July 10, 2008
Francis McDonnell
Dear Frank:
We are pleased to extend an offer of employment to join The Navigators Group,
Inc. as Senior Vice President, The Navigators Group, Inc. Details of the offer
are as follows:
Position: Senior Vice President and Chief Financial Officer
- -------- The Navigators Group, Inc.
Navigators Management Company, Inc.
Senior Vice President, Chief Financial Officer and
Director
Navigators Insurance Company
NIC Insurance Company
Positions Reports to: President and Chief Executive Officer
- -------------------- The Navigators Group, Inc.
Base Salary: $425,000 per annum, payable semi-monthly.
- -----------
Bonus: You will participate in the annual incentive compensation
- ----- program of The Navigators Group, Inc. beginning with the
2008 year. Your guaranteed bonus for the 2008 calendar
year is $425,000, $275,000 of which will be paid in cash
and $150,000 on a deferred basis in the form of
Navigators stock with the bonus payment schedule for all
other Navigators employees. Starting in 2009, you will be
eligible for a bonus of 85% of your base salary, with a
potential to earn up to 127.5%. Your actual bonus is
based on a combination of corporate (50%) and individual
(50%) achievement. Sixty percent of your bonus will be
paid in cash and forty percent of your bonus will be paid
on a deferred basis in the form of Navigators stock. The
stock grant portion under the annual incentive
compensation program vests 25% annually over four years
from the anniversary of the grant date.
Long Term Incentives: You will be awarded a stock grant consisting of 22,000
- -------------------- shares of restricted common stock in The Navigators
Group,
Inc. This stock will vest annually over a four year
period, with the first 25% vesting twelve months from
the commencement of your employment. Navigators' stock
has enjoyed substantial growth over the past five years
and is intended as a long term incentive for profitable
underwriting results. You will be eligible for a stock
grant for 2009 (granted in 2010) and additional future
stock grants awards in accordance with Navigators
compensation practices.
Relocation Assistance: We will reimburse actual expenses incurred for
- --------------------- the relocation of your primary residence to the Rye Brook
area, up to $100,000. Eligible expenses are as follows:
Brokerage commission, mortgage application fee and
origination costs, associated closing costs and household
moving expenses.
Benefits: You will be eligible to participate in all benefit plans
and programs of the Company including medical, dental,
life insurance, 401(k), Money Purchase Plan, a discounted
Employee Stock Purchase plan in accordance with the terms
and conditions of the plan documents. Nothing in this
letter should be construed as a guarantee of any
particular level of benefits or of your participation in
any of the benefit plans.
Vacation: You are eligible for 4 weeks paid vacation. An additional
- --------- day is added for each year completed with Navigators, to
a maximum of 22 vacation days per year.
Location: You will be based in the Rye Brook, New York corporate
- -------- headquarters. We expect that your responsibilities will
require business travel.
This offer is conditional upon your successful completion of pre-employment drug
screen, and background check including verification of compensation and equity
grants.
Frank, we believe this is truly an exceptional opportunity for you to join the
senior management team of a profitable and growing public corporation. Our
culture emphasizes integrity, professionalism and pride. We are a pay for
performance organization, and intend to reward performers commensurate with
their contribution to corporate results and the growth of shareholder value.
I hope you will find our employment offer to be attractive, and that you will
join Navigators as soon as possible. I look forward to your response.
Sincerely,
Stanley Adam Galanski
President and CEO
The Navigators Group, Inc.
Navigators Management Company
Navigators Insurance Company
ACCEPTED:_______________________________ Date:__________________
Frank McDonnell
To: Frank McDonnell
From : Stan Galanski
Re: Navigators Offer Letter
Date: July 11, 2008
Frank,
This letter is intended to supplement the offer to you from The Navigators
Group, Inc. (the "Company"), set forth in the Company's offer letter to you, to
become the Chief Financial Officer of the Company, and to confirm our agreement
as follows:
1. In the event that within one year following a change of control of the
Company (as defined in the Company's 2005 Stock Plan), you are
terminated other than for cause or suffer a substantial diminution of
your responsibilities, then all of the outstanding shares of common
stock of the Company issued to you in your initial stock grant and in
March 2009 in connection with your annual bonus shall immediately
become fully vested.
2. If at any time during your employment with the Company you are
terminated other than for cause, then, in addition to any accelerated
vesting of stock to which you may be entitled pursuant to paragraph 1
above, you will be entitled to receive a severance payment equal to
one year's base salary plus the cash portion of your pro rata earned
bonus for the year in which such termination occurs.
3. With respect to the Company's agreement in the offer letter to pay up
to $100,000 of your relocation expenses, the Company agrees that up to
50% of this amount may be applied by you toward the purchase of a home
within commuting distance of the Company's Rye Brook executive office.
Please confirm your agreement with the foregoing by executing this letter in the
space provided below and returning the fully executed letter to me. We very much
look forward to your joining the Company.
Sincerely,
THE NAVIGATORS GROUP, INC.
By: ____________________
Stanley A. Galanski
Agreed to and accepted as of the date first written above:
________________________
Frank McDonnell