Document:

Letter Agreement, effective as of July 25, 2007

 Exhibit 10.1 
  

			
	 

	  	CONSOL Energy Inc.
		  	Consol Plaza
		  	1800 Washington Road
		  	Pittsburgh, PA 152411405
		
		  	phone: 412/831-4517
		  	Fax: 412/831-4930
		
		  	e-mail: jerryrichey@consolenergy.com
		  	Web: www.consolenergy.com
		
		  	P. JEROME RICHEY
		  	Senior Vice President and General Counsel

 July 24, 2007 
 Mr. Ronald E. Smith 
 141 Druid Drive 
 McMurray, PA 15317 
 Dear Ron: 
 This
letter will summarize our agreement regarding your claim for an accrued benefit under the Retirement Restoration Plan (the “Plan”) of CONSOL Energy, Inc. (“CONSOL”) based on your 2006 compensation from CNX Gas Corporation (the
“Company”), as well as certain other matters. 
 On behalf of the executive management of CONSOL, I want to thank you for your
outstanding contributions to CONSOL and to the Company during your many years of service and wish you a healthy and happy retirement. 
 CONSOL agrees to pay you as a lump sum $1,144,863.05, less deductions required by law (the “Payment”), within seven (7) business days of the execution of this letter. You understand that you are responsible for all taxes
on the Payment and are in agreement with the form and timing of the Payment. The Payment is made in exchange for the promises contained in this letter, and also in connection with resolution of a disputed claim. The disputed claim is
described in a letter dated February 12, 2007 from your attorney Gary Gunnett to CONSOL, and is incorporated herein by reference. You essentially believe that your benefit for purposes of the Special Election under section IIIF of the Plan that
you received earlier this year was not calculated correctly and that the payment you received should have been higher. 
 In consideration of
the Payment, you acknowledge and agree as follows: 
 (1) effective March 26, 2007, you elected to retire from the Company.

 (2) you have no further claim for any monies or benefits whatsoever arising out of the Plan and you are not entitled to any other
“top hat” or non-qualified deferred compensation benefits or payments, or severance or termination benefits from CONSOL or the Company (or any plan CONSOL or the Company may sponsor), either now or in the future. Your claim for
benefits as set forth in the February 12, 2007 letter is hereby forever withdrawn without the ability to refile. In addition, you acknowledge that you have no right to or accrued benefits in the Supplemental Retirement Plan approved and
adopted by the Board of Directors of CONSOL Energy Inc. at its December 5, 2006 meeting, effective January 1, 2007. 

 Mr. Ronald E. Smith 
 July
24, 2007 
 Page 2 
 (3) you confirm you are
unaware of any fact or information to support any claim, demand, obligation, liability, damage or cause of action against CONSOL, the Company, their related companies or the Plan, and their current and former directors, officers, agents,
administrators and employees. Without limiting the generality of the foregoing, you confirm that you do not know of any alleged violation of any express or implied contract or state law, Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the Sarbanes Oxley Act, the Pennsylvania Human Relations Act, the Pennsylvania Wage Payment and Collection Law, and any other state, federal or
local law, rule or regulation. You further confirm that you were not constructively discharged from your employment with the Company and have no right to be employed by CONSOL or the Company. 
 We appreciate your willingness to make yourself available at reasonable times, upon reasonable notice, for business consultations or for depositions or
court appearances or to otherwise assist and cooperate with CONSOL and the Company and any lawyers, consultants or other person that CONSOL and the Company may designate in the investigation, defense and/or settlement of any asserted or threatened
litigation, administrative proceedings and/or administrative investigations against or concerning CONSOL and the Company, including truthfully testifying in connection with any such matter which arose prior to the date hereof and as to which you
obtained direct or indirect knowledge or information during your tenure with CONSOL and the Company. If your cooperation is not compelled by process of law and CONSOL and the Company require your assistance, then CONSOL or the Company shall pay
reasonable compensation to you for your time, in an amount to be agreed upon by the parties, and shall reimburse you for your reasonable travel and other expenses incurred to assist CONSOL and the Company. 
 If the above is agreeable to you, please sign the enclosed copy of this letter and return it for me for our files. 
  

	
	 Very truly yours,

	
	 /s/ P. Jerome Richey

	 P. Jerome Richey

  

	
	 ACKNOWLEDGED AND AGREED TO THIS

	 25th DAY OF July, 2007,

	INTENDING TO BE LEGALLY BOUND HEREBY.
	
	 /s/ Ronald E. Smith

	
	 PJR/jm

	 Enclosure

	
	 cc: Gary J. GunnettEmployee Stock Purchase and Bonus Plan

 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 

 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. 
  

 3 

 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. 
  

 5 

 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. 
  

 6 

 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 year
following termination for employees who are “specified employees” for purposes of Section 409A of the Internal Revenue Code. 
 Because the Loan Program is designed to encourage long-term employee ownership of Common Stock, if any shares of Common Stock acquired by a Participant under the Loan Program or previous loan programs (including the Special Stock Bonus
Award) are sold, pledged or otherwise transferred, the interest rate on the Loan will be immediately adjusted to a market rate which the Company has determined to be the Prime Rate plus 7%, and payments will also commence immediately at the higher
rate. For those making payments by bi-weekly or monthly payroll deduction the payment amount will immediately increase. For those making annual payments, the next payment which would otherwise be due will be immediately due and payable and
the remaining annual payment amounts will be increased to reflect the higher rate on the Loan. If a Participant withdraws any such shares from his or her account with the Record Keeper, the Participant must make arrangements satisfactory to the
Company regarding the registration and/or custody of the share certificates so that the Company can determine the interest rate and payment terms applicable to the Participant’s Loan; a failure to make such arrangements will result in the
interest rate and payment terms being adjusted as described above. 
 The Company will consider waiving the foregoing interest rate and
payment adjustments if the purpose of the sale is (x) to fund a medical emergency or other financial hardship or (y) to fund an educational need. Any such waiver must be approved by the Company’s Human Resource Department in advance.

  

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 In addition, the interest rate and payment adjustments will not apply if after giving effect to the sale
the then current market value of the shares held in a Participant’s account with the Record Keeper equals or exceeds two times the then existing Loan balance. 
 Neither a Loan nor any rights or obligations thereunder will be transferable by the Participant except by will or the laws of descent and distribution. The promissory note evidencing the Loan may be sold or
transferred by the Company. 
 SPECIAL STOCK BONUS AWARD 
 Participants in the Loan Program will receive a stock bonus of five percent of the number of shares of Common Stock purchased under the Loan Program (a “Special Stock Bonus Award”). Neither shares purchased
under the Loan Program nor Special Stock Bonus Awards will be counted as an increase in the number of shares purchased by a Participant during a calendar year under the Plan for purposes of determining regular Stock Bonus Awards. The timing of the
delivery of a Special Stock Bonus Award to or on behalf of a Participant will be as determined by the Executive Officers of the Company. No Special Stock Bonus Award will be made for an increase or decrease in a 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. Special Stock Bonus Awards will be appropriately adjusted to reflect the effects of such a change.

 COMPANY INCENTIVE PAYMENTS 
 In connection with the Loan Program the Company will provide an incentive payment based on a five-year compound annual growth in book value (“Company Incentive Payment”) as follows: 
 Directors and Executive Officers 
 For Directors and Executive
Officers with Loans in effect on July 30, 2002 (“Grandfathered Loans”), the scale used to determine the Company Incentive Payment and the method used to calculate the five-year compound annual growth in book value (“CAGBV”)
will remain identical to that in effect on July 30, 2002. 
  

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 All Other Participants 
 For all other Participants, the scale used to determine the Company Incentive Payment and the method used to calculate the five-year CAGBV will be as follows: 
  

				
	 5 year Compound Annual
 Growth in Book Value
	  	Company Incentive Payment
as % of Original Loan Balance	 
	Under 11%	  	0	%
	11%	  	1.25	%
	12%	  	1.50	%
	13%	  	2.00	%
	14%	  	2.50	%
	15%	  	3.00	%
	16%	  	3.75	%
	17%	  	4.50	%
	18%	  	5.00	%
	19%	  	5.50	%
	20%	  	6.25	%
	21%	  	7.25	%
	22%	  	8.50	%
	23%	  	10.00	%
	24%	  	12.50	%
	Over 24%	  	Discretionary	 

 For purposes of calculating the CAGBV, (i) book value will not be adjusted to exclude the benefit of issuing
equity securities before January 1, 2003 at prices above the preceding year-end book value or to exclude goodwill amortization costs resulting from transactions in which equity securities were issued, and (ii) book value will be adjusted
to exclude the benefit of issuing equity securities after January 1, 2003, at prices above the preceding year-end book value. 
 The Board of
Directors may amend the scale as well as the method used to calculate CAGBV at any time or from time to time in such respects as it deems advisable in order to respond to changes in the interest rate environment or other factors affecting the CAGBV,
and all such modifications will apply to all Loans (other than Grandfathered Loans) then outstanding under the Loan Program. 
 Payment of Company
Incentive Payment 
 One-half of the calculated annual incentive payment will be applied to a Participant’s outstanding indebtedness to reduce the
amount of the required balloon payment or the Loan balance and one-half of the calculated annual incentive payment, net of taxes required to be withheld on the entire Company Incentive Payment, will be paid directly to the associate by March 31
of a given year. 

  

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If a Loan commitment is received on or before July 1 of a year, a Participant will be eligible for one-half of the applicable incentive payment, if any,
for the year in which the loan is made. A Participant will not receive a Company Incentive Payment unless he or she is an eligible Participant not on probation on the date the Company Incentive Payment is made. 
 METHOD OF PURCHASES 
 In order to
participate in the Loan Program, each eligible Participant must complete and return a Loan Program Enrollment Agreement to Human Resources. The Enrollment Agreement is available from your Human Resources Department and the Markel Corporation and
Markel International intranet websites. Upon execution of the Enrollment Agreement, the Participant irrevocably agrees, subject to any applicable disclosure requirements, to borrow the amount indicated in the Enrollment Agreement and agrees to
execute and deliver promissory notes and other agreements that the Company deems necessary or appropriate to implement the Loan Program. Each Enrollment Agreement is subject to acceptance or rejection by the Company, in whole or in part. The Record
Keeper will make purchases as soon as practicable under the Loan Program. The purchase price for a Participant’s stock will be determined by the average price paid for all of the Common Stock purchased for all Participants in connection with
the same purchase order placed by the Record Keeper. Shares acquired under the Loan Program may be purchased in the open market or from the Company. 
 A Participant will have full shareholder rights with respect to shares of Common Stock acquired under the Loan Program including the right to vote the shares. A Participant has the right to sell, pledge or otherwise
dispose of such shares; however such actions may result in a higher interest rate and adjusted payment terms. 
 UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES 
 The following is a summary of the U.S. Federal income tax consequences to the Company and participants under
the Plan. It is general and does not purport to be complete. There may also be applicable state and local taxes. In addition, in some cases it may be important to consider the effect, if any, of gift, estate and inheritance taxes. 
 NO REPRESENTATION RESPECTING THE TAX TREATMENT OF ANY LOAN HAS BEEN MADE TO A PLAN PARTICIPANT. PLAN PARTICIPANTS ARE URGED TO CONSULT THEIR COUNSEL,
ACCOUNTANTS, OR OTHER TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF LOANS GRANTED TO THEM IN RELATION TO THEIR OWN PARTICULAR TAX SITUATION. 
 Stock purchases made with employee or Director deductions will be made with after-tax dollars and will not have a tax impact on the Participant or provide a tax deduction for the Company. Stock Bonus Awards and Special Stock Bonus Awards
will generally be deemed 

  

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compensation income to a Participant in an amount equal to the fair market value of the shares on the date the shares are credited to the Participant’s
account. The Company will also receive an income tax deduction in an amount equal to the amount of compensation recognized by the Participant. 
 For
Participants 
 The following is general information about tax consequences of the features of the Plan described below under present
Federal income tax law and existing, temporary and proposed regulations, which are subject to change at any time. 
 Special Stock Awards

 A participant will receive a stock bonus of five percent of the number of shares of Common Stock purchased under the loan program (see
“Special Stock Bonus Award” above) for which no consideration will be paid. The Special Stock Bonus Award will be taxable compensation to the extent of the fair market value on the date of receipt of the number of shares of Common Stock
that constitute the Special Stock Bonus Award. The award will be subject to federal and state income tax withholding and employment taxes. 
 Company Incentive Payment 
 A participant may receive an incentive payment based on the Company’s compound average
growth in book value (see “Company Incentive Payment” above). One-half of this payment will be made in cash and one-half will be applied to reduce the balance of a Participant’s loan. The full amount of the incentive payment will be
taxable compensation and will be subject to federal and state tax withholding and employment taxes. 
 Loans 
 The Internal Revenue Code provides that where the interest rate payable on a loan is less than the applicable federal rate (the “AFR”), the loan
is a “below market loan” and in such case an amount known as “foregone interest” is treated as transferred from the lender to the borrower, and retransferred by the borrower to the lender as interest. Unless you are notified
otherwise, your loans under the Plan are compensation-related “below market loans” to which the AFR rules apply. Accordingly, in any calendar year in which the aggregate loans outstanding between the Company and a Participant exceed
$10,000, the amount of “foregone interest” must be determined. If the loan remains outstanding for an entire calendar year, the amount of the “foregone interest” is the excess of (a) the result produced when the appropriate
AFR is multiplied by the principal amount of the loan, over (b) the sum of all amounts payable as interest on the loan allocable to the calendar year. The AFR is published by the Internal Revenue Service periodically and is determined when the
loan is made. If the loan is outstanding for part 

  

 12 

 
of a calendar year, the AFR regulations specify the methodology for determining foregone interest for the part of the calendar year the loan was deemed
outstanding. The participant will have imputed taxable income and imputed interest expense equal to the foregone interest each year the loan is outstanding. 
 If the Common Stock purchased with a loan under the Plan is sold, pledged or withdrawn (see “Other Terms” above) or for any other reason the terms of the loan are adjusted and as a result the interest rate
on the participant’s loan is increased so that the rate equals or exceeds the AFR (as described above), the amount of foregone interest and imputed income for that year may be reduced or eliminated with respect to the period following the
interest rate adjustment. 
 Imputed interest (as described above) is treated as the payment of investment interest by the participant.
Individual taxpayers may deduct investment interest only to the extent of their net investment income for the year. Net investment income is the excess of investment income over investment expenses for the year. Investment income consists of
(1) gross income from property held for investment, such as interest and dividends, (2) any net gain from disposition of investment property other than net capital gain (net long-term capital gain in excess of net short-term capital loss),
and (3) any net capital gain which a participant elects to include in investment income thereby foregoing the beneficial capital gain tax rate. Investment income does not include imputed income resulting from the application of the AFR
rules. Investment expenses are deductible expenses other than interest which are directly related to the production of investment income (after applying the 2% of adjusted gross income floor). Investment interest that is not deductible in a year may
be carried over and deducted in future years, subject to the applicable limitations. 
 Income imputed to a participant under the AFR rules
is not subject to income tax withholding, but is subject to tax and withholding under the Federal Insurance Contributions Act (Social Security). Such withholding will be made periodically from a Participant’s paycheck. The Company is required
to report the amount of the imputed income on the participant’s W-2 each year. In addition, the Company will timely furnish each participant with the information pertaining to the amount and computation of foregone interest. 
 The principal amount of a loan to acquire Common Stock will be the participant’s tax basis for the purpose of determining gain or loss on the
subsequent sale or exchange of the Common Stock. 
 For the Company 
 The Company usually will be entitled to a business expense deduction at the time and in the amount that the participant recognizes ordinary income in connection with a loan or upon the receipt of a Special Stock Bonus
Award or Company Incentive Payment. In addition, any payments of loan interest by the participant to the Company would be taxable income to the Company. Generally, the Company is not taxed on a participant’s repayment of principal of a loan.

  

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 In addition, Section 162(m) of the Internal Revenue Code generally imposes a $1,000,000 limitation
on the annual compensation deduction allowable to a publicly held corporation in respect of its chief executive officer and its other four most highly paid officers. This section may limit the Company’s deductions for payments under the Plan.

 UNITED KINGDOM TAX CONSEQUENCES 
 The
following is a summary of the UK income tax and National Insurance Contributions (“NIC”) consequences to the participants under the Plan. It is general and does not purport to be complete. 
 NO REPRESENTATION RESPECTING THE TAX TREATMENT OF ANY LOAN HAS BEEN MADE TO A PLAN PARTICIPANT. PLAN PARTICIPANTS ARE URGED TO CONSULT THEIR ACCOUNTANT OR OTHER TAX
ADVISOR REGARDING THE TAX CONSEQUENCES OF LOANS GRANTED TO THEM IN RELATION TO THEIR OWN PARTICULAR TAX SITUATION. 
 Stock Purchases 
 Stock purchases made with employee deductions will be made out of salary net of tax and employee’s NIC (“net salary”). Stock Bonus Awards
and Special Stock Bonus Awards will be treated as a Participant’s taxable income equal in amount to the open market value of the stock on the date the shares are credited to the Participant’s account. For this purpose the open market value
of the stock will be converted into sterling using the then existing exchange rate as reasonably determined by the Company. 
 Bonus Awards

 Stock Bonus Awards and Special Stock Bonus Awards are subject to deduction of tax at source under the PAYE system and are subject to
NIC. Unless the Company in its sole discretion accepts another arrangement for the payment of such tax and NIC, the tax and NIC will be deducted from the employee’s monthly net paycheck due within 30 days following the award. If payroll
deduction is insufficient to finance the payment of tax and NIC, the Company reserves the right to cause the sale of sufficient shares of the stock credited to the Participant’s account to fund the payment of the tax and NIC. 
  

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 Loans 
 UK tax law provides that where the interest rate payable by an employee on a loan from his or her employer or an associated company is less than the “Official Rate”, the loan is a “beneficial loan” and in such a case the
employee is taxable on the difference between the interest at the Official Rate and the actual rate of interest. 
 The amount subject to tax is called the
cash equivalent of the benefit of the loan. Official Rates are prescribed by the Treasury from time to time. 
 No tax is due if the total on all loans from
the employer or an associated company does not exceed £5,000 at any time during the tax year. For this purpose, all loans (for example, advances of salary for season ticket purchase or gym membership) must be taken into account. Thus if an
employee has a season ticket loan whose maximum in the tax year is £2,500 and takes out in the same year a loan to purchase stock whose sterling value is £3,000, tax will be due on the cash equivalent of both loans. There is no exemption
for the first £5,000 of the loans outstanding in the tax year. 
 If the Common Stock purchased with a loan under the Plan is sold, pledged or
withdrawn (see “Other Terms” above) or for any other reason the terms of a loan are adjusted and as a result the interest rate on the participant’s loan is increased, so that the rate equals or exceeds the Official Rate, the loan will
cease to be a beneficial loan and no further taxable income will arise in respect of that loan. 
 There are two alternative ways of calculating the taxable
benefit from one or more beneficial loans. One is known as the “normal averaging method” and applies automatically unless 
  

	•	 	 the employee elects for the other (known as the “alternative precise method”) or 

  

	•	 	 the Inland Revenue gives notice that it intends to use the “alternative precise method”. 

 The choice of method is available for each loan separately. 
 The normal
averaging method of calculation is based on 
  

	•	 	 the average amount of the loan calculated by reference to the maximum opening and closing balances at the beginning and end of the tax year. If the loan was not in
existence throughout the whole year, the average is based on the maximum balances on the dates the loan was made or discharged; and 

  

	•	 	 the average appropriate “Official Rate” of interest for the tax year – or for such shorter period as the loan was in existence.

  

 15 

 The alternative method of calculation involves 
  

	•	 	 dividing the appropriate “Official Rate” by 365 and 

  

	•	 	 applying that to the total of the maximum amounts of the loan outstanding on each day of the tax year. 

 In effect the total amounts of the maximum balances on the loan for each day are converted into the equivalent balance for one day to which one day’s interest
charge is applied at the appropriate Official Rate. Any interest paid on the loan for the tax year is then deducted to arrive at the chargeable benefit for that year. 
 In calculating the chargeable benefit from a beneficial loan, interest paid is deductible only if it has actually been paid and if it has been paid for the relevant tax year. It does not have to be paid in the tax
year to qualify. 
 At the end of each tax year the employer is required to give particulars of the benefits provided for each employee on form P11D. This
includes beneficial loans. The employee is required to include any benefits provided for him or her in the annual Tax Return. 
 No employee’s NIC is
due on the provision of a beneficial loan. 
 MISCELLANEOUS 
 The Board of Directors may terminate or amend the Plan (including the Loan Program) at any time or from time to time in such respects as it deems
advisable. 
 INFORMATION ABOUT THE COMPANY 
 The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement under the 1933 Act with respect to the securities described in this document. 
 The Company files reports, proxy statements and other information with the Commission. You may read and copy any reports, statements and other
information filed by the Company at the public reference facilities maintained by the Commission at 100 F Street, N.E., Washington, D.C. The Commission’s website is www.sec.gov. 
  

 16 

 The documents listed below have been filed with the Commission and are incorporated by reference into
this document 
  

	 	(a)	The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. 

  

	 	(b)	The Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007. 

  

	 	(c)	Reports on Form 8-K filed on February 28, 2007. 

  

	 	(d)	The description of the Common Stock contained in the Company’s Registration Statement on Form 8-A filed on April 17, 2000 under Section 12(b) of the Securities
Exchange Act of 1934, including any amendments to such Registration Statement hereafter filed. 

 All documents subsequently filed by the
Company under Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act, prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all such securities then remaining unsold,
will be deemed to be incorporated by reference into this document and to be a part hereof from the date of filing of such documents. 
 The Company will
provide, without charge, to each person to whom this document is delivered, upon oral or written request of such person, a copy of any and all information that has been incorporated by reference in this document and a copy of the most recent annual
report to shareholders. Such requests should be directed to Pam Perrott, Senior Vice President of Human Resources, Markel Corporation, 4521 Highwoods Parkway, Glen Allen, Virginia 23060 (telephone: (804) 965-1730). 
 The Plan described in this document will be administered and interpreted by the Company’s Human Resources Department whose decisions will be final and binding.

  

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