EXHIBIT 10.1

MARKEL CORPORATION

EMPLOYEE STOCK PURCHASE AND BONUS PLAN

This document provides information about a total of 100,000 shares of the Common Stock, no par value (“Common Stock”), of Markel Corporation (the “Company”) which may be acquired by employees and Directors of the Company and its subsidiaries under the Company’s Employee Stock Purchase and Bonus Plan (the “Plan”). This document also provides information about a Loan Program (the “Loan Program”) to facilitate purchases of shares of the Company’s Common Stock under the Plan. Under the Loan Program an eligible participant may borrow an amount equal to the full purchase price of shares of Common Stock purchased under the Plan (a “Loan”).

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS

COVERING SECURITIES THAT HAVE BEEN

REGISTERED UNDER THE SECURITIES

ACT OF 1933 (the “1933 Act”).

DATE: May 31, 2007

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INTRODUCTION TO THE PLAN

The Company has adopted the Markel Corporation Employee Stock Purchase and Bonus Plan in a continuation of the Company’s efforts to encourage share ownership by employees and Directors. The Plan provides an easy method for making purchases of the Company’s Common Stock and also encourages share ownership by providing a share bonus based on the net increase in the number of shares of Common Stock purchased under the Plan by an employee or Director in a given year. A description of the Loan Program feature of the Plan begins on page 6. The Plan is not subject to the Employee Retirement Income Security Act of 1974 (“ERISA”) and will be administered by the Company’s Human Resources Department in Glen Allen, Virginia. You may obtain additional information about the Plan and its administration by contacting Human Resources at (804) 747-0136.

PLAN ELIGIBILITY

All full-time and part-time employees of the Company or its designated subsidiaries are eligible to participate in the Plan. Subject to certain conditions, non-employee Directors of the Company are also eligible to participate. An eligible Participant may elect to participate in the Plan by completing an enrollment form (available from your Human Resources Department or on the Company Intranet) and an IRS W-9 or W-8 Form (also available from your Human Resources Department or on the Company Intranet).

An eligible Participant may elect to participate at any time, may make changes in the amount of deductions at any time and may also terminate participation at any time by sending written instructions directly to the Human Resources Department. Elections will become effective as soon as practicable following the receipt of the election or change form by the Human Resources Department.

Participation in the Plan will automatically terminate in the payroll period following the date an employee ceases to be a full-time or part-time employee or for Directors, on the date a Director ceases to serve as a Director of the Company.

NON-EMPLOYEE DIRECTOR PARTICIPANTS

Non-employee Directors of the Company may participate in the Plan subject to the following conditions: (i) shares purchased under the Plan and Awards made under the Plan must be held at least six months before they may be withdrawn from the Plan or otherwise sold or disposed of by the Director (the Director’s election to participate in the Plan authorizes the imposition of transfer restrictions as necessary to implement this provision); (ii) stock purchases made by a Director under the Plan may not exceed the amount of annual fees paid to the Director

 

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by the Company (including any incentive payments under the Loan Program); and (iii) if a Director ceases participation in the Plan, he or she may not participate again for at least six months. Directors may no longer receive new loans under the Loan Program.

All other applicable plan provisions apply to a non-employee Director’s participation in the Plan.

METHOD FOR MAKING STOCK PURCHASES

At the time of enrollment an eligible Participant will specify the amounts to be invested and the Company will regularly deduct the specified amount from the Participant’s pay. The Participant may also elect to purchase shares other than by payroll deduction provided each such purchase is for an amount of at least $500/£300. Deductions or contributions made in currencies other than U.S. Dollars will be converted by the Company into U.S. Dollars at the then existing exchange rate as reasonably determined by the Company. Amounts contributed will be combined with all the money contributed by other Participants, if any, and then sent to the stock plan record keeper (the “Record Keeper”), who will then forward the amounts to one or more brokers (collectively the “Investing Broker”) to be used to purchase Common Stock at market prices current at the time of purchase. Purchases may be made on the open market or directly from the Company. The amount of all Participants’ deductions or contributions will be forwarded by the Company to the Record Keeper at least once a payroll cycle for payroll deduction purchases and as soon as practicable for lump sum and Loan Program purchases. Purchases will be made by the Record Keeper, upon receipt of the funds, no less frequently than once a payroll cycle for payroll deduction purchases and as soon as practicable for lump sum and Loan Program purchases. The purchase price for a Participant’s stock will be determined by the average of the market prices for the Common Stock purchased for all Participants in connection with the same purchase order placed by the Record Keeper.

Each Participant must specify on the Enrollment Form the amount to be withheld from his or her gross paycheck (multiples of $/£5, minimum of $25/£15 per pay period), and such deductions will remain in effect until the Participant files a new Enrollment Form or elects to terminate deductions.

The current Record Keeper is AST Equity Plan Solutions, a division of American Stock Transfer & Trust Company, and the current Investing Broker is Wachovia Securities.

 

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FEES AND EXPENSES

The Company will pay the Investing Broker’s fees for stock purchases made for Participants. The Company will also pay for the cost of administering the stock bonus feature of the Plan described below. The Investing Broker fees and other charges in connection with sales, or in connection with purchases of Common Stock or other securities not made under the Plan will be payable directly by the Participant ordering such transactions.

PARTICIPANTS’ ACCOUNTS WITH THE RECORD KEEPER

The Record Keeper will open and maintain an individual account for each Participant and will make purchases of Common Stock for the Participant’s account using deductions and contributions made for the Participant. Participants’ accounts will be credited with amounts that would represent “fractional shares.” Under this feature, cash amounts which are not sufficient to purchase whole shares will be credited to a Participant’s account as fractional interests. Certificates for fractional shares will not, however, be issued. Upon sale or distribution, a Participant will receive cash for such fractional interests based on the then current market price of the Common Stock as determined by the Record Keeper.

Each Participant will receive a statement each quarter as long as there is a balance in his or her account and all notices of meetings, proxy statements and any other material distributed by the Company for the benefit of its stockholders. A Participant may call the Record Keeper from the U.S. toll-free at 866-709-7704 or from the U.K. at (718) 921-8348 to obtain certain account information and assistance. A Participant may also access certain account information online by visiting the Record Keeper’s internet site at www.astepsinc.com. These procedures may be changed in the future. The Company will not be responsible for keeping records with respect to the Plan other than for payroll purposes and for purposes of determining the Stock Bonus Awards described below. All other record keeping will be done by the Record Keeper. The Company may receive information about a Participant’s account, including purchases and sales, under the Plan.

STOCK BONUS AWARDS

Participants will receive a stock bonus of ten percent of the net increase in shares of Common Stock purchased under the Plan during a given year (a “Stock Bonus Award”). Stock Bonus Awards will be based on the net number of shares of Common Stock purchased from January 1 through December 31 of a given year and will be issued to or on behalf of a Participant not later than March 31 following the end of the year. An employee will not receive a Stock Bonus Award unless he or she is an eligible Participant not on probation on the date the Stock Bonus Award is made. Stock Bonus Awards will not be counted as an increase in the number of shares purchased by a Participant during a calendar year.

 

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Unless other arrangements satisfactory to the Company in its sole discretion are made, the net increase in the number of shares purchased under the Plan will be based on statements provided by the Record Keeper and the Company will be entitled to rely conclusively on such statements in determining Stock Bonus Awards to be made under the Plan. Because Stock Bonus Awards will be determined by reference to the statements of the Record Keeper, any requests by a Participant for the issuance of shares in certificated form may cause those shares not to be reflected on the statements and accordingly not to be counted for purposes of determining the Stock Bonus Award.

No Stock Bonus Award will be made for an increase in the number of shares of Common Stock held resulting solely from a subdivision or consolidation of shares, the payment of a stock dividend, a stock split or other change in capitalization. Stock Bonus Awards will be appropriately adjusted to reflect the effects of such a change.

SALE OF SHARES

Each Participant may sell all or part of his or her stock by contacting the Record Keeper directly. Sales will be processed as soon as practicable on a daily basis. A Participant will be responsible for any sales or brokerage commission incurred in connection with a sale of shares. The right to receive a Stock Bonus Award may not be sold or transferred.

Persons who are “affiliates” of the Company within the meaning of applicable federal securities laws and regulations (which, in general, means the executive officers and directors of the Company) may not resell shares of Common Stock acquired under the Plan in the absence of an effective registration statement under the 1933 Act or the availability of an exemption from such registration, such as the one afforded by Rule 144 of the 1933 Act. The acquisition of shares of Common Stock by executive officers and non-employee Directors (including the acquisition of shares by bonus awards) as well as any subsequent resale of such shares may be subject to Section 16 of the Securities Exchange Act of 1934 (the “1934 Act”) and the rules issued thereunder regarding “short swing” trading.

TAX CONSEQUENCES OF PLAN PARTICIPATION

Stock Bonus Awards and Special Stock Bonus Awards are subject to applicable income withholding requirements and, unless the Company in its sole discretion accepts another arrangement for the payment of such withholding, that withholding will be deducted from the employee’s first paycheck following receipt of an Award. Stock Bonus Awards received by non-employee Directors will not be subject to withholding (unless a Director is subject to back-up withholding) but may need to be considered by Directors when making estimated tax payments.

Stock purchases made under the Loan Program will be made with after tax dollars and will not have a tax impact on the employee or provide a tax deduction for the Company.

 

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LOAN PROGRAM

ELIGIBILITY

The Loan Program is available to all regular full-time and part-time employees of the Company and its designated subsidiaries. New Loans under the Loan Program are not available to (x) Directors and Executive Officers, (y) employees who are on probation and (z) employees who are employed (i) to perform a specific assignment, (ii) for a period of time of limited duration, (iii) at a location, business unit or division that is being closed, or (iv) who have failed, when required, to execute and deliver an Employee Secrecy and Non-Piracy Agreement. New Loans under the Loan Program are also not available to employees who participated in the Loan Program or a previous loan program and who have disposed of their stock when such disposal was not previously approved by the Company’s Human Resources Department. All requests by eligible employees to participate in the Program are subject to approval, disapproval or reductions in loan amount by the Executive Officers of the Company.

LEVELS OF PARTICIPATION

In order to participate in the Loan Program, a participant must agree to borrow a minimum of $10,000/£6,000. If an employee’s base salary is less than $50,000/£30,000, the maximum aggregate principal amount outstanding of all Loans to the employee under the Loan Program generally will be limited to 50% of the employee’s base salary. If an employee’s base salary is greater than or equal to $50,000/£30,000, the maximum aggregate principal amount outstanding of all Loans available to the employee under the Loan Program generally will be limited to 100% of base salary. In either case, the Executive Officers of the Company may, in their sole discretion and if requested, approve a greater amount up to a maximum of four times base salary or, under special circumstances, $1,000,000/£600,000. The aggregate principal amount outstanding of all Loans to an employee may not exceed $1,000,000/£600,000 without the approval of the Company’s Board of Directors or the Compensation Committee of the Board of Directors.

LOAN TERMS

Amount

The Loan to an employee will be in an original principal amount equal to $10,000/ £6,000 and increments above that amount of $2,500/£1,500, as selected by the employee. The Loan will be unsecured but will be full recourse to the employee. This means the Loan will represent an unconditional promise to repay the principal amount borrowed plus accrued interest irrespective of the value of the shares of Common Stock purchased under the Plan. Any unpaid principal and interest on the Loan will be due on April 1 of the tenth year from the year the Loan is made. Loans may become due and payable at earlier times upon the occurrence of certain events. See “Other Terms” below.

 

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Interest

The Loan will accrue interest from the date on which shares are purchased (“Closing”) until paid in full at a rate of 3% per year. The interest rate may increase if any of the shares (including Special Stock Bonus Awards) acquired under the Loan Program or previous loan programs are sold, pledged or otherwise transferred except as permitted by the Plan. See “Other Terms” below.

Payments

If the original principal amount of the Loan is less than $25,000/£15,000, payment must be made by bi-weekly or monthly payroll deductions, as applicable, which will begin as soon as practicable after Closing. If the Loan amount is greater than or equal to $25,000/£15,000, an employee may elect to make annual payments on March 31 of each year. For annual payment loans made during the first calendar quarter of the year the full annual payment will be due on the following March 31; for annual payment loans made in the second calendar quarter the first payment due will be 75% of the annual amount; for annual payment loans made in the third calendar quarter the first payment due will be 50% of the annual amount and for loans made in the fourth quarter the first payment due will be 25% of the annual amount. All payments must be made in the currency in which the Loan is originally made.

Payment amounts, whether bi-weekly, monthly or annual, will be based on a 3% interest rate per annum and assuming full amortization of the Loan over a 15-year term. The Loan will, however, be due and payable in full on April 1 of the tenth year from the year the loan is made; for example a loan made in August 2007 will be due and payable on April 1, 2017. There will be a balloon payment of remaining principal and accrued interest due at maturity.

The following table gives the payment amounts (both recurring and balloon) per $/£1,000 borrowed for biweekly (North American operations), monthly (International operations) and annual payments (all operations). For purposes of calculating the balloon payment the loan is assumed to begin on August 1 of a given year.

 

		Recurring amount		Balloon amount
Bi-weekly		3.17		405.82
Monthly		6.90		408.42
Annual		83.78		424.95

 

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Other Terms

All Loans under the Loan Program may be prepaid at any time. Prepayments will be applied first to accrued but unpaid interest and then to principal. Unless a prepayment is equal to or greater than 10% of the then outstanding Loan balance, prepayments will not change the amount of required payments; they will instead reduce the balance of the Loan resulting in a smaller balloon payment or full repayment before the normal maturity date. If a prepayment is equal to or greater than 10% of the then outstanding Loan balance the Company will, at a Participant’s request, prepare a new payment schedule which will provide for the repayment of the remaining Loan balance at the original maturity date in substantially equal installments (either by-weekly or annual, as applicable) on the terms described above.

A Loan will become due and payable at the option of the Company upon (i) the failure by an employee to make any payment when due; (ii) an employee’s insolvency, application for appointment of receiver, filing of a petition under any bankruptcy law or the making of an assignment for the benefit of creditors; (iii) an employee’s death or long-term disability or (iv) termination of employment with the Company or its subsidiaries, whether voluntary or involuntary, by reason of retirement or otherwise. Loans become due and payable, at the Company’s option, six months after termination of employment due to downsizing or reduction in force and 90 days after termination of employment for other reasons, but in no event later than March 15 of the