SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Terra Nova (Bermuda) Holdings Ltd.
(Name of Issuer)
Class A Ordinary Shares, par value U.S. $5.80
(Title of Class of Securities)
G87615103
(CUSIP Number)
Gregory B. Nevers, Esq.
Markel Corporation
4551 Cox Road, Glen Allen, Virginia 23060-3382
(804) 965-1673
(Name, Address and Telephone Number of Persons Authorized
to Receive Notices and Communications)
With a copy to:
Leslie A. Grandis, Esq.
McGuire, Woods, Battle & Boothe LLP
901 East Cary Street
Richmond, Virginia 23219
August 15, 1999
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g) check the
following box [ ].
NOTE. Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See
Rule 13d-7(b) for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
<PAGE>
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, SEE
the Notes).
<PAGE>
CUSIP NO. G87615103 PAGE 2 OF 10
SCHEDULE 13D
<TABLE>
<S> <C>
1) Names of Reporting Persons/S.S. or I.R.S. Identification Nos. of Above Persons
Markel Corporation, (E.I.N. 54-0292420)
2) Check the Appropriate Row if a Member of a Group (See Instructions)
(a)
(b) X
3) SEC Use Only
4) Source of Funds (SEE Instructions)
OO, WC
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e) [ ]
6) Citizenship or Place of Organization Virginia, U.S.A.
Class A
Number of 7) Sole Voting Power 136,800
Shares Bene-
ficially
Owned by 8) Shared Voting Power 7,158,620
Each
Reporting
Person With 9) Sole Dispositive Power 136,800
10) Shared Dispositive Power 0
11) Aggregate Amount Beneficially Owned by Each Reporting Person
7,295,420
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (SEE Instructions)
13) Percent of Class Represented by Amount in Row (11)
28.8%
14) Type of Reporting Person (SEE Instructions)
CO, IC
</TABLE>
ITEM 1. SECURITY AND ISSUER.
This statement relates to the Class A Ordinary Shares, par value U.S.
$5.80 per share (the "Class A Common Stock"), of Terra Nova (Bermuda) Holdings
Ltd. ("Terra Nova" or the "Issuer"), a Bermuda corporation with principal
executive offices located at Richmond House, 2nd Floor, 12 Par-la-ville Road,
Hamilton HM 8, Bermuda.
ITEM 2. IDENTITY AND BACKGROUND.
Item 2(a)-(c)
The Reporting Person is Markel Corporation ("Markel"), a Virginia
corporation, with its principal place of business at 4551 Cox Road, Glen Allen,
Virginia 23060-3392. Markel markets and underwrites specialty insurance products
and programs to a variety of niche markets.
The following information concerning the directors and executive
officers of Markel is set forth on Annex A:
i. name;
ii. residence or business address; and
iii. present principal occupation or employment and the name,
principal business and address of any corporation or other
organization in which such employment is conducted.
Item 2(d).
Markel has not, and to the best of Markel's knowledge, none of the
executive officers and directors of Markel listed on Annex A has, during the
past five years been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
Item 2(e).
Markel has not, and to the best of Markel's knowledge, none of the
executive officers and directors of Markel listed on Annex A has, during the
past five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding, was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
Item 2(f). The executive officers and directors of Markel are United
States citizens.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Markel may be deemed to have acquired shared voting power of
7,158,620 shares of Class A Common Stock (which includes 1,796,217 shares
issuable on conversion of Class B Ordinary Shares, par value US $5.80 per share
(the "Class B Common Stock" and together with the Class A Common Stock, the
"Common Stock")) pursuant to a stockholders agreement entered into on August 15,
1999 among Markel, Terra Nova and certain of Terra Nova's shareholders (the
"Stockholders Agreement"), as described more fully in Item 4 hereof. The
Stockholders Agreement was entered into in connection with, and as inducement
for Markel to enter into, an Agreement and Plan of Merger and Scheme of
Arrangement with Terra Nova, dated as of August 15, 1999 (the "Merger
Agreement"), as described more fully in Item 4 hereof. The shares of Common
Stock as to which Markel has sole voting and dispositive power were acquired
with working capital.
ITEM 4. PURPOSE OF TRANSACTION.
The Merger Agreement provides, subject to the terms and conditions set
forth therein, for (i) the merger ("Merger") of MINT Sub Ltd., a corporation to
be organized under the laws of Virginia as a wholly-owned subsidiary of Virginia
Holdings Inc. ("MINT"), a corporation to be organized under the laws of
Virginia, with and into Markel and (ii) a Scheme of Arrangement between Terra
Nova and certain of its shareholders (the "Scheme"). Upon completion of the
Merger and the Scheme, each of Markel and Terra Nova will be a wholly-owned
subsidiary of MINT, which will be renamed Markel Corporation.
The consummation of the transactions contemplated by the Merger
Agreement is subject to regulatory approvals and the satisfaction or waiver of a
number of other conditions as more fully described in the Merger Agreement.
In connection with the Merger, as an inducement to Markel to enter into
the Merger Agreement, the shareholders of Terra Nova set forth in Item 5 (each a
"Stockholder" and, collectively, the "Stockholders"), who collectively own
5,362,403 shares of Class A Common Stock and 1,796,217 shares of Class B Common
Stock representing approximately 28.3% of the outstanding Class A Common Stock
(assuming the conversion of all outstanding shares of Class B Common Stock,
which may be deemed to be beneficially owned by Markel, into shares of Class A
Common Stock), have entered into the Stockholders Agreement
Pursuant to the terms of the Stockholders Agreement, as long as the
Stockholders Agreement is in force, each Stockholder irrevocably appoints Markel
or any designee the lawful agent, attorney and proxy of such Stockholder to vote
the shares of Common Stock now owned or in the future acquired by such
Stockholder (the "Shares") (i) in favor of the Scheme, the execution and
delivery by Terra Nova of the Merger Agreement and the approval of the terms
thereof and each of the other actions contemplated by the Merger Agreement, the
Stockholders Agreement and any actions required in furtherance thereof; (ii)
against any action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of Terra Nova
under the Merger Agreement or the Stockholders Agreement; and (iii) against the
following actions (other than the Scheme and the transactions contemplated by
the Merger Agreement): (1) any extraordinary corporate transaction, such as a
merger, consolidation, amalgamation or other business combination involving
Terra Nova or its subsidiaries; (2) a sale, lease or transfer of a material
amount of assets of Terra Nova or its subsidiaries or a reorganization,
recapitalization, dissolution or liquidation of Terra Nova or its subsidiaries;
(3) (a) any change in the majority of the Board of Directors of Terra Nova; (b)
any material change in the present capitalization of Terra Nova or any material
amendment of Terra Nova's certificate of incorporation and memorandum of
association; (c) any other material change in Terra Nova's corporate structure
or business; or (d) any other action which, is intended, or could reasonably be
expected to, impede, interfere with, delay, postpone, discourage or materially
adversely affect the Scheme or the transactions contemplated by the Merger
Agreement or the Stockholders Agreement or the contemplated economic benefits of
any of the foregoing. In addition, one Stockholder has agreed to use its
commercially reasonable efforts to cause an additional 1,214,414 shares of Class
A Common Stock as to which it holds depository receipts to be voted in
accordance with the Stockholders Agreement.
The Stockholders have also agreed, while the Stockholders Agreement is in
force, to not sell, transfer, pledge, encumber, assign or otherwise dispose of,
or enter into any contract, option or other arrangement or understanding with
respect to the sale, transfer, pledge, encumbrance, assignment or other
disposition of, any of the Shares, or grant any proxies, deposit any Shares into
a voting trust or enter into a voting agreement with respect to any Shares or
take any action that would make any representation or warranty of such
Stockholder contained in the Stockholders Agreement untrue or incorrect or have
the effect of preventing or disabling such Stockholder from performing his or
its obligations under the Stockholders Agreement.
The Stockholders Agreement terminates at the earlier of the effective
time of the Merger and the Scheme or the termination of the Merger Agreement.
On August 15, 1999, Markel also entered into a Registration Rights
Agreement (the "Registration Rights Agreement") with the Stockholders pursuant
to which Markel has agreed to cause MINT to grant such stockholders certain
registration rights with respect to which MINT shares they will receive in the
transaction.
The Merger Agreement provides that the parties thereto shall procure at
the effective time of the Scheme, only those directors of Terra Nova and such
additional persons, in each case who shall be designated by MINT, shall remain
or be elected to serve as directors of Terra Nova, each of such directors to
hold office in accordance with the applicable provisions of the articles of
association of Terra Nova and until their successors shall be elected or
appointed and shall duly qualify
Following the Merger, Terra Nova will become a wholly-owned subsidiary
of MINT. The shares of common stock of Terra Nova will be delisted from the New
York Stock Exchange and will eligible for termination of registration under
Section 12(g)(4) of the Securities Exchange Act of 1934, as amended.
The Merger Agreement, the Stockholders Agreement and the
Registration Rights Agreement are incorporated herein by reference. The
descriptions of the Merger and the Scheme and the terms of the Merger Agreement,
the Stockholders Agreement and the Registration Rights Agreement, contained
herein are summaries, and qualified in their entirety by reference to the
Exhibits 7.1 through 7.3 hereto which are incorporated by reference herein.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Markel may be deemed to be the beneficial owner of 7,295,420 shares
of Class A Common Stock (approximately 28.8% of the issued and outstanding
shares of Class A Common Stock, as of August 12, 1999, as reported in Terra
Nova's Form 10-Q filed August 12, 1999 and assuming conversion of the Class B
Common Stock which may be deemed to be beneficially owned by Markel).
(b) Markel, either directly or through its wholly-owned subsidiaries,
has sole dispositive and voting power with respect to 136,800 shares of Class A
Common Stock. By reason of the Stockholders Agreement, Markel may be deemed to
share power to direct the vote of 7,158,620 shares of Class A Common Stock
(which includes 1,796,127 shares issuable on conversion of Class B Common Stock
which may be deemed to be beneficially owned by Markel) (approximately 28.3% of
the outstanding shares of Class A Common Stock) with each of the Stockholders.
The following paragraphs provide the applicable information required by
Item 2 with respect to each of the Stockholders.
The Stockholders are: DLJ International Partners, C.V., a
Netherlands-Antilles partnership, a merchant banking fund; DLJ Offshore
Partners, C.V., a Netherlands-Antilles partnership, a merchant banking fund;
DLJMB Overseas Partners, C.V., a Netherlands-Antilles partnership, a merchant
banking fund; DLJ Merchant Bank Funding, Inc., a Delaware corporation, a
merchant banking fund; DLJ First ESC, L.P., a Delaware limited partnership, an
employee securities company; Donaldson, Lufkin & Jenrette Securities Corp., a
Delaware corporation, a full line investment bank; Marsh & McLennan Capital,
Inc., a Delaware corporation, which provides services in connection with
originating, structuring and managing insurance and related industry
investments; and John J. Byrne, an individual investor.
To the best of Markel's knowledge, the business address of each of the
Stockholders is as described on Exhibit A to the Stockholders Agreement, other
than the address for John J. Byrne whose principal business address and
principal offices are located at 80 South Main Street, Hanover, NH 03755.
To the best of Markel's knowledge, none of the Stockholders has,
during the past five years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors), or has, during the past five years,
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and is not and has not been as a result of such
proceeding, subject to a judgment, decree, or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
The information relating to the Stockholders contained herein is based
on information received from the Stockholders or publicly available.
(c) Except as described in Item 4, none of Markel, its executive
officers or directors has effected any transactions in the Class A Common Stock
in the last sixty days other than purchases in the open market by Markel on
August 17, 1999 of 64,400 shares at a price of $31.189 per share.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Except for the Merger Agreement, the Stockholders Agreement and the
Registration Rights Agreement, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among the persons named in
Item 2 and between Markel and, to the knowledge of Markel, the executive
officers and directors of Markel and any other person with respect to any
securities of Terra Nova.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit No.
- -----------
7.1 The Agreement and Plan of Merger and Scheme of Arrangement
between Markel Corporation and Terra Nova (Bermuda) Holdings
Ltd. dated as of August 15, 1999 filed as Exhibit 99.1 to
Markel's Form 8-K filed August 20, 1999 (the "Form 8-K"), is
incorporated herein by reference.
7.2 The Stockholders Agreement by and among Markel Corporation,
Terra Nova (Bermuda) Holdings Ltd. and other parties
signatories thereto dated as of August 15, 1999 filed as
Exhibit 99.2 to the Form 8-K is incorporated herein by
reference.
7.3 Registration Rights Agreement, dated as of August 15, 1999,
among Virginia Holdings Inc., Markel Corporation and the
shareholders of Terra Nova (Bermuda) Ltd. filed as Exhibit
99.4 to the Form 8-K is incorporated herein by reference.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
MARKEL CORPORATION
August 25, 1999 By: /s/ Steven A. Markel
----------------------
Steven A. Markel
Vice Chairman
<PAGE>
ANNEX A
The directors of Markel are as follows:
Alan I. Kirshner, Chairman
Anthony F. Markel
Steven A. Markel, Vice Chairman
Darrell D. Martin
Thomas S. Gayner
Leslie A. Grandis
Stewart M. Kasen and
Gary L. Markel
The executive officers of Markel are as follows:
<TABLE>
<S> <C>
Chairman of the Board of Directors and Chief Executive Officer Alan I. Kirshner
President and Chief Operating Officer Anthony F. Markel
Vice Chairman Steven A. Markel
Executive Vice President and Chief Financial Officer Darrell D. Martin
</TABLE>
If no business or residence address is given, the executive officer's
or director's business address is Markel Corporation, 4551 Cox Road, Glen Allen,
Virginia 23060-3382.
<TABLE>
<CAPTION>
Name and Address Principal Occupation
<S> <C>
Alan I. Kirshner Chairman of the Board of Directors and Chief Executive
Officer of Markel Corporation
Anthony F. Markel President, Chief Operating Officer and Director of Markel
Corporation
Steven A. Markel Vice Chairman and Director of Markel Corporation
Darrell D. Martin Executive Vice President, Chief Financial Officer and
Director of Markel Corporation
Leslie A. Grandis Partner, McGuire, Woods, Battle & Boothe LLP.
McGuire, Woods, Battle & Boothe LLP
One James Center, 901 East
Cary Street, Richmond, VA 23219
Stewart M. Kasen Chairman, President and Chief Executive Officer of
Factory Card Outlet Corp.
Gary L. Markel President, Gary Markel & Associates, Inc
Gary Markel & Associates, Inc.
9700 Ninth Street North
St. Petersburg, Florida 33702
</TABLE>
