Executive Committee Charter
EXECUTIVE COMMITTEE CHARTER
(Updated May 6, 2014)
The Executive Committee (the "Committee") shall consist of not less than three (3) and not more than six (6) members inclusive of the Company's Chairman and Chief Executive Officer ("CEO") who serves in accordance with the Company's Corporate Governance Guidelines. The Chairman of the Board of Directors (the "Board") shall also be the Chairman of the Committee. An exception to this policy can, however, occur temporarily in unusual circumstances or during transitions of authority. All other Committee members shall qualify as non-management, independent directors. The Committee's members shall be appointed by the Board, and may be removed singly or in multiples by a majority vote of the Board.
The Committee shall exercise the authority and carry out the functions of the Board whenever the Board is not meeting and such action is necessary or beneficial for the conduct of the Company's business, except that the Committee shall not remove any director or appoint any director to fill a vacancy in the Board.
In addition, the Committee shall also have the duty and authority to address the matters and perform the functions noted in paragraphs (1) through (7) herein and make the necessary recommendations with respect to any action relative to such matters to the entire Board or appropriate committees thereof. In its capacity, the Committee will exercise its primary functional responsibilities for Finance, Management Development and Succession, Enterprise Risk Management and Employee Benefits Plans oversight. These include:
1. Serve as the Finance Committee of the Board of Directors with responsibility for reviewing, at least annually, such matters as:
a. the independent agencies' ratings of the financial strength of the Company and its Insurance subsidiaries' coupled with the financing and operating implications of these ratings;
b. the appropriateness of the Company's capital structure along with its borrowing and equity financing capacities;
c. The Company's near-term and intermediate-term estimated financing plans and their feasibility, including any restrictions in existing financing agreements, as well as the adequacy of the Company's shelf or similar registration statements with the SEC;
d. the Company's annual operating budget and corporate strategy, including capital allocations to all subsidiaries and business centers, and any necessary funding to execute on the budget and plans. Such plans will encompass:
i) major policy or strategic changes in the Company's direction;
ii) major changes in the manner or kind of business done by the Company and its subsidiaries;
iii) major sales, acquisitions or establishment of new businesses by the Company or any of its subsidiaries, and
iv) major changes in the organizational structure of the Company and its subsidiaries;
e. the investment policies of:
i) the Company and its subsidiaries, and for
ii) all significant pension and profit-sharing plans of the Company and its subsidiaries;
f. the CEO's maximum dollar authority relative to investments in a single issuer, investment pool, or acquisition of a business or other assets by the Company and/or any subsidiary;
g. analysis of contemplated acquisitions or divestitures of businesses or assets by the Company or its subsidiaries and, as appropriate, proposed Board actions;
h. corporate dividend policy and, at least on a quarterly basis, recommended dividend payouts and related funding sources;
i. recommendations regarding repurchase of the Company's stock or other securities;
2. Regularly review management development plans to provide for available and qualified successors to the most senior executive ranks of the Company and its subsidiaries as they become needed, and to provide for the temporary replacement of the Chairman and/or CEO in the event of his or her death or incapacity;
3. Evaluate the Company's Enterprise Risk Management ("ERM") processes at least annually, and review, on at least a quarterly basis, changes reported by the CEO relative to any significant ERM principles and practices for the Company and its subsidiaries, and plan for periodic ERM updates to the Board as necessary and appropriate;
4. Function as the Corporate Pension and Administration Committee with respect to the:
a) Old Republic International Employees Retirement Plan,
b) Old Republic International Corporation Amended and Restated Executives Excess Benefits Pension Plan,
c) Old Republic International Corporation Employee Savings and Stock Ownership Plan;
d) Old Republic Baseline Security Plan;
5. At least once each year, review and make any necessary and appropriate recommendations to the Nominating Committee regarding membership in the Board and its Committees.
6. Review at least annually the continuing adequacy of this Charter, and recommend any proposed changes to the Board for approval;
7. Conduct an annual self-evaluation.
The Committee Chairman will regularly report to the Board of Directors on the deliberations of the Committee. The Committee's interim decisions, like those of any other Board Committee, will be submitted for approval by the full Board by no later than the next regular meeting of the Board of Directors.