**Exhibit10-3**

 

 

June 1, 2004

 

 

Ms. Jane Keller

720 Cedar Road

Southport, CT 06890

 

Dear Jane:

 

We are pleased to extend an offer of employment to join The NavigatorsGroup, Inc. as Senior Vice President and Chief Claims Officer of The NavigatorsGroup, Inc., Navigators Insurance Company, NIC Insurance Company and NavigatorsManagement Company, Inc.  Details of ouroffer are as follows:

 
| **Position**:            | Senior Vice President and Chief Claims  Officer |
|--------------------------|-------------------------------------------------|
|                     | The Navigators Group, Inc.                      |
|                     | Navigators Insurance Company                    |
|                     | NIC Insurance Company                           |
|                     | Navigators Management Company, Inc.             |
|                     |                                            |
| **Position Reports to**: | President and Chief Executive Officer           |
|                     | The Navigators Group, Inc.                      |

 

**Scope or Responsibility**:

 

Senior Claims Executive within The Navigators Group, Inc., responsiblefor:

 

1.     Marineand Energy claims operations in New York, London, Houston, Oakland and Seattle

2.     NavigatorsSpecialty claims operation in San Francisco and servicing of claims for Chicago

3.     NavigatorsPro claims operations in New York and London

4.     Managementof claims for runoff product lines including Aviation, Somerset Re and Property

5.     Managementof asbestos and environmental claims

6.     Managementof claims operation at Lloyd’s Syndicate 1221

7.     Strategicdirection of claims as a service unit within group

 

**Key Functional Responsibilities**:

 

1.     Staffing,staff quality and training

2.     Establishand maintain consistent workflow, procedures and standards

3.     Maintaininghigh-levels of technical claims expertise in all disciplines

 

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4.     Delegationof claims handling authority

5.     Assureeffective and efficient claims processing and systems

6.     Adequateand consistent case reserves

7.     Identificationand implementation of best practices

8.     Implementingstrategies to minimize LAE without negatively impacting claims outcomes

9.     Identifyingand developing the management information needs of claims

10.   Identifyingand implementing systems needs for claims

 
| **Additional Responsibilities:** | Member of the Executive Management Team of  Navigators                                                                                                                                                                                                                                                                                                            |
|----------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                             |                                                                                                                                                                                                                                                                                                                                                              |
| **Base Salary**:                 | $250,000                                                                                                                                                                                                                                                                                                                                                          |
|                             |                                                                                                                                                                                                                                                                                                                                                              |
| **Cash Bonus**:                  | Participation in the incentive compensation  program of The Navigators Group, Inc. beginning with the 2005 year. For 2004,  your guaranteed minimum bonus will be $120,000, payable 50% 60 days from hire  date and 50% in March 2005                                                                                                                        |
|                             |                                                                                                                                                                                                                                                                                                                                                              |
| **Stock Grant**:                 | You will be awarded a grant of 8,000 shares  of stock in The Navigators Group, Inc. vesting 25% annually over a four year  period. Based upon the current market price of Navigators Stock (ticker  symbol “NAVG” on NASDAQ) of $28.46, this award has a current value of $227,680.                                                                     |
|                             |                                                                                                                                                                                                                                                                                                                                                              |
| **Pension Plan**:                | Beginning in 2005, you will be eligible for  participation in our pension plan. (This assumes a start date of  June 30, 2004 or earlier). Navigators contributes an amount equal to 15%  of base salary to the pension plan annually. This contribution is made at the  conclusion of the calendar year, subject to the approval of the Board of  Directors. |
|                             |                                                                                                                                                                                                                                                                                                                                                              |
| **Medical/Dental/Life**:         | Navigators maintains high quality company  benefits, including medical, dental and life insurance; a 401-k plan; Employee  Stock Purchase Plan; Educational Assistance and an Employee Assistance Plan.                                                                                                                                                           |
|                             |                                                                                                                                                                                                                                                                                                                                                              |
| **Vacation**:                    | 4 weeks paid vacation annually.                                                                                                                                                                                                                                                                                                                                   |
|                             |                                                                                                                                                                                                                                                                                                                                                              |
| **Location**:                    | This position is based in our Corporate  Services Offices in Rye Brook, New York. It is expected that your responsibilities  will require regular travel to our offices in New York and San Francisco, and  periodic travel to other offices.                                                                                                                     |

 

Jane, this is a truly exceptional opportunity for you to join theexecutive management team of a profitable and growing public corporation.  Our current executive management teamconsists of four divisional underwriting executives, the Chief FinancialOfficer, Chief Information Officer and me. You would become a member of this team, which I use as a source ofstrategic guidance on a wide variety of issues impacting the company.

 

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This offer is conditional upon your successful completion ofpre-employment drug testing and background checks.  All specific benefit terms outlined in thisoffer letter are subject to the specific plan descriptions provided in ouremployee manual.

 

Jane, I am excited about the possibility of having you joinNavigators.  I believe you will quicklybecome an impact player by enhancing the performance of a successful specialtyclaims organization and through your contributions to the overall developmentof Navigators.  I believe our teamoriented work environment will provide you with an exceptional opportunity forprofessional growth and to contribute beyond your designatedresponsibilities.  I hope you will findour employment offer to be attractive, and that you will join Navigators assoon as possible.  This employment offeris valid through June 15, 2004.  Ilook forward to your response.

 
|   | Sincerely,                          |
|--------|-------------------------------------|
|   |                                |
|   |                                |
|   | Stanley A. Galanski                 |
|   | President                           |
|   | The Navigators Group, Inc.          |
|   | Navigators Insurance Company        |
|   | NIC Insurance Company               |
|   | Navigators Management Company, Inc. |
|   |                                |
| cc:    | Marilynn Gallo                      |   |
|        |                                     |  |

 

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June 4, 2004

 

Stanley A. Galanski

President & Chief Executive Officer

The Navigators Group, Inc.

Reckson Executive Park

6 International Drive, Suite 100

Rye Brook, N.Y. 10573

 

Dear Stan,

 

I am delighted to accept the offer ofemployment as outlined in your June 1, 2004 letter.  I appreciate the opportunity to become acontributing member of a team committed to building a strong profitableunderwriting organization.  The positionoffers exciting new challenges, which I welcome.  I look forward to joining Navigators on June 29th.

 
|   | Sincerely,         |
|--------|--------------------|
|   |               |
|   | /s/ Jane E. Keller |   |
|   | Jane E. Keller     |

 

cc:   Marilynn Gallo

 

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