8. TERMINATION PAY IN CONSIDERATION OF RESTRICTIVE COVENANTS. Employee and Navigators acknowledge
that, in consideration of the Employee's agreement to the restrictive covenants set forth in Sections 10 and 11,
Navigators has agreed that, if it elects by written notice to Employee to invoke and require Employee to comply
with the restrictions set forth in Sections 10 and 11 of this Employment Agreement, it will, notwithstanding the
provisions of Section 7 of this Employment Agreement, continue to pay to the Employee on Navigators' regular
payroll dates during the twelve (12) month period (the "Severance Period") following the effective date of such
termination of employment, base salary at the rate last in effect for the Employee (the "Termination Pay").
Notwithstanding the foregoing, in the event that Employee breaches any of the covenants set forth in Sections 9,
10, and 11, all payments of Termination Pay shall thereupon cease and no further payments to Employee shall be
made by Navigators. Navigators shall provide to Employee, within five (5) business days of the effective date of
the termination of the employment of Employee, written notice as to whether it elects to invoke and require
Employee to comply with the restrictions set forth in Sections 10 and 11 of this Employment Agreement. If
Navigators so elects, as set forth above, it shall pay to Employee the Termination Pay. Regardless of
Navigators' election with respect to Termination Pay, Employee shall in all events be required to comply with the
restrictions set forth in Section 9, entitled "Confidentiality."
9. CONFIDENTIALITY. For purposes of this Section 9, and Sections 8, 10 and 11 of this Employment
Agreement, the term "Navigators" shall include The Navigators Group, Inc., Navigators Insurance Company, and all
related or affiliated entities. Employee covenants and agrees that, from and after the date hereof, Employee
shall not, directly or indirectly disclose any Confidential Information, as hereinafter defined, to any party
whatsoever, except to the extent required in the performance of his duties for Navigators, or use any
Confidential Information for the benefit of himself or any other person, firm, corporation or other entity. The
term "Confidential Information" shall mean any information related to Navigators' business including, without
limitation, policy forms, agency and subproducer relationships, product and financial plans, information on
pricing and customers, fees and services provided therefor, technical information and data, financial reserves,
other financial information, business or product plans or costs, existing or prospective customers or customer
lists, pricing data or other terms of sales, customer requirements, buying history or underwriting or risk
assessment information, the identity of agents or customers or prospective agents or customers, products,
coverages, the terms of any reinsurance, fronting or other agreements of Navigators, and all information to which
Employee has access during his employment with Navigators which belongs or relates to a third party and which
would constitute Confidential Information if it belonged to or related to Navigators. Confidential Information
shall also include knowledge gained by Employee through his employment by Navigators. Employee shall not be
required to maintain the confidentiality of any information which is or becomes part of the public domain through
no act or omission attributable to Employee.
All Confidential Information and all other data, whether written or electronically stored, computer
printouts and other records and written material prepared or compiled by Employee or furnished to Employee while
in the employ of Navigators and which relates to the business of Navigators, is the property of Navigators. Upon
the termination of Employee's employment with Navigators, Employee shall return to Navigators, all documents,
files, diskettes and other information storage media containing all such Confidential Information and other data,
and shall not retain copies thereof.
10. Non-Solicitation of Navigators' Employees. Employee covenants and agrees that, while employed by
Navigators and for a period of one year thereafter, Employee will not, directly or indirectly, solicit, or assist
any other party in soliciting, or seek to influence any employee of Navigators to terminate employment with
Navigators or to become employed by any other party.
11. Non-Competition and Non-Solicitation of Customers, Agents and Others. Employee covenants and
agrees that, for a period of one year following the termination of his employment with Navigators (the
"Restricted Period"), Employee shall not:
(a) directly or indirectly become employed by, own an interest in, manage, operate,
control, provide services to, or become associated with as an officer, director, partner, agent,
consultant, stockholder, or otherwise any individual, firm, partnership, corporation, proprietorship or
other business entity which competes with the business of Navigators, as conducted by, or contemplated
by, Navigators at the time of the termination of Employee's employment with Navigators.
(b) solicit or call upon any person, entity or business which was an existing or
prospective customer, agent, insured, client, broker or agent of Navigators at any time during the
period commencing thirty-six (36) months prior to the termination of Employee's employment with
Navigators for the purpose of selling to or through such parties any insurance coverage which has been
offered for sale by Navigators during Employee's employment with Navigators. The restrictions herein
shall extend to any persons, corporations, partnerships, firms, businesses or entities for whom or
through whom Navigators engages in the business of providing insurance or conducting related business or
for whom or through whom Navigators actively sought or seeks to engage in such business during the
period commencing thirty-six (36) months prior to the termination of Employee's employment with
Navigators through the end of the Restricted Period and shall include agents and subagents of Navigators
notwithstanding that such persons or entities may have been induced to enter into a business
relationship with Navigators by the efforts of Employee or someone on his behalf.
The restrictions in this Section 11 shall be limited to any county of any state or any
comparable jurisdiction of any foreign country in which Navigators, directly or through subsidiaries or
affiliates, during the period of Employee's employment with Navigators or during the Restricted Period,
has been or is engaged in the business of providing insurance or conducting related business.
Notwithstanding the foregoing, the restrictions set forth in this Section 11 shall not apply to any
jurisdiction whose laws prohibit enforcement of such restrictions.
12. JUDICIAL MODIFICATION. The parties hereby agree that if the scope or enforceability of the
covenants in paragraphs 10 and 11 hereof are in any way disputed at any time, a court or other trier of fact may
modify and enforce said covenants to the extent that it believes them to be reasonable under circumstances
existing at that time.
13. INJUNCTIVE RELIEF. Employee acknowledges that compliance with the restrictive covenants herein
is necessary to protect the business and good will of Navigators, and that a breach of these restrictions will
cause irreparable damage to Navigators for which monetary damages may not be adequate. Consequently, Employee
agrees that in the event that he breaches or threatens to breach any of the restrictive covenants contained
herein, Navigators may be entitled, upon compliance with applicable requirements of law, to both (i) a temporary,
preliminary and/or permanent injunction in order to prevent the continuation of such harm, and (ii) money damages
insofar as they can be determined. Notwithstanding any of the foregoing, and subject to the requirements of law,
nothing in this Agreement shall be construed to prohibit Navigators from also pursuing any other remedy, the
parties having agreed that all remedies are to be cumulative to the extent permitted by law.
14. LITIGATION EXPENSE. In the event that Employee brings an action in any court of competent
jurisdiction seeking a determination that Navigators' discharge of the Employee For Cause was not authorized by,
and in compliance with, the terms of this Employment Agreement, Employee, if he is the prevailing party in any
such court proceeding, shall be reimbursed by Navigators for Employee's legal fees and expenses incurred in
connection with such litigation. Similarly, in the event that Employee brings an action in any court of
competent jurisdiction seeking a determination that Navigators' discontinuance of the payment of Termination Pay
to the Employee was not authorized by, and in compliance with, the terms of this Employment Agreement, Employee,
if he is the prevailing party in any such court proceeding, shall be reimbursed by Navigators for Employee's
legal fees and expenses incurred in connection with such litigation. Any recovery of legal fees and expenses
hereunder shall be in addition to any other recovery or remedy directed by the court.
15. NOTICES. Any and all notices required or permitted to be given under this Agreement will be
sufficient if furnished in writing, sent by personal delivery, telex, telecopier or certified mail, return
receipt requested, to each of the applicable addresses set forth below (or such other address as may from time to
time be designated by notice by any party hereto for such purpose):
To Employee: Stanley A. Galanski
With a copy to: Metz Schermer & Lewis, L.L.C.
11 Stanwix Street, 18th Floor
Pittsburgh, PA 15222
Attn: Leland P. Schermer
To Navigators: Terence N. Deeks
The Navigators Group, Inc.
One Penn Plaza
New York, NY 10119
With a copy to: Rosenman & Colin LLP
575 Madison Avenue
New York, NY 10022
Attn: Marc M. Tract
Notice shall be deemed given, if by personal delivery, on the date of such delivery or, if by telex or telecopy,
on the business day following receipt of answer back or telecopy confirmation or, if by certified mail, on the
date shown on the applicable return receipt.
(a) Except for other documents referenced in this Agreement, this written Agreement
contains the sole and entire Agreement between the parties, and supersedes any and all other agreements
(b) The waiver by either party of a breach of any provision of this Agreement shall not
operate as, or be construed a waiver of any subsequent breach thereof. No waiver or modification of
this Agreement or of any covenant, condition or limitation herein contained shall be valid unless in
writing and duly executed by the party to be charged therewith.
(c) In case any one or more of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision thereof and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been contained herein.
(d) In any action, special proceedings or other proceedings that may be brought arising
out of, in connection with, or by reason of this Agreement, the laws of the State of New York shall be
applicable and shall govern to the exclusion of the law of any other forum, without regard to the
jurisdiction in which the action or special proceeding may be instituted.
(e) The section headings contained herein are inserted for ease of reference only and
shall not control or affect the meaning or construction of the provisions hereof.
(f) This Agreement shall be binding on and inure to the benefit of the respective parties
and their respective heirs, legal representatives, successors and assigns.
IN WITNESS WHEREOF, Navigators has hereunto caused this Agreement to be executed by its duly authorized
officer and the Employee has hereunto set his hand, all being done in duplicate originals with one being
delivered to each party on the day of ________, 2001.
Executed at New York, New York on the date set forth above.
THE NAVIGATORS GROUP, INC. EMPLOYEE:
Its: STANLEY A. GALANSKI