Exhibit
10-3


 


 


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 Navigators
Group, Inc. as Senior Vice President and Chief Claims Officer of The Navigators
Group, Inc., Navigators Insurance Company, NIC Insurance Company and Navigators
Management Company, Inc.  Details of our
offer 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., responsible
for:


 


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


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


3.     Navigators
Pro claims operations in New York and London


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


5.     Management
of asbestos and environmental claims


6.     Management
of claims operation at Lloyd’s Syndicate 1221


7.     Strategic
direction of claims as a service unit within group


 


Key Functional Responsibilities:


 


1.     Staffing,
staff quality and training


2.     Establish
and maintain consistent workflow, procedures and standards


3.     Maintaining
high-levels of technical claims expertise in all disciplines


 





















 


4.     Delegation
of claims handling authority


5.     Assure
effective and efficient claims processing and systems


6.     Adequate
and consistent case reserves


7.     Identification
and implementation of best practices


8.     Implementing
strategies to minimize LAE without negatively impacting claims outcomes


9.     Identifying
and developing the management information needs of claims


10.   Identifying
and 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 the
executive management team of a profitable and growing public corporation.  Our current executive management team
consists of four divisional underwriting executives, the Chief Financial
Officer, Chief Information Officer and me. 
You would become a member of this team, which I use as a source of
strategic guidance on a wide variety of issues impacting the company.


 





















 


This offer is conditional upon your successful completion of
pre-employment drug testing and background checks.  All specific benefit terms outlined in this
offer letter are subject to the specific plan descriptions provided in our
employee manual.


 


Jane, I am excited about the possibility of having you join
Navigators.  I believe you will quickly
become an impact player by enhancing the performance of a successful specialty
claims organization and through your contributions to the overall development
of Navigators.  I believe our team
oriented work environment will provide you with an exceptional opportunity for
professional growth and to contribute beyond your designated
responsibilities.  I hope you will find
our employment offer to be attractive, and that you will join Navigators as
soon as possible.  This employment offer
is valid through June 15, 2004.  I
look 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

  	
   

  
			



 





















 


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 of
employment as outlined in your June 1, 2004 letter.  I appreciate the opportunity to become a
contributing member of a team committed to building a strong profitable
underwriting organization.  The position
offers 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