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 CORPORATION LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF MARKEL CORPORATION:
Notice is hereby given that the 1996 Annual Meeting of Shareholders of
Markel Corporation (the "Company") will be held at the Jefferson Hotel, Franklin
& Adams Streets, Richmond, Virginia, on Tuesday, May 7, 1996, 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, 1996; 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, 1995 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 3, 1996
<PAGE>
[MARKEL CORPORATION LOGO]
4551 Cox Road
Glen Allen, Virginia 23060
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 7, 1996
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 7, 1996, 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 3, 1996. The Board of Directors has fixed the close of business on March
29, 1996, 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, 5,425,743 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 3, 1996
<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, 1996,
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.............................................. 428,286/a/ 7.90%
4551 Cox Road
Glen Allen, VA 23060
Gary L. Markel................................................. 358,184/b/ 6.60%
9700 Ninth Street North
St. Petersburg, FL 33702
Steven A. Markel............................................... 508,328/c/ 9.37%
4551 Cox Road
Glen Allen, VA 23060
Alan I. Kirshner............................................... 170,503/d/ 3.14%
Leslie A. Grandis.............................................. 15,600/e/ *
Stewart M. Kasen............................................... 8,953/f/ *
Darrell D. Martin.............................................. 73,930/g/ 1.36%
V. Prem Watsa.................................................. 6,000/h/ *
All directors and executive officers as a group................ 1,569,784/i/ 28.95%
</TABLE>
* Less than 1% of class.
/a/ Includes 35,025 shares represented by options granted under the
Company's 1986 Stock Option Plan which may be exercised within sixty days of
January 31, 1996. Excludes 6,000 shares held by Mr. Markel's wife as to which
shares he disclaims beneficial ownership.
/b/ 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, 1996. 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 352,184 shares held by the Markel Family Limited
Partnership, Bank of America Plaza, Suite 1100, South Fourth Street, Las Vegas,
Nevada 89101. Gary Markel is the sole general partner of, and holder of 99.9% of
the beneficial interests in, the Markel Family Limited Partnership.
/c/ Includes 35,025 shares represented by options granted under the
Company's 1986 Stock Option Plan which may be exercised within sixty days of
January 31, 1996. Excludes 96,726 shares held as co-trustee for the benefit of
the Lewis C. Markel Residuary Trust as to which he disclaims beneficial
ownership. Excludes 16,838 shares held as executor of the Estate of Stanley B.
Markel as to which he disclaims beneficial ownership. Also excludes
2
<PAGE>
26,500 shares held as co-trustee for the benefit of Mr. Kirshner's children as
to which he disclaims beneficial 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 Mr. Steven A.
Markel's minor children.
/d/ Includes 18,000 shares represented by options granted under the
Company's 1986 Stock Option Plan which may be exercised within sixty days of
January 31, 1996. Excludes 163 shares held by Mr. Kirshner's wife as to which he
disclaims beneficial ownership.
/e/ 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, 1996. Excludes 400 shares held by Mr. Grandis'
wife and 600 shares held by Mr. Grandis' children as to which shares he
disclaims beneficial ownership.
/f/ 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, 1996.
/g/ 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, 1996.
/h/ 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, 1996.
/i/ Includes 136,050 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,
1996. Excludes 172,227 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
last 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, 1996 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, 60 1978
Chairman of the Board of Directors and Chief Executive Officer since September 1986. President from
1979 to March 1992.
ANTHONY F. MARKEL, 53 1978
President and Chief Operating Officer since March 1992. Executive Vice President from 1979 to March
1992.
STEVEN A. MARKEL, 47 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; Lindsey Morden Group
Inc.; AVEMCO Corporation.
DARRELL D. MARTIN, 47 1991
Executive Vice President and Chief Financial Officer since March 1992. Chief Financial Officer since
1988.
LESLIE A. GRANDIS, 51 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, 52 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, 49 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, 45 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; Lindsey Morden Group
Inc.; FCA International.
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS
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.
4
<PAGE>
During 1995 the Board of Directors held four regular and two special
meetings. There were two meetings of the Audit Committee and one meeting of the
Compensation Committee during 1995.
COMPENSATION OF DIRECTORS
Each non-employee director received for services as a director during 1995
an annual fee of $10,000, plus $1,250 for each regular 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 1995, Mr. Kasen received 25 bonus shares under
the plan at a pre-tax cost to the Company of $2,263.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
The Company maintains a Stock Option Plan for Non-Employee Directors (the
"Directors Plan") which provides for one-time automatic awards to existing and
future directors (who are not employees of the Company) of options to purchase
6,000 shares of the Company's Common Stock. The purpose of the Directors Plan is
to attract and retain the services of experienced and qualified outside
directors of the Company who are not eligible to participate in the Company's
employee benefit plans in a way that enhances the identification of directors'
interests with those of the shareholders. The grantees of options under the
Directors Plan are not entitled to receive option grants under the Company's
1986 Stock Option Plan. Presently, four persons are eligible to participate in
the Directors Plan. No options were granted pursuant to the Directors Plan
during the fiscal year ended December 31, 1995.
FAMILY RELATIONSHIPS
Anthony and Gary Markel are brothers, and Steven Markel is their first
cousin.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table provides compensation information for the Company's
Chief Executive Officer and all other executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
NAME AND ANNUAL COMPENSATION(1) SECURITIES
PRINCIPAL OTHER ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($)(2) OPTIONS (#) COMPENSATION ($)(3)
<S> <C> <C> <C> <C> <C> <C>
Alan I. Kirshner 1995 $310,000 $ 558,000 $ -- -- $ 99,963
Chairman and 1994 $297,500 $ 93,000 -- -- $ 91,364
CEO 1993 $276,250 $ 147,500 -- -- $ 93,383
Anthony F. Markel 1995 $310,000 $ 558,000 $ -- -- $ 70,403
President 1994 $297,500 $ 93,000 $ 106 18,000 $ 64,710
and COO 1993 $268,750 $ 147,500 $ 707 -- $ 68,359
Steven A. Markel 1995 $310,000 $ 558,000 $ -- -- $ 55,650
Vice Chairman 1994 $297,500 $ 93,000 $13,173 18,000 $ 51,434
1993 $268,750 $ 147,500 $10,260 -- $ 56,891
Darrell D. Martin 1995 $221,000 $ 397,800 $ -- -- $ 36,684
Executive Vice 1994 $212,000 $ 66,300 -- 10,000 $ 18,090
President & CFO 1993 $195,000 $ 105,000 -- -- $ 60,865
</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 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 $13,500 for
each executive. In the case of Messrs. Kirshner and Anthony and Steven Markel,
the amounts shown also include accruals of $86,463 for Mr. Kirshner, $56,903 for
Anthony Markel and $42,150 for Steven Markel pursuant to Employment Agreements
which provide for supplemental retirement benefits and earnings thereon. Also
includes for Mr. Martin $10,739, representing the difference between the
interest rate charged on the loan made to Mr. Martin under the 1995 Loan Program
(See "Certain Transactions" below) and 120% of the applicable federal long-term
rate at the time the loan was made (a rate presumed for certain purposes under
Securities and Exchange Commission regulations to be a maximum market rate). The
amount shown for Mr. Martin also includes $905 representing the value of bonus
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) and $11,540 representing the
6
<PAGE>
value of bonus shares awarded in connection with the 1995 Loan Program (See
"Certain Transactions" below). In accordance with applicable rules the
information in this footnote relates only to 1995.
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 for 1995
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.
Currently, annual base salaries are $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 and is adjusted for changes in accounting principles which affect
shareholders' equity.
7
<PAGE>
The table below shows the level of bonus which will be paid under the
Executive Bonus Plan for 1996 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.
FIVE YEAR AVERAGE
COMPOUND GROWTH
IN BOOK VALUE BONUS AS % OF
PER SHARE BASE SALARY
15% 0%
16% 10%
17% 20%
18% 30%
19% 40%
20% 50%
21% 60%
22% 70%
23% 80%
24% 90%
25% 100%
26%+ Discretionary
The five year average compound growth in book value per share for 1995 was
33% and accordingly a bonus of 100% of base salary was earned under the Plan.
The Committee determined, as contemplated by the Plan, that an additional
discretionary bonus of 80% of base salary was warranted. Amounts paid as bonus
for 1995 are included in the Summary Compensation Table.
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 1994 options for 18,000
shares 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 1994. The options issued during
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 1994.
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, 1996 will exceed the limit. The Committee will
continue to monitor the impact of the Section 162(m) limit and will attempt to
avoid loss of tax deductions in future years as long as doing so is consistent
with the Committee's objectives for management compensation.
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*
[GRAPH]
Dow Jones
NASDAQ Property &
Markel Stock Casualty
Corporation Market Insurance
US
1990 100 100 100
1991 187 161 124
1992 266 187 152
1993 334 215 153
1994 353 210 161
1995 643 296 227
*$100 invested on 12/31/90 in stock or index including reinvestment of
dividends. Fiscal year ending December 31.
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, 1995 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.
During 1995 the Company offered a loan program to all employees to
facilitate the purchase of shares of the Company's Common Stock (the "1995 Loan
Program"). As part of that program the Company offered to refinance 31 then
existing stock related loans with the Company. Mr. Martin participated in the
program and purchased an additional 3,257 shares of the Company's Common Stock,
borrowing an additional $228,791 from the Company for this purpose. The Company
also awarded bonus shares at the rate of one bonus share for every 20 shares
purchased in connection with the program. The value of the bonus shares awarded
to Mr. Martin is included in the "All Other Compensation" column of the Summary
Compensation Table.
All loans made under the 1995 Loan Program (including the portion that was
refinanced) bore no interest from September 1, 1995 to March 31, 1996; bear
interest at 3% from April 1, 1996 through March 31, 1999 and bear interest at
the then Prime Rate plus 1% from April 1, 1999 until March 31, 2006 at which
time any remaining principal and interest will be due and payable. The unsecured
loans are full recourse and are partially amortizing until March 31, 1999 at
which time the payments are adjusted to fully amortize principal and interest by
March 31, 2006. The loan may be prepaid at any time, must be repaid in the event
of an employee's termination, and the interest rate and payment terms are
adjusted to terms comparable to market rates and terms in the event an employee
sells or pledges the shares purchased pursuant to the loan program (including
bonus shares awarded
10
<PAGE>
in connection with the program) without the Company's prior consent. The largest
aggregate amount outstanding during 1995 on Mr. Martin's loan was $654,287.
McGuire, Woods, Battle & Boothe, LLP, of which Leslie A. Grandis is a
partner, provides legal services to the Company.
STOCK PLANS FOR EMPLOYEES
The Company has in effect the 1986 Stock Option Plan and the 1993 Incentive
Stock Plan under which a total of 510,000 and 100,000 shares of Common Stock,
respectively, were reserved for issuance to employees of the Company and its
consolidated or unconsolidated subsidiaries.
The following table provides information, as of December 31, 1995,
concerning options held by the individuals included in the Summary Compensation
Table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS AT FY-END (#) OPTIONS AT FY-END ($)2
NAME EXERCISE (#) REALIZED ($)1 EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
Alan I. Kirshner 24,000 965,400 18,000 -- 1,045,890 --
Anthony F. Markel -- -- 35,025 6,975 1,508,647 196,695
Steven A. Markel -- -- 35,025 6,975 1,508,647 196,695
Darrell D. Martin -- -- 24,000 10,000 1,467,000 337,500
</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.
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 $618,000 by the Company and its consolidated subsidiaries for
services during 1995.
Gary Markel & Associates, Inc. and Gary Markel Surplus Lines Brokerage,
Inc., entities owned by Gary L. Markel, place insurance with the Company. During
1995, the Company paid approximately $424,000 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.
11
<PAGE>
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 NEXT MEETING
Any shareholder desiring to make a proposal to be acted upon at the next
Annual Meeting of Shareholders must present the proposal to the Company at its
principal executive offices in Glen Allen, Virginia, no later than December 7,
1996 in order for the proposal to be included in the Company's 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 3, 1996
12
<PAGE>
MARKEL CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 7, 1996
The undersigned, having received the Annual Report to Shareholders and the
accompanying Notice of Annual Meeting of Shareholders and Proxy Statement dated
April 3, 1996, 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 29, 1996, at the Annual Meeting of Shareholders to
be held on May 7, 1996, and any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
1. ELECTION OF DIRECTORS WITHHOLD AUTHORITY
FOR all nominees listed to vote for all
(except as indicated to nominees listed
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, 1996.
[ ] 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: , 1996
PLEASE COMPLETE, DATE, SIGN AND RETURN
THIS PROXY PROMPTLY IN THE
ACCOMPANYING ENVELOPE.
