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) No fee required
( ) 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 1997 Annual Meeting of Shareholders of
Markel Corporation (the "Company") will be held at the Jefferson Hotel, Franklin
& Adams Streets, Richmond, Virginia, on Tuesday, May 13, 1997, 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, 1997; 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, 1996 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 7, 1997
<PAGE>
[MARKEL LOGO]
4551 Cox Road
Glen Allen, Virginia 23060
------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 13, 1997
------------------------
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 13, 1997, 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 7, 1997. The Board of Directors has fixed the close of business on
March 28, 1997, 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, 5,478,745
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 7, 1997
<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, 1997,
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.............................................. 416,153(a) 7.60%
4551 Cox Road
Glen Allen, VA 23060
Gary L. Markel................................................. 357,784(b) 6.55%
9700 Ninth Street North
St. Petersburg, FL 33702
Steven A. Markel............................................... 499,315(c) 9.11%
4551 Cox Road
Glen Allen, VA 23060
Alan I. Kirshner............................................... 157,134(d) 2.87%
Leslie A. Grandis.............................................. 15,600(e) *
Stewart M. Kasen............................................... 8,979(f) *
Darrell D. Martin.............................................. 76,099(g) 1.39%
V. Prem Watsa.................................................. 6,000(h) *
All directors and executive officers as a group................ 1,537,064(i) 27.64%
Oak Value Capital Management, Inc. ............................ 316,585(j) 5.80%
3100 Tower Boulevard, Suite 800
Durham, NC 27707
</TABLE>
- ---------------
* Less than 1% of class.
(a) Includes 13,350 shares represented by options granted under the
Company's 1986 Stock Option Plan which may be exercised within sixty days of
January 31, 1997. Includes 600 shares held as trustee for the benefit of Mr.
Anthony F. Markel's children. 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, 1997. Excludes 24,175 shares held as co-trustee
for the benefit of Mr. Anthony F. Markel's children as to which he disclaims
beneficial ownership. Includes 351,784 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.
2
<PAGE>
(c) Includes 19,390 shares represented by options granted under the
Company's 1986 Stock Option Plan which may be exercised within sixty days of
January 31, 1997. 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 26,000 shares held as co-trustee for the benefit of Mr.
Kirshner's children as to which he disclaims beneficial ownership. Excludes
24,175 shares held as co-trustee for the benefit of Mr. Anthony F. Markel's
children as to which he disclaims beneficial ownership. Includes 1,800 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, 1997. Excludes 181 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, 1997. 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, 1997.
(g) Includes 26,000 shares represented by options granted under the
Company's 1986 Stock Option Plan which may be exercised within sixty days of
January 31, 1997.
(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 100,740 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 154,082 shares as to which beneficial ownership is disclaimed.
(j) According to a report on Schedule 13G filed by Oak Value Capital
Managment, Inc., on February 5, 1997.
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, 1997 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, 61 1978
Chairman of the Board of Directors and Chief Executive Officer since September 1986. President from
1979 to March 1992.
ANTHONY F. MARKEL, 54 1978
President and Chief Operating Officer since March 1992. Executive Vice President from 1979 to March
1992. Director of Open Plan Systems, Inc.
STEVEN A. MARKEL, 48 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; S&K Famous Brands, Inc.
DARRELL D. MARTIN, 48 1991
Executive Vice President and Chief Financial Officer since March 1992. Chief Financial Officer since
1988.
LESLIE A. GRANDIS, 52 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, 57 1987
Private Investor; Chairman from January 1994 and President and Chief Executive Officer, Best Products
Co., Inc., Richmond, Virginia from June 1991 to April 1996; Director of Factory Card Outlet Corp.;
O'Sullivan Industries Holdings, Inc.; The Bibb Co. Best Products Co., Inc. filed a petition in
bankruptcy on September 24, 1996.
GARY L. MARKEL, 50 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, 46 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 1996 the Board of Directors held four regular meetings. There were
two meetings of the Audit Committee and one meeting of the Compensation
Committee during 1996.
COMPENSATION OF DIRECTORS
Each non-employee director received for services as a director during 1996
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. No non-employee director participated in this plan during 1996.
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, 1996.
FAMILY RELATIONSHIPS
Anthony and Gary Markel are brothers, and Steven Markel is their first
cousin.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Anthony Markel inadvertently failed to timely file a report on Form 4 with
respect to a sale of 200 shares, in January 1997, by a trust for which he serves
as trustee and he also inadvertently failed to timely file a report on Form 5
with respect to a gift made in December 1996.
Anthony Markel and Gary Markel serve as trustees for a family trust created
under the will of their father. In December 1996 the trust received a
distribution of 150 shares of Markel common stock which, under applicable rules,
should have been included on a Form 4 or Form 5 filing for each of Anthony and
Gary Markel. Due to oversight these filings were not timely made.
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
ANNUAL COMPENSATION(1) ------------
NAME AND ------------------------------------------- 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 1996 $310,000 $248,000 -- -- $107,153
Chairman and 1995 $310,000 $558,000 $ -- -- $ 99,963
CEO 1994 $297,500 $ 93,000 -- -- $ 91,364
Anthony F. Markel 1996 $310,000 $248,000 -- -- $ 75,135
President 1995 $310,000 $558,000 $ -- -- $ 70,403
and COO 1994 $297,500 $ 93,000 $ 106 18,000 $ 64,710
Steven A. Markel 1996 $310,000 $248,000 -- -- $ 59,155
Vice Chairman 1995 $310,000 $558,000 $ -- -- $ 55,650
1994 $297,500 $ 93,000 $13,173 18,000 $ 51,434
Darrell D. Martin 1996 $221,000 $176,800 -- -- $ 36,610
Executive Vice 1995 $221,000 $397,800 $ -- -- $ 36,684
President & CFO 1994 $212,000 $ 66,300 -- 10,000 $ 18,090
</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 $93,653 for Mr. Kirshner, $61,635 for
Anthony Markel and $45,655 for Steven Markel pursuant to Employment Agreements
which provide for supplemental retirement benefits and earnings thereon. Also
includes for Mr. Martin $23,110, 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). In
accordance with applicable rules the information in this footnote relates only
to 1996.
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 for 1996
consisted of base salary, annual performance based bonuses and contributions to
retirement plans.
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 March 3, 1997, annual base salaries are $341,000 for each of
Messrs. Kirshner and Anthony and Steven Markel and $250,000 for Mr. Martin. In
establishing these salaries the Committee considered the fact that executive
salaries had not been adjusted since November, 1994, 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 1997 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 1996 was
23% and accordingly a bonus of 80% of base salary was earned under the Plan.
Amounts paid as bonus for 1996 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 each of 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, 1997 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 HERE]
<TABLE>
<CAPTION>
Cumulative Total Return
-------------------------------------------------------
12/91 12/92 12/93 12/94 12/95 12/96
<S> <C>
Markel Corp MAKL 100 142 178 189 343 409
NASDAQ STOCK MARKET-US INAS 100 116 134 131 185 227
DJ INSURANCE-PROPERTY & CASUALTY IINP 100 122 123 129 182 219
</TABLE>
*$100 invested on 12/31/91 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 $341,000 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, 1996 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 $250,000. 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 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.
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 in connection with the program) without the Company's prior
consent. The largest aggregate amount outstanding during 1996 on Mr. Martin's
loan was $654,287.
10
<PAGE>
McGuire, Woods, Battle & Boothe, L.L.P., of which Leslie A. Grandis is a
partner, provides legal services to the Company.
STOCK PLANS FOR EMPLOYEES
The Company has in effect the 1986 Stock Option Plan which expired on
November 3, 1996, and the 1993 Incentive Stock Plan under which a total of
510,000 and 100,000 shares of Common Stock, respectively, were reserved for
issuance to employees of the Company and its consolidated or unconsolidated
subsidiaries.
The following table provides information, as of December 31, 1996,
concerning options held by the individuals included in the Summary Compensation
Table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT FY-END (#) OPTIONS AT FY-END ($)(2)
ACQUIRED ON VALUE ----------------------------- -----------------------------
NAME EXERCISE (#) REALIZED ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alan I. Kirshner -- -- 18,000 -- 1,306,890 --
Anthony F. Markel 24,000 1,424,870 13,350 4,650 617,453 198,555
Steven A. Markel 17,960 1,070,060 19,390 4,650 986,617 198,555
Darrell D. Martin -- -- 26,000 8,000 1,911,500 386,000
</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.
No new options were granted to Executive Officers during 1996.
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 $674,000 by the Company and its consolidated subsidiaries for
services during 1996.
Gary Markel & Associates, Inc. and Gary Markel Surplus Lines Brokerage,
Inc., entities owned by Gary L. Markel, place insurance with the Company. During
1996, the Company paid approximately $467,000 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 4,
1997 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 7, 1997
12
<PAGE>
APPENDIX - FORM OF PROXY
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<S> <C>
MARKEL CORPORATION ANNUAL MEETING TO BE HELD ON 05/13/97 MARKEL CORPORATION
FOR HOLDERS AS OF 03/28/97 05/13/97
2 ITEM(S)
SHARE(S)
CUSIP: 570535104 DIRECTORS
(MARK "X" FOR ONLY ONE BOX)
[ ] FOR ALL NOMINEES
CONTROL NO.
DIRECTORS
DIRECTORS RECOMMEND: A VOTE FOR ELECTION OF THE FOLLOWING DIRECTORS [ ] WITHHOLD ALL NOMINEES
1- 01-ALAN I. KIRSHER, 02-ANTHONY F. MARKEL, 03-DARRELL D. MARTIN, 04-STEVEN A. MARKEL
05-LESLIE A. GRANDIS, 06-STEWART M. KASEN, 07-GARY L. MARKEL, 08-V.PREM WATSA [ ] WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL
NOMINEE. WRITE NUMBER(S)
OF NOMINEE(S) BELOW.
USE NUMBER ONLY___________
PROPOSAL(S) DIRECTORS
RECOMMEND FOR AGAINST ABSTAIN
FOR
[ ] [ ] [ ]
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, 1997.
PLEASE INDICATE YOUR
PROPOSAL SELECTION BY FIRMLY
PLACING AN "x" IN THE APPROPRI-
ATE NUMBERED BOX WITH BLUE
OR BLACK INK ONLY
*NOTE* PROXIES ALAN I. KIRSHER, ANTHONY F. MARKEL AND STEVEN A. MARKEL.
</TABLE>
(EACH WITH POWER TO ACT ALONE).
*NOTE* CONTINUED ON REVERSE SIDE.
<PAGE>
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<S> <C>
SIGNATURE SIGNATURE DATE
PROXY FORM
PROXY FORM
</TABLE>
THE BOARD OF DIRECTORS SOLICITS THIS PROXY
The undersigned hereby appoint(s) the individuals listed on the reverse
side, and each of them, attorney, agent, and proxy of the undersigned, with full
power of substitution, to vote all shares of stock of the Company that the
undersigned would be entitled to cast if personally present at the Annual
Meeting of Shareholders of the Company, and at any postponement or adjournment
thereof.
This proxy will be voted as specified by the undersigned. If no choice is
specified, the proxy will be voted according to the director recommendations
indicated on the reverse side, and according to the discretion of the proxy
holders on any other matters that properly come before the meeting or any
postponement or adjournment thereof.
Please date, sign exactly as your name appears on the form and mail the
proxy promptly. When signing as an attorney, executor, administrator, trustee or
guardian, please give your full title as such. If shares are held jointly, both
owners must sign.
Continued and to be voted and signed on reverse.
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<S> <C>
Fold and Detach Here Please ensure you fold then detach and retain this Fold and Detach Here
portion of the Proxy Form
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