Corporation (the "Company"), who
prior to October 1, 1997, had completed one year of service, attained
age twenty-one and had completed 1,000 hours of service during the 12
month period commencing on their date of hire or during a plan year.
Subsequent to October 1, 1997, employees are eligible to participate in
the plan on the last to occur: (A) date of hire or (B) the start of the
payroll period in which the employee attains age twenty-one.
Participation in the Plan is optional. If an employee does not elect to
join the Plan on the first date he/she is eligible to do so, he/she may
join the plan at the start of any subsequent payroll period. The Plan
is subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA), as amended.
B. Contributions
Participants may contribute up to 9 percent of their annual
compensation on a before-tax basis. The Company provides a matching
contribution equal to 25 percent of the participant's contribution on
the first 6 percent of earnings. Participants may elect to have their
voluntary contributions invested in any one or more of the ten Pooled
Separate Accounts as well as the ORI Stock Account.
C. Participant Accounts
Each participant's account is credited with the participant's
contributions, an allocation of the Company's contribution and Plan
earnings. The Pooled Separate Accounts are each divided into units of
participation. When an amount is allocated or transferred to the Pooled
Separate Accounts, the number of units is increased and when an amount
is withdrawn from the Pooled Separate Accounts, the number of units is
decreased. Such increase or decrease in the number of units is
determined by dividing the amount allocated to or withdrawn from the
Pooled Separate Accounts by the then current Pooled Separate Account
unit value. Cash dividends received with respect to Old Republic
International Corporation stock previously credited to participants
shall be applied to purchase additional shares of Old Republic
International Corporation stock in the ORI Stock Account. Such
dividends and the additional shares (including fractional shares)
subsequently purchased with the dividends shall be allocated and
credited to the accounts of participants, pro rata, according to the
shares (including fractional shares) credited to the accounts of
participants on the applicable dividend record date. Any Old Republic
International Corporation stock received as a stock split or stock
dividend or as a result of a reorganization or recapitalization of Old
Republic International Corporation shall be allocated and credited to
the accounts of participants in proportion to the Old Republic
International Corporation stock previously credited to their accounts.
4
BITUMINOUS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. Description of Plan (continued)
D. Vesting
Participants are immediately vested in their voluntary contributions
plus actual earnings thereon. Participants are immediately vested in
the remainder of their accounts upon death, disability, attainment of
normal retirement age or based on the participant's number of years of
service using the following table for the years ended December 31, 2002
and 2001:
Years of Service Vested Percentage
2002 2001
Fewer than 1 0% 0%
1 10% 10%
2 20% 20%
3 40% 30%
4 60% 40%
5 80% 60%
6 100% 80%
7 or More 100% 100%
E. Payment of Benefits
On termination of service, retirement, or death, a participant or
his/her beneficiary may elect to leave funds in the Plan or receive
either a single-sum payment or purchase of a single premium life
annuity contract. Net assets at December 31, 2002 and 2001, include
funds totaling $2,599,793 and $1,890,724, respectively, which represent
the account balance of retired and terminated participants who have
elected to leave the funds in the Plan upon retirement or termination.
F. Forfeitures
All forfeitures are segregated annually. At that time, forfeitures are
used as an offset to the Company's matching contribution. There were
unallocated assets of $14,708 and $7,098 at December 31, 2002 and 2001,
respectively, related to these forfeitures.
G. Participant Loans
Participants may elect to borrow from their accounts a maximum amount
equal to the lesser of $50,000 or 50% of their vested account balance.
Loan transactions are treated as a transfer to (from) the investment
account from (to) the Participant Loans account. Loan terms shall not
extend beyond five years. The loans are secured by the balance in the
participant's account and bear interest at a rate which is based on the
prevailing prime rate as published in The Wall Street Journal on the
first business day of the month in which the loan is made plus one
percentage point. Interest rates range from 5.25 percent to 10.50
percent. Principal and interest is paid ratably through bi-weekly
payroll deductions.
H. Administrative Expenses
It is the policy of the Company to provide administrative support for
the Plan and to pay for certain administrative and trustee fees.
5
BITUMINOUS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies
A. Basis of Accounting
The accompanying financial statements have been prepared on the accrual
basis of accounting. The Plan presents in the statements of changes in
net assets available for benefits the net appreciation (depreciation)
in the fair value of the ORI Stock Account, which consists of realized
gains or losses and the unrealized appreciation (depreciation) of this
investment.
B. Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of net assets available for benefits and disclosures of
contingent assets and liabilities at the date of the financial
statements and the changes in net assets available for benefits during
the reporting period. Actual results could differ from those estimates.
C. Risks and Uncertainties
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds, and other
investment securities. Investment securities are exposed to various
risks, such as interest rate, market and credit. Due to the level of
risk associated with certain investment securities and the level of
uncertainty related to changes in the value of investment securities,
it is possible that changes in risks in the near term could materially
affect participants' account balances and the amounts reported in the
statements of net assets available for benefits and the statements of
changes in net assets available for benefits.
D. Investments
Old Republic International Corporation stock is stated at the closing
market value on the last business day of the year.
The Plan has a group annuity contract with Connecticut General Life
Insurance Company (CGLIC), where CGLIC maintains contributions in a
contract holder's account and such contributions are allocated to ten
Pooled Separate investment funds according to participant elections.
The accounts are credited with earnings on the underlying investments
and charged for Plan benefits paid and deductions for investment
expenses, risk, profit and annual management fees charged by CGLIC. The
Pooled Separate Accounts are included in the financial statements at
fair value at December 31, 2002 and 2001, as reported to the Plan by
CGLIC. Realized investment gains and losses in the separate investment
funds are recognized in the year of sale.
6
BITUMINOUS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
3. Assets Greater Than 5% of Plan Assets
Investments that represent 5% or more of plan assets at December 31,
2002 and 2001, are as follows:
December 31,
2002 2001
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S&P 500 Index $1,137,295 $1,343,841
Timessquare Short-term Bond Fund 3,391,837 3,067,389
Balanced 1 Wellington Management Fund 1,309,991 1,493,716
Large Cap Value John A. Levin & Co. Fund 1,045,037 1,183,050
ORI Stock Account 4,935,427 5,643,446
4. Tax Status
The Internal Revenue Service has issued a determination letter, dated
May 29, 2002, stating that the Plan is designed in accordance with
applicable sections of the Internal Revenue Code (IRC). The Plan has
been amended since receiving the determination letter. However, the
Plan's Committee Members still believe that the Plan is designed and is
currently being operated in compliance with the applicable requirements
of the IRC.
5. Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contribution at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
plan termination, participants shall become 100 percent vested in their
accounts and are entitled to a distribution of their account balances.
6. Related-Party Transactions
The ORI stock account is invested in common or preferred stock of Old
Republic International Corporation, the ultimate parent of the Company.
7. Plan Amendments
Effective, July 5, 2001, participants could transfer any or all of
their company matching account balance into any of the available
investment options. Company matching contributions are invested the
same as participant investment elections for their contributions. In
addition, the ORI Stock Account is available as an investment election
for employee contributions. Prior to July 5, 2001, participants'
company match contributions were invested entirely in the ORI Stock
Account.
7
BITUMINOUS 401(K) SAVINGS PLAN
SUPPLEMENTAL SCHEDULE
SCHEDULE H, LINE 4I
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
Description of investment Contract/
Identity of issue including interest rate current value
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S&P 500 Index Pooled separate account $1,137,295
Timessquare Short-term Pooled separate account 3,391,837
Bond Fund
Balanced I Pooled separate account 1,309,991
Wellington Management Fund
Large Cap Growth Pooled separate account 422,393
Goldman Sachs Fund
Large Cap Value Pooled separate account 1,045,037
John A. Levin & Co. Fund
Small Cap Value Pooled separate account 714,747
Berger Fund
Small Cap Growth Pooled separate account 480,276
Timessquare Fund
Global Value Pooled separate account 199,806
Morgan Stanley Fund
State Street Global Advisor Pooled separate account 536,625
Interm Bond
Invesco Dynamics Pooled separate account 513,082
ORI Stock Account Common stock 4,935,427
Participant loans, interest
rates range from
5.25% to 10.50% 306,128
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Total assets held for investment purposes $14,992,644
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