SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
MARKEL CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
( ) $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
[MARKEL LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF MARKEL CORPORATION:
Notice is hereby given that the 1995 Annual Meeting of Shareholders of
Markel Corporation (the "Company") will be held at the Jefferson Hotel, Franklin
& Adams Streets, Richmond, Virginia, on Wednesday, May 17, 1995, starting at
4:30 p.m.
The purposes for which the meeting is being held are:
1. To elect a Board of Directors consisting of eight persons to serve for
the ensuing year;
2. To ratify or reject the selection by the Board of Directors of KPMG Peat
Marwick, LLP as the Company's independent auditors for the year ending December
31, 1995; and
3. To transact such other business as may properly come before the meeting.
It is important that your shares be represented and voted. Shareholders,
whether or not they expect to attend the meeting in person, are requested to
date, sign and return the accompanying proxy card in the envelope provided, on
which no postage is needed if mailed in the United States.
A copy of the Company's Annual Report to Shareholders for the year ended
December 31, 1994 is being mailed to you with this Notice and the Proxy
Statement.
You are cordially invited to attend the meeting.
By Order of the Board of Directors
Leslie A. Grandis
SECRETARY
April 6, 1995
<PAGE>
[MARKEL LOGO]
4551 Cox Road
Glen Allen, Virginia 23060
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 17, 1995
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Markel Corporation (the "Company") for use at the Annual Meeting of
Shareholders of the Company to be held May 17, 1995, or any adjournments
thereof, for the purposes set forth in this Proxy Statement and the attached
Notice of Annual Meeting of Shareholders. This Proxy Statement and the related
form of proxy are first being mailed to the shareholders of the Company on or
about April 6, 1995. The Board of Directors has fixed the close of business on
March 31, 1995, as the record date for the determination of shareholders
entitled to notice of and to vote at the meeting and any adjournments thereof.
Each holder of record of the Company's Common Stock, no par value (the "Common
Stock"), on the record date will be entitled to one vote for each share then
registered in his or her name with respect to each matter properly brought
before the meeting. As of the close of business on the record date, 5,388,076
shares of Common Stock were outstanding and entitled to vote at the meeting.
If sufficient proxies are not returned in response to this solicitation,
supplementary solicitations may also be made by mail or by telephone, telegraph
or personal interview by directors, officers and regular employees of the
Company, none of whom will receive additional compensation for these services.
The Company reserves the right to retain an outside proxy solicitation firm to
assist in the solicitation of proxies, but at this time does not have plans to
do so. Costs of solicitation of proxies will be borne by the Company, which will
reimburse banks, brokerage firms and other custodians, nominees and fiduciaries
for reasonable out-of-pocket expenses incurred by them in forwarding proxy
materials to the beneficial owners of shares held by them.
The shares represented by all properly executed proxies received by the
Secretary of the Company and not revoked as herein provided will be voted as set
forth herein, unless the shareholder directs otherwise in the proxy, in which
event such shares will be voted in accordance with such directions. Any proxy
may be revoked at any time before the shares to which it relates are voted,
either by written notice (which may be in the form of a substitute proxy bearing
a later date delivered to the secretary of the meeting) or by attending the
meeting and voting in person.
April 6, 1995
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table and footnotes set forth information with respect to
beneficial ownership of equity securities of the Company as of January 31, 1995,
by (i) each director; (ii) each executive officer named in the Summary
Compensation Table; (iii) each person known to the Company to be the beneficial
owner of more than 5% of its outstanding Common Stock and (iv) all directors and
executive officers as a group. Except as otherwise indicated, each of the
persons named below has sole voting and investment power with respect to the
shares of Common Stock beneficially owned by that person.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
COMMON
NAME STOCK PERCENT
<S> <C> <C>
Anthony F. Markel.............................................. 434,6791 8.02%
4551 Cox Road
Glen Allen, VA 23060
Gary L. Markel................................................. 358,4842 6.65%
9700 Ninth Street North
St. Petersburg, FL 33702
Steven A. Markel............................................... 536,5003 9.90%
4551 Cox Road
Glen Allen, VA 23060
Alan I. Kirshner............................................... 189,1914 3.48%
Leslie A. Grandis.............................................. 15,6005 *
Stewart M. Kasen............................................... 8,7036 *
Darrell D. Martin.............................................. 70,2337 1.30%
V. Prem Watsa.................................................. 6,0008 *
All directors and executive officers as a group................ 1,619,3909 29.23%
</TABLE>
* Less than 1% of class.
1 Includes 31,216 shares represented by options granted under the Company's
1986 Stock Option Plan which may be exercised within sixty days of January 31,
1995. Excludes 6,000 shares held by Mr. Markel's wife as to which shares he
disclaims beneficial ownership. Excludes 63,000 shares held as co-trustee for
the benefit of Mr. Kirshner's children as to which he disclaims beneficial
ownership.
2 Includes 6,000 shares represented by options granted under the Company's
Stock Option Plan for Non-Employee Directors which may be exercised within sixty
days of January 31, 1995. Excludes 25,000 shares held as co-trustee for the
benefit of Mr. Anthony F. Markel's children as to which he disclaims beneficial
ownership.
3 Includes 31,216 shares represented by options granted under the Company's
1986 Stock Option Plan which may be exercised within sixty days of January 31,
1995. Excludes 114,726 shares held as co-trustee for the benefit of the Estate
of Lewis C. Markel as to which he disclaims beneficial ownership. Excludes
27,000 shares held as executor of the Estate of Stanley B. Markel as to which he
disclaims beneficial ownership. Also excludes 89,500 shares held as co-trustee
for the benefit of Mr. Kirshner's children as to which he disclaims beneficial
2
<PAGE>
ownership. Excludes 25,000 shares held as co-trustee for the benefit of Mr.
Anthony F. Markel's children as to which he disclaims beneficial ownership.
Includes 1,000 shares owned by Steven Markel's minor children.
4 Includes 42,000 shares represented by options granted under the Company's
1986 Stock Option Plan which may be exercised within sixty days of January 31,
1995. Excludes 136 shares held by Mr. Kirshner's wife as to which he disclaims
beneficial ownership.
5 Includes 6,000 shares represented by options granted under the Company's
Stock Option Plan for Non-Employee Directors which may be exercised within sixty
days of January 31, 1995. Excludes 400 shares held by Mr. Grandis' wife and 600
shares held by Mr. Grandis' children as to which shares he disclaims beneficial
ownership.
6 Includes 6,000 shares represented by options granted under the Company's
Stock Option Plan for Non-Employee Directors which may be exercised within sixty
days of January 31, 1995.
7 Includes 24,000 shares represented by options granted under the Company's
1986 Stock Option Plan which may be exercised within sixty days of January 31,
1995.
8 Includes 6,000 shares represented by options granted under the Company's
Stock Option Plan for Non-Employee Directors which may be exercised within sixty
days of January 31, 1995. Excludes 10,000 shares owned by Fairfax Financial
Holdings Limited or its subsidiaries of which Mr. Watsa is the Chairman of the
Board, as to which he disclaims beneficial ownership.
9 Includes 152,432 shares represented by options granted under the
Company's 1986 Stock Option Plan and the Company's Stock Option Plan for
Non-Employee Directors which may be exercised within sixty days of January 31,
1995. Excludes 273,362 shares as to which beneficial ownership is disclaimed.
ELECTION OF DIRECTORS
NOMINEES
A board of eight directors is to be elected at the meeting to serve until
the next annual meeting of shareholders and the election and qualification of
their successors. The Company's Board of Directors presently consists of the
eight directors who are named below as nominees, all of whom were elected at the
1994 annual meeting of shareholders.
Each of the nominees has consented to his being named as a nominee in this
Proxy Statement, has agreed to serve if elected, and has furnished to the
Company the information set forth in the table on the following page with
respect to his age as of January 31, 1995 and his principal occupation or
employment.
It is expected that each of the nominees will be able to serve, but in the
event that any such nominee is unable to serve for any reason (which event is
not now anticipated), the proxies reserve discretion to vote or refrain from
voting for a substitute nominee or nominees.
Shareholders may withhold authority to vote for any of the nominees on the
accompanying proxy. In the election of directors, those receiving the greatest
number of votes will be elected even if they do not receive a majority.
Abstentions and broker non-votes will count towards a quorum but will have no
effect on any action taken at the meeting.
3
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE, POSITIONS WITH THE COMPANY
OR PRINCIPAL OCCUPATION FOR PAST DIRECTOR
FIVE YEARS, AND OTHER INFORMATION SINCE
<S> <C>
ALAN I. KIRSHNER, 59 1978
Chairman of the Board of Directors and Chief Executive Officer since
September 1986. President from 1979 to March 1992.
ANTHONY F. MARKEL, 52 1978
President and Chief Operating Officer since March 1992. Executive Vice
President from 1979 to March 1992.
STEVEN A. MARKEL, 46 1978
Vice Chairman since March 1992. Treasurer from October 1986 to August 1993.
Executive Vice President from October 1986 to March 1992. Director of
Fairfax Financial Holdings Limited; Morden & Helwig Group, Inc.; AVEMCO
Corporation
DARRELL D. MARTIN, 46 1991
Executive Vice President and Chief Financial Officer since March 1992.
Chief Financial Officer since 1988. Partner, KPMG Peat Marwick from 1984 to
1988.
LESLIE A. GRANDIS, 50 1987
Secretary since February 1989. Partner, McGuire, Woods, Battle & Boothe,
LLP, Richmond, Virginia, attorneys-at-law, since 1974. Director of
Cornerstone Realty Income Trust, Inc.; CSX Trade Receivables Corporation.
STEWART M. KASEN, 51 1987
Chairman since January 1994 and President and Chief Executive Officer, Best
Products Co., Inc., Richmond, since June, 1991; President and Chief
Operating Officer, Best Products Co., Inc. from October 1989 to June, 1991.
Director of Best Products Co., Inc; Spreckles, Inc. Best Products, Inc.
filed a petition in bankruptcy on January 4, 1991 and successfully
reorganized and emerged from bankruptcy proceedings on June 14, 1994.
GARY L. MARKEL, 48 1978
President, Gary Markel & Associates, Inc., Tampa, Florida, an independent
insurance agency since December 1984. President, Gary Markel Safety
Services, Inc., an independent loss control service company since May 1985.
President, Gary Markel Surplus Lines Brokerage, Inc.
V. PREM WATSA, 44 1987
Partner, Hamblin, Watsa Investment Counsel Limited, Toronto, Canada,
investment advisors, since September 1984. Chairman and Chief Executive
Officer, Fairfax Financial Holdings Limited, Toronto, Canada, since
September 1985. Director of Fairfax Financial Holdings Limited; Morden &
Helwig Group, Inc.; FCA International.
</TABLE>
4
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board of Directors has a Compensation Committee and an Audit Committee.
The Company does not have a nominating committee.
Messrs. Grandis, Kasen and Watsa are members of the Audit Committee of
which Mr. Watsa is Chairman. The Audit Committee has responsibility for
recommending to the Board of Directors the firm of independent auditors to be
engaged by the Company; reviewing with the Company's independent auditors the
scope and results of their audits and their independence with respect thereto;
reviewing with the independent auditors and management the Company's accounting
and reporting principles, policies and practices; and reviewing the adequacy of
the Company's accounting and financial controls.
During 1994 the Board of Directors held four meetings, and there were two
meetings of the Compensation Committee and two meetings of the Audit Committee.
All directors attended seventy-five percent or more of the aggregate of the
number of meetings of the Board of Directors and the total number of meetings of
the Committees of the Board on which they served except Mr. Watsa who was unable
to attend one Board Meeting and Committee Meetings which were held on the same
day as the Board Meeting.
COMPENSATION OF DIRECTORS
Each non-employee director received for services as a director during 1994
an annual fee of $6,000, plus $1,000 for each director's meeting attended and
reimbursement of expenses incurred in connection with attending meetings.
Non-employee directors are also eligible to participate, up to the total amount
of fees received by the director, in the Company's Employee Stock Purchase and
Bonus Plan (the "Stock Plan"). Under this plan amounts specified by a director
are withheld from a director's fees and forwarded to an independent
administrator who purchases shares of the Company's Common Stock on behalf of
the director participant. In addition the Company provides a "bonus" of one
share for every ten share net increase in shares owned under the plan in a
calendar year. For the year ended 1994, Mr. Kasen received 27 bonus shares under
the plan at a pre-tax cost to the Company of $1,215.
Based upon recommendations of management after surveying other companies,
the Board of Directors approved increasing non-employee director compensation
for 1995. For 1995, non-employee directors will receive an annual fee of
$10,000, and a meeting fee of $1,250 for each meeting attended. Directors will
also continue to receive expense reimbursement and may continue to participate
in the Stock Plan.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
The Company maintains a Stock Option Plan for Non-Employee Directors (the
"Directors Plan") which provides for one-time automatic awards to existing and
future directors (who are not employees of the Company) of options to purchase
6,000 shares of the Company's Common Stock. The purpose of the Directors Plan is
to attract and retain the services of experienced and qualified outside
directors of the Company who are not eligible to participate in the Company's
employee benefit plans in a way that enhances the identification of directors'
interests with those of the shareholders. The grantees of options under the
Directors Plan are not entitled to receive option grants under the Company's
1986 Stock Option Plan. Presently, four persons are eligible to participate in
the Directors Plan. No options were granted pursuant to the Directors Plan
during the fiscal year ended December 31, 1994.
FAMILY RELATIONSHIPS
Anthony and Gary Markel are brothers, and Steven Markel is their first
cousin.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table provides compensation information for the Company's
Chief Executive Officer and all other executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
NAME AND ANNUAL COMPENSATION(1) SECURITIES
PRINCIPAL SALARY OTHER ANNUAL UNDERLYING ALL OTHER
POSITION YEAR ($) BONUS ($) COMPENSATION ($)(2) OPTIONS (#) COMPENSATION ($)(3)
<S> <C> <C> <C> <C> <C> <C>
Alan I. Kirshner 1994 $ 297,500 $ 93,000 -- -- $ 104,621
Chairman and 1993 $ 276,250 $ 147,500 -- -- $ 93,383
CEO 1992 $ 270,000 $ 175,500 -- -- $ 82,856
Anthony F. Markel 1994 $ 297,500 $ 93,000 $ 106 18,000 $ 77,967
President 1993 $ 268,750 $ 147,500 $ 707 -- $ 68,359
and COO 1992 $ 260,000 $ 169,000 -- 24,000 $ 59,839
Steven A. Markel 1994 $ 297,500 $ 93,000 $13,173 18,000 $ 64,691
Vice Chairman 1993 $ 268,750 $ 147,500 $10,260 -- $ 56,891
1992 $ 260,000 $ 169,000 -- 24,000 $ 49,462
Darrell D. Martin 1994 $ 212,000 $ 66,300 -- 10,000 $ 23,642
Executive Vice 1993 $ 195,000 $ 105,000 -- -- $ 60,865
President & CFO 1992 $ 190,000 $ 123,500 -- -- $ 60,400
</TABLE>
(1) In accordance with applicable rules of the Securities and Exchange
Commission, this table excludes all amounts paid under group life, health,
hospitalization, medical reimbursement and relocation plans which do not
discriminate in scope, terms or operation in favor of executive officers or
directors. This table also excludes the value of perquisites because they do not
exceed the lesser of $50,000 or 10% of salary and bonus for any executive
officer.
(2) Amounts shown in this column represent reimbursements during the year
for taxes related to certain option exercises and for which the Company received
a tax deduction.
(3) Amounts shown in this column represent the Company's contributions
under the Company's Retirement Savings (401k) Plan in the amount of $26,757 for
Messrs. Kirshner, Steve and Anthony Markel, and $19,052 for Mr. Martin. In the
case of Messrs. Kirshner and Steven and Anthony Markel, the amounts shown also
include accruals of $77,864 for Mr. Kirshner, $37,934 for Steven Markel and
$51,210 for Anthony Markel pursuant to Employment Agreements which provide for
supplemental retirement benefits. Also includes $4,590 for Mr. Martin
representing the value of 102 shares awarded pursuant to the Company's Employee
Stock Purchase and Bonus Plan (which provides for a one share bonus for every
ten share net increase in shares owned by an employee in a calendar year). In
accordance with applicable rules the information in this footnote relates only
to 1994.
6
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Messrs. Kasen, Gary Markel and Watsa are members of the Compensation
Committee of which Mr. Kasen is Chairman. The Compensation Committee has
responsibility for establishing and reviewing the compensation of executive
officers, administering the 1986 Stock Option Plan and administering the 1993
Incentive Stock Plan.
The Company's compensation packages for its executive officers consist of
base salary, annual performance based bonuses, contributions to retirement plans
and equity based compensation such as stock option grants or incentive stock or
other awards.
In general, base salary levels are set at the minimum levels believed by
the Committee to be sufficient to attract and retain qualified executives when
considered with other components of the Company's compensation structure.
Effective as of October 31, 1994, the Committee established annual base salaries
of $310,000 for each of Messrs. Kirshner and Anthony and Steven Markel and
$221,000 for Mr. Martin. In establishing these salaries the Committee considered
the annual rate of inflation and the Company's improvement in earnings from core
operations. In establishing salaries, including Mr. Kirshner's salary as Chief
Executive Officer, the Committee also considers years of service, level of
experience and areas of responsibility.
In addition to base salary, the Company has approved a bonus plan for
executives in which cash bonuses are paid based on increases in the book value
of the Company's Common Stock (the "Executive Bonus Plan"). The Committee
believes that consistent increases in book value will enhance the value of the
Company and will, over time, result in higher stock prices.
BONUS PLAN FOR EXECUTIVE OFFICERS
Under the Executive Bonus Plan, executive bonuses, expressed as a
percentage of base salary, are awarded based on a five year average of the
compound growth in book value per share of Common Stock and Common Stock
equivalents. Growth in book value for these purposes excludes, in the year of an
applicable transaction, the impact of the issuance or redemption of capital
shares. The five year average compound growth in book value per share for 1994
was 17% and accordingly, the Committee determined that a bonus of 20% of base
salary was appropriate. The Committee also determined, in light of several
additional factors, including certain accounting issues and the improvement in
the Company's core operating earnings, that an additional discretionary bonus of
10% of base salary was warranted. Amounts paid as bonus for 1994 are included in
the Summary Compensation Table.
7
<PAGE>
The table below shows the level of bonus which will be paid under the
Executive Bonus Plan for 1995 if goals for increased book value are met. The
Committee will also retain discretionary authority to award bonuses outside the
Plan to reward superior performance as determined by the Committee.
<TABLE>
<CAPTION>
FIVE YEAR AVERAGE
COMPOUND GROWTH
IN BOOK VALUE BONUS AS % OF
PER SHARE BASE SALARY
<S> <C>
15% 0%
16% 10%
17% 20%
18% 30%
19% 40%
20% 50%
21% 60%
22% 70%
23% 80%
24% 90%
25% 100%
26%+ Discretionary
</TABLE>
In 1993 Executive bonuses were determined by reference to returns on
equity. Due to changes in accounting rules which distorted return on equity
calculations the Committee decided for 1994 to use growth in book value as a
measure of executive performance. As originally proposed the Committee intended
to phase in the change to book value per share over three years but the
Committee decided in early 1995 to move immediately to the new measure for 1994
and subsequent years.
The Committee has not historically made annual stock option grants to
executive officers, but instead has attempted to equalize grants to persons
holding similar positions of responsibility within the Company and has made
grants from time to time to attract new officers. During 1992 and 1994, options
for 24,000 shares and 18,000 shares, respectively were granted to each of
Messrs. Anthony and Steven Markel to replace options, which, because of IRS
regulations were limited to a five-year term and which would have expired if not
exercised in 1992 and 1994 respectively. The options issued during 1992 and 1994
also have five-year terms. In addition, during 1994 the Committee awarded
options for 10,000 shares to Mr. Martin, the Company's Executive Vice President
and Chief Financial Officer. The Committee made this award in an effort to
equalize grants as described above and in recognition of Mr. Martin's
performance during the past year.
The Committee expects to continue to utilize stock option grants and other
incentive awards to compensate executive and other officers of the Company and
its subsidiaries.
Section 162(m) of the Internal Revenue Code of 1986, as amended, which was
enacted in 1993, imposes a $1,000,000 limit on the amount of compensation that
will be deductible by the Company with respect to the Chief Executive Officer
and the four other most highly compensated executive officers. Performance based
compensation that meets certain requirements will not be subject to the
deduction limit. The Committee, with the assistance of the Company's legal
counsel, has reviewed the impact of Section 162(m) on the Company and believes
it is unlikely that the compensation paid to any executive officer during the
fiscal year ending December 31, 1994 or 1995 will exceed the limit. The
Committee will continue to monitor the impact of the Section 162(m) limit and to
assess alternatives for avoiding any loss of tax deductions in future years.
COMPENSATION COMMITTEE
Stewart M. Kasen, Gary L. Markel, V. Prem Watsa
8
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total return (based on share
price) on the Company's Common Stock with the cumulative total return of
companies included in the NASDAQ US Companies Index and the Dow Jones Property
and Casualty Insurance Companies Index.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS
[INSERT GRAPH AS DEFINED BY THE FOLLOWING DATA POINTS]
Cumulative Total Return
1989 1990 1991 1992 1993 1994
Markel Corp 100 52 98 139 174 184
NASDAQ STOCK MRKT - US 100 85 136 159 181 177
DJ PROPERTY & CSLTY INS 100 96 119 145 146 154
9
<PAGE>
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Mr. Kirshner and
Messrs. Anthony and Steven Markel which provide for the employment of those
individuals as executive officers. Each agreement has an initial term of one
year and is automatically renewed for additional terms of one year unless either
party gives 60 days notice of non-renewal. If the Company chooses not to renew,
the Company will be deemed to have terminated the executive's employment without
cause. The agreements provide for a base annual salary, currently $310,000 for
Messrs. Kirshner and Anthony and Steven Markel. Each executive has agreed to
preserve the confidentiality of the Company's proprietary data and has also
agreed not to compete with the Company for a period of two years following
termination. In the event of an executive's death or disability, the Company
will continue to pay base salary and benefits for twelve months. In the event
the agreement is terminated by the Company for cause or voluntarily by the
executive, the Company's obligations under the agreement will terminate. In the
event the agreement is terminated by the Company without cause, the Company will
pay the executive his base salary for twenty-four months from the date of
termination. The agreements also provide for annual salary reviews, bonuses by
the Board of Directors and certain additional benefits.
The employment agreements also provide each executive with a supplemental
retirement benefit pursuant to which the Company will set aside annually an
amount equal to between 8% and 16% of the executive's base salary plus interest
at the rate of 8% per annum on the amount set aside from the date of each
installment of base salary. The supplemental retirement benefit is payable to
the executive on the earliest of termination of the employment agreement,
retirement or death. Amounts accrued for the year ended December 31, 1994, are
included in the Summary Compensation Table in the All Other Compensation column.
The Company has entered into a similar employment agreement with Mr. Martin
at a current base annual salary of $221,000. The agreement with Mr. Martin does
not provide for salary continuation in the event of termination due to death or
for supplemental retirement benefits.
CERTAIN TRANSACTIONS
The Board of Directors believes that all members of senior management
should have significant holdings of the Company's Common Stock. To that end the
Company loaned Mr. Martin $518,500 during 1992 to facilitate his purchase of
20,000 shares of the Company's Common Stock. The unsecured loan is full
recourse, accrues interest at 8% annually and requires payments of $67,455 per
year until 1999 at which time all remaining principal and interest becomes due
and payable. The loan may be prepaid at any time. The largest aggregate amount
outstanding during 1994 was $510,328. At February 20, 1995, the total
outstanding balance of principal and interest was $408,227.
On January 27, 1994, Anthony F. Markel exercised options for 18,000 shares
with an exercise price of $19.135 per share. The Company purchased from Mr.
Markel on the same date the 18,000 shares issued upon exercise at the then
current market price of $40.75 per share.
McGuire, Woods, Battle & Boothe, LLP, of which Leslie A. Grandis is a
partner, provides legal services to the Company.
STOCK PLANS FOR EMPLOYEES
The Company has in effect the 1986 Stock Option Plan and the 1993 Incentive
Stock Plan under which a total of 510,000 and 100,000 shares of Common Stock,
respectively, were reserved for issuance to employees of the Company and its
consolidated or unconsolidated subsidiaries.
10
<PAGE>
The following tables provide information concerning options granted during
1994 to individuals included in the Summary Compensation Table and information
concerning options exercised and held by such individuals at December 31, 1994.
This information is provided in accordance with applicable rules of the
Securities and Exchange Commission and is not necessarily indicative of the
value of options. No awards were made during 1994 under the 1993 Incentive Stock
Plan.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE
UNDERLYING GRANTED TO EXERCISE OR APPRECIATION
OPTIONS GRANTED EMPLOYEES IN BASE PRICE EXPIRATION FOR OPTION TERM1
NAME (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Anthony F. Markel 11,025 24.0% 43.002 3-22-99 130,978 289,428
6,975 15.1% 47.303 3-22-99 52,871 153,115
Steven A. Markel 11,025 24.0% 43.002 3-22-99 130,978 289,428
6,975 15.1% 47.303 3-22-99 52,871 153,115
Darrell D. Martin 10,000 21.8% 41.754 11-14-04 262,564 665,387
</TABLE>
1 Assumes the market price of the Common Stock appreciates in value from the
date of grant to the end of the option term at the annualized rates shown.
These amounts represent certain assumed rates of appreciation only.
2 Exercisable after September 23, 1994.
3 Exercise price set at 110% of fair market value of common stock on the date of
grant. Exercisable beginning in 1997 at a rate of 2,325 shares per year.
4 Exercisable 20% annually beginning on the second anniversary of the date of
grant.
The following table provides information, as of December 31, 1994,
concerning options held by the individuals included in the Summary Compensation
Table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS AT FY-END(#) OPTIONS AT FY-END ($)2
NAME EXERCISE (#) REALIZED ($)1 EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
Alan I. Kirshner -- -- 38,280 3,720 1,087,619 89,671
Anthony F. Markel 18,000 389,070 27,407 14,593 238,196 96,139
Steven A. Markel 18,000 447,570 27,407 14,593 238,196 96,139
Darrell D. Martin -- -- 24,000 10,000 651,000 --
</TABLE>
1 Difference between fair market value and exercise price on date of exercise.
2 Difference between fair market value and exercise price at fiscal year end.
11
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As noted earlier, the Members of the Compensation Committee are Messrs.
Kasen, Watsa and Gary Markel. Hamblin, Watsa Investment Counsel Limited
("Hamblin, Watsa"), an investment advisory firm in Toronto, Canada, of which V.
Prem Watsa is a partner, provides investment advisory services to the Company
and several of its subsidiaries. The investment advisory agreements may be
terminated by either party on thirty days' notice. Hamblin, Watsa was paid
approximately $512,000 by the Company and its consolidated subsidiaries for
services during 1994.
Gary Markel & Associates, Inc. and Gary Markel Surplus Lines Brokerage,
Inc., entities owned by Gary L. Markel, place insurance with the Company. During
1994, the Company paid approximately $344,231 in commissions on premium volume
placed by entities owned by Gary Markel.
Steven A. Markel is a director of Fairfax Financial Holdings Limited
("Fairfax") and, as a member of such Board, participates in establishing the
compensation of Mr. Watsa, who is an executive officer of Fairfax.
SELECTION OF AUDITORS
KPMG Peat Marwick, LLP, independent certified public accountants, has been
selected by the Board of Directors as independent auditors of the Company for
the current fiscal year, subject to ratification or rejection by the
shareholders. Representatives of KPMG Peat Marwick, LLP, are expected to be
present at the Annual Meeting of Shareholders and will have an opportunity to
make a statement if they so desire and are expected to be available to respond
to appropriate questions from the shareholders. In the event the shareholders do
not ratify the selection of KPMG Peat Marwick, LLP, the selection of other
independent auditors will be considered by the Board of Directors.
OTHER MATTERS
The Board of Directors knows of no other matters which will be brought
before the meeting. However, if any other matters are properly presented, or if
any question arises as to whether any matter has been properly presented and is
a proper subject for shareholder action, the persons named as proxies in the
accompanying proxy intend to vote the shares represented by such proxy in
accordance with their best judgment.
SHAREHOLDER PROPOSALS FOR 1995 MEETING
Any shareholder desiring to make a proposal to be acted upon at the 1996
Annual Meeting of Shareholders must present the proposal to the Company at its
principal executive offices in Glen Allen, Virginia, no later than December 9,
1995 in order for the proposal to be included in the Company's 1996 proxy
materials. Any such proposal should meet the applicable requirements of the
Securities Exchange Act of 1934 and the rules and regulations thereunder.
By order of the Board of Directors
Leslie A. Grandis
SECRETARY
April 6, 1995
12
<PAGE>
MARKEL CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 17, 1995
The undersigned, having received the Annual Report to Shareholders and the
accompanying Notice of Annual Meeting of Shareholders and Proxy Statement dated
April 6, 1995, hereby appoints Alan I. Kirshner, Anthony F. Markel and Steven A.
Markel (each with power to act alone) as proxies, with full power of
substitution, and hereby authorizes them to represent and vote, as directed
below, all the shares of the Common Stock of Markel Corporation, held of record
by the undersigned on March 31, 1995, at the Annual Meeting of Shareholders to
be held on May 17, 1995, and any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
ELECTION OF DIRECTORS WITHHOLD AUTHORITY
1. FOR all nominees listed (except as to vote for all nominees listed ( )
indicated to the contrary)
Alan I. Kirshner, Anthony F. Markel, Steven A. Markel, Darrell D. Martin,
Leslie A. Grandis, Stewart M. Kasen, Gary L. Markel and V. Prem Watsa.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE WRITE THE
NOMINEE'S NAME ON THE LINE PROVIDED BELOW.)
2. To ratify or reject the selection by the Board of Directors of KPMG Peat
Marwick, LLP, as the Company's independent auditors for the year ending
December 31, 1995.
FOR AGAINST ABSTAIN
(Please date and sign on the reverse side)
<PAGE>
3. IN THEIR DISCRETION, on such other matters as may properly come before the
meeting, or, if any nominee listed in Proposal 1 above is unable to serve for
any reason, to vote or refrain from voting for a substitute nominee or
nominees.
This proxy when properly executed, will be voted as directed. WHERE NO
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
Please sign your name(s) exactly
as they appear hereon. If signer is a
corporation, please sign the full
corporate name by duly authorized
officer. If an attorney, guardian,
administrator, executor, or trustee,
please give full title as such. If a
partnership, sign in partnership name
by authorized person.
Date: , 1995
PLEASE COMPLETE, DATE, SIGN AND RETURN
THIS PROXY PROMPTLY IN THE
ACCOMPANYING ENVELOPE.
