E XHIBIT 10.3
M ARKEL C ORPORATION
E XECUTIVE B ONUS P LAN
1. Purpose . The purpose of the
Markel Corporation Executive Bonus Plan (the “Plan”) is
to provide a performance-based incentive for executive officers who
are in a position to contribute materially to the success of the
Company and its Subsidiaries.
2. Definitions.
(a) “Award” means an
award made pursuant to the Plan.
(b) “Award Agreement”
means the agreement entered into between the Company and a
Participant, setting forth the terms and conditions applicable to
an Award granted to the Participant.
(c) “Board” means the
Board of Directors of the Company.
(d) “Code” means the
Internal Revenue Code of 1986, as amended.
(e) “Code section 162(m)
Award” means an Award intended to satisfy the requirements of
Code section 162(m) and designated as such in an Award
Agreement.
(f) “Committee” means
the committee appointed by the Board as described under Section
4.
(g) “Company” means
Markel Corporation, a Virginia corporation.
(h) “Covered Employee”
means a covered employee within the meaning of Code section
162(m)(3).
(i) “Executive Employee”
means all executive officers (as defined in Rule 3b-7 under the
Securities Exchange Act of 1934, as amended) of the Company (or any
Parent or Subsidiary of the Company, whether now existing or
hereafter created or acquired).
(j) “Parent” means, with
respect to any corporation, a parent of that corporation within the
meaning of Code section 424(e).
(k) “Participant” means
an Executive Employee selected from time to time by the Committee
to participate in the Plan.
(l) “Performance Award”
means an award based on Performance Criteria and the percentage(s),
as set forth in an award schedule, that will, when multiplied by a
Participant’s base salary, determine the amount of the
Participant’s Award.
(m) “Performance
Criteria” means the criteria selected by the Committee to
measure performance for a Plan Year or Plan Years based on growth
in book value. Book value for purposes of a Performance Award may
be increased or decreased by the Committee to reflect transactions
not in the ordinary course which may affect book value, including
but not limited to, share issuances or conversions, share
repurchases, dividends, distributions or other transactions
affecting book value.
(n) “Plan Year” means
the fiscal year of the Company.
(o) “Subsidiary” means,
with respect to any corporation, a subsidiary of that corporation
within the meaning of Code section
424(f).
3. Eligibility . All present and
future Executive Employees shall be eligible to receive Awards
under the Plan. The Committee shall have the power and complete
discretion to select eligible Executive Employees to receive Awards
and to determine for each Participant the terms and conditions and
the amount of each Award.
4. Awards.
(a) Each Performance Award shall be
evidenced by an Award Agreement setting forth the Performance
Criteria, the scale of possible payments based on achievement of
that criteria, the maximum bonus payable and such other terms and
conditions applicable to the Award, as determined by the Committee,
that are not inconsistent with the terms of the Plan. Anything else
in this Plan to the contrary notwithstanding, the aggregate maximum
amount payable under the Plan to any Participant in any Plan Year
shall be equal to the lesser of 250 percent of the
Participant’s base salary or $2,500,000. In the event of any
conflict between an Award Agreement and the Plan, the terms of the
Plan shall govern.
(b) The Committee may vary the
Performance Criteria, and Performance Awards, from Participant to
Participant, Award to Award and Plan Year to Plan Year. The
Committee may increase, but not decrease, any Performance Criteria
after an Award has been made.
(c) All determinations regarding the
achievement of any Performance Criteria will be made by the
Committee; provided, however, that the Committee may not increase
the amount of the Award that would otherwise be payable upon
achievement of the Performance Criteria. All calculations of actual
Awards shall be made by the Committee.
(d) Awards will be paid in a
lump-sum cash payment as soon as practicable (and in any case no
later than two and one-half months) after the close of the Plan
Year for which they are earned; provided, however, that no Awards
shall be paid except to the extent that the Committee has certified
in writing that the Performance Criteria have been
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met. Notwithstanding the foregoing provisions of
this section 4(d), the Committee shall have the right to allow
Participants to elect to defer the payment of Awards subject to the
terms and conditions of Code section 409A and such other terms and
cond
