Exhibit 10.1

FREMONT MICHIGAN INSURACORP, INC.

AGENT STOCK PURCHASE PLAN

(Effective: December 1, 2008)

 

  I. PURPOSE; GENERAL

1.1 Purpose. The Fremont Michigan InsuraCorp, Inc. Agent Stock Purchase Plan
(the “Plan”) has been established by Fremont Michigan InsuraCorp, Inc., a
Michigan corporation (the “Company”), to provide incentive to independent
insurance agencies that sell products and services of its subsidiary, Fremont
Insurance Company, a Michigan insurance corporation (the “Insurance Company”),
by enabling them to participate in the Company’s long-term growth and success
and to help align their success with the interests of the Company’s
stockholders.

1.2 General. The Plan allows each Eligible Agency (defined below) and those
Eligible Persons (defined below) designated by an Eligible Agency to purchase
shares of the Common Stock (defined below) of the Company. An Eligible Agency
may elect to apply all or a portion of its Earned Base Commissions and
Profit-Sharing Commissions to purchase Common Stock under the Plan. Eligible
Agencies and Eligible Persons may elect to make cash contributions to purchase
Common Stock under the Plan. The Company offers shares of its Class A Common
Stock under the Plan at a 10% discount from Fair Market Value on the Purchase
Date. Participants pay no brokerage commissions or other charges on such
purchases under the Plan.

1.3 Private Placement of Unregistered Common Stock. The Common Stock offered by
the Company under this Plan has not been registered with, or approved, by the
United States Securities and Exchange Commission (“SEC”). The offering of the
Common Stock under the Plan is based on an exemption from such registration as
set forth in §4(2) of the Securities Act of 1933, as amended (“Act”), and Rule
506 of Regulation D issued under the Act. The offering is being made only to
eligible agencies of the Insurance Company and eligible persons designated by
those agencies who are “accredited investors” as defined under Regulation D
issued under the Act and to not more than 35 eligible persons in any 12 month
period who may not be accredited investors, but are “sophisticated” investors.
Resales of the unregistered Class A Common Stock will require registration or
the availability of an exemption to registration such as SEC Rule 144.

 

  II. DEFINITIONS

2.1 “Accredited Investor” means any natural person who has, or the Company
reasonably believes to have, either (a) an individual net worth, or joint net
worth with that person’s spouse, at the time of the purchase that exceeds
$1,000,000, or (b) an individual income in excess of $200,000 in each of the two
most recent years or joint income with that person’s spouse of $300,000 in each
of those years and has a reasonable expectation of reaching the same income
level in the current year. An Accredited Investor also means an entity if all of
the equity owners of the entity are accredited investors.

2.2 “Act” means the Securities Act of 1933, as amended.

2.3 “Committee” means the Compensation Committee of the Company’s Board of
Directors.

2.4 “Common Stock” means the Company’s Class A Common Stock without par value
that is available for purchase under this Plan.

2.5 “Company” means Fremont Michigan InsuraCorp, Inc., a Michigan corporation.

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2.6 “Contribution Amount” means the dollar amount to be invested by a
Participant on the next Purchase Date including the amount to be paid in cash by
check plus, in the case of an Eligible Agency, the amount or percentage to be
deducted from the payment of Earned Base Commissions or Profit-Sharing
Commissions, to purchase shares of Common Stock for a Participant for whom an
Enrollment/Subscription Agreement is submitted.

2.7 “Contribution Date” means the last business day of the Enrollment Period
immediately prior to each Purchase Date and is the date by which the Company
must have the Participant’s fully completed and executed Enrollment/Subscription
Agreement together with a check for any purchases elected by the cash payment
method.

2.8 “Disclosure Documents” means the (a) Plan; (b) Enrollment/Subscription
Agreements; (c) Company’s Private Placement Memorandum dated December 1, 2008
for the Plan and any Private Placement Memorandum Supplements; (d) Company’s
most recent Annual Report on Form 10-K; and (e) Company’s most recent Quarterly
Report on Form 10-Q.

2.9 “Earned Base Commissions or Profit-Sharing Commissions” means those
commissions that are fully earned and are due and payable to a participating
Eligible Agency as determined by and solely from the records of the Insurance
Company.

2.10 “Eligible Agency” shall have the meaning given in Section 3.1 below.

2.11 “Eligible Person” means a Principal, Key Employee or a Benefit Plan as
defined in Section 3.2 below and designated by an Eligible Agency.

2.12 “Enrollment/Subscription Agreement” means the form attached hereto as
Exhibit “A” as may be amended by the Company from time to time. Such form is the
sole means for subscribing and making purchases of Common Stock under the Plan.

2.13 “Enrollment Period” shall mean the enrollment period between January 15,
2009 and February 27, 2009 for the first Purchase Date of March 5, 2009. For all
subsequent Purchase Dates, the enrollment period shall be the period of time
from the 15th day and until the last business day of February, May, August and
November during which times Participants may submit Enrollment/Subscription
Agreements to the Company.

2.14 “Fair Market Value” means, with respect to the Common Stock on a given
date: (a) if the Common Stock is listed for trading on a national securities
exchange (including, for this purpose, the National Market System (“NMS”) of the
National Association of Securities Dealers Automated Quotation System
(“NASDAQ”)) on that date, the closing share price on that exchange (or, if there
is more then one, the principal such exchange), or, for the NMS, the last sale
price, on the day immediately preceding the date as of which fair market value
is being determined, or on the next preceding day on which shares were traded if
no shares were traded on the immediately preceding day; (b) if the Common Stock
is not listed for trading on any securities exchange (including the NMS) on that
date but are reported by NASDAQ, and market information concerning the Common
Stock is published on a regular basis in The Wall Street Journal or The New York
Times, the average of the daily bid and low asked prices of the Common Stock, as
so published, on the day nearest preceding the date in question for which the
prices were published; (c) if (a) is inapplicable and market information
concerning the Common Stock is not regularly published as described in (b), the
average of the high bid and low asked prices of the Common Stock in the
over-the-counter market averaged over the last ten (10) trading days nearest
preceding the date in question as reported by NASDAQ (or, if NASDAQ does not
report prices for the Shares, another generally accepted reporting service); or
(d) if none of the above are applicable, the fair market value of a share as, of
the date in question, determined by the Committee.

 

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2.15 “Insurance Company” means Fremont Insurance Company, a Michigan insurance
company.

2.16 “Maximum Contribution Amounts” means the highest amount that each Eligible
Agency, including its designated Eligible Persons, may invest to purchase Common
Stock under the Plan in any given calendar quarter as set forth in the chart
below and is based upon the amount of Written Premiums by such Eligible Agency
during the most recent previous calendar year with the Insurance Company:

 

Written Premiums:

   Maximum Contribution Amounts:

Less than $1,000,000

   $ 30,000

$1,000,000 or more

   $ 50,000

2.17 “Minimum Purchase Amount” is Five Hundred Dollars ($500.00) and is the
smallest amount that may be designated or paid by a Participant for the purchase
of Common Stock in any quarter under the Plan.

2.18 “Participant” means an Eligible Person that has signed a fully completed
Enrollment/Subscription Agreement that has been accepted by the Company in
writing.

2.19 “Plan Agent” means the Registrar and Transfer Company, the Company’s stock
transfer agent and registrar.

2.20 “Purchase Date” means March 5, 2009 for the first purchase under this Plan
and for all subsequent purchases shall be the 5th day of March, June, September
and December of each year or the next succeeding business day.

2.21 “Sophisticated Investor” means a person who has, or whom the issuer
reasonably believes has, individually, or with the help of a purchaser
representative, knowledge and experience in financial and business matters such
that he is capable of evaluating the merits and risks of this investment.

2.22 “Written Premiums” means the written premiums, less cancellations and
returns, recorded by the Insurance Company for an Eligible Agency.

2.23 “SEC” means the United States Securities and Exchange Commission.

 

  III. PARTICIPATION

3.1 Eligible Agency. Any independent insurance agency under contract with and
selling products of the Insurance Company may participate as an Eligible Agency
if the agency (a) is an appointed agent of and in good standing with the
Insurance Company and (b) has been designated by the Company as an Eligible
Agency. The Company may, in its sole discretion, designate eligibility based
upon any one or more other factors, which it deems appropriate.

3.2 Eligible Persons. In addition, each Eligible Agency may designate one or
more of the following persons as eligible to purchase shares under the Plan:
(a) principals, members, general partners, officers and stockholders of the
Eligible Agency (“Principals”); (b) key employees of an Eligible Agency (“Key
Employees”); and (c) individual retirement plans of Principals and Key Employees
and Keogh plans of Principals and Key Employees (“Benefit Plans”).

 

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No later than January 10th, or the next business day following such day, of each
year, each Eligible Agency shall provide the Company a list of all Eligible
Persons designated by such Eligible Agency as of such date for the next
succeeding year. The Eligible Agency shall notify the Company of any deletions
from such list no later than the next Contribution Date. Eligible Agencies may
not add any Principals, Key Employees, or Benefit Plans to the list of Eligible
Persons designated by such Eligible Agency until January 10th of the next
succeeding year.

The Company or its designee shall, in its sole discretion, determine whether any
Eligible Agency, or Eligible Person is eligible to be a Participant in the Plan.
Each Eligible Person or Participant must also establish to the satisfaction of
the Company that it is an “accredited Investor.” Provided, however, the Company
may waive this requirement for a limited number of Participants if the person is
a “sophisticated investor” and the Company is assured that such person’s
participation will not jeopardize the offering of the shares under the Plan as
an exemption to registration under the Act. Further, the Company reserves the
right, in its sole discretion, to revoke an agency’s status as an Eligible
Agency at any time and for any reason. In the event that the agency relationship
with the Insurance Company is terminated for any reason, the status of an
Eligible Agency and its designated Eligible Persons shall automatically
terminate without notice.

An Eligible Agency and Eligible Person are under no obligation to participate in
the Plan or to purchase shares of Common Stock under the Plan. The Plan is for
the benefit only of the Participants. No other persons shall be direct or
indirect beneficiaries or participants in the Plan. The Company shall not be
obligated with respect to the Plan under any other arrangements between an
Eligible Agency and any other person, including, but not limited to, the
Eligible Agency’s Principals, Key Employees and Benefit Plans.

3.3 Enrollment. The Company shall deliver the Disclosure Documents to each
Eligible Agency for distribution to each Eligible Person. The
Enrollment/Subscription Agreement will include representations of the
Participant’s investment intent and investor suitability. An Eligible Agency or
Eligible Person may enroll in the Plan only during an Enrollment Period by
delivering the completed and signed Enrollment/Subscription Agreement to the
Company. An Eligible Agency or Eligible Person shall become a Participant in the
Plan only after (a) the Eligible Agency or Eligible Person acknowledges receipt
of the Disclosure Documents; (b) delivery to the Company of a properly completed
Enrollment/Subscription Agreement signed by such Eligible Agency or Eligible
Person, and (c) the Company makes a determination that the Participant is
eligible to become a Participant in the Plan and accepts the enrollment in
writing. Since participation in the Plan is available to only a limited number
of “non-accredited investors,” the Company retains the right to deny
participation to any person in the Company’s sole discretion.

By returning a properly completed and signed Enrollment/Subscription Agreement
to the Company, the Eligible Agency and participating Eligible Person each
acknowledge the receipt of the Disclosure Documents. Completed and signed
Enrollment/Subscription Agreements and Contribution Amounts must be delivered to
the Company’s office at: 933 East Main Street, Fremont, Michigan 49412,
Attention: Kevin G. Kaastra.

Properly completed forms and necessary payments must be received by the Company
on or before the Contribution Date prior to the applicable Purchase Date. If
necessary payments are not received by the applicable Contribution Date, the
Company may reject the purchase or reduce the purchase amount. If rejected, any
payments received after the Contribution Date will be returned without interest
as soon as reasonably practical.

 

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3.4 Purchasing Shares of Common Stock. Shares may generally be purchased by
Participants under the Plan on the Purchase Dates, however, the Company does not
guarantee that such days will be Purchase Dates and may designate other dates as
Purchase Dates. The Company does not pay any interest on cash payments received
under the Plan. Each Participant shall designate the Contribution Amount,
however, the aggregate contributions by all Participants affiliated with any one
Eligible Agency shall not to exceed the Maximum Contribution Amount. The
Participant shall complete the appropriate sections of the
Enrollment/Subscription Agreement designating the amount, if any, of the
Contribution Amount that (a) is to be paid in cash by check; and (b) for an
Eligible Agency the amount or percentage, if any, that is to be deducted from
the payment of Earned Base Commissions or Profit-Sharing Commissions. The
Contribution Amount designations regarding the Earned Base Commissions or
Profit-Sharing Commissions shall remain in effect until revoked or modified in
writing by such Eligible Agency, which revocation or modification will take
effect for the next practicable Purchase Date. The Contribution Amount
designation regarding cash shall only remain in effect for the next Purchase
Date. Purchases shall be made under the Plan on the next applicable Purchase
Date.

3.5 Purchased Shares and Participants’ Accounts. The Company shall record the
ownership of the shares of Common Stock purchased through the Plan with the Plan
Agent in book-entry form or, at the election of the Company by issuance of a
stock certificate. If stock certificates are issued, they will contain
appropriate legends noting the one-year restrictive period and the fact that the
shares are not registered under the Act. The Company may also hold the
certificates until the restrictive period expires and at such time deliver the
certificates to the Participant or transfer the registration of the shares to
book entry in the name of the Participant. Only whole shares of Common Stock
will be sold to Participants under this Plan. The Participant shall receive a
written account statement following each purchase of shares. A Participant may
vote all shares of Common Stock held in his or her account. If the number of
shares subscribed for under the Plan at any time exceeds the number of remaining
shares available for sale under this Plan, the remaining shares shall be
allocated among Participants at the discretion of the Company.

The Company shall maintain an account record for each Participant. Any excess
contributions which were not used to purchase Common Stock on a given Purchase
Date shall be allocated to and maintained in a Participant’s account until the
next Purchase Date. A Participant shall elect in the subsequent
Enrollment/Subscription Agreement whether any such carried-forward amounts are
to be used to purchase shares of Common Stock or if such amounts are to be
returned to the Participant. If the Participant fails to make such an election,
the carried-forward excess contributions shall be used to purchase shares of
Common Stock for the Participant at the next Purchase Date, or at the election
of the Company, returned to the Participant as soon as is administratively
feasible.

3.6 Restrictions on Shares Purchased under the Plan. Shares of Common Stock
purchased under the Plan shall be restricted for a period of one year beginning
on the Purchase Date and expiring upon the first anniversary of the Purchase
Date (the “Restricted Period”). During the Restricted Period, the Participant
may not sell, transfer, pledge, assign, or dispose of his or her shares of
Common Stock in any manner. However, a Participant shall be able to vote his or
her shares of Common Stock during the Restricted Period and shall receive any
dividends declared by the Board of Directors of the Company. The Participant
shall own all of the shares in his or her account and none of the Participant’s
shares of Common Stock shall be subject to forfeiture.

Following the expiration of the Restricted Period, the Participant’s shares of
Common Stock may remain in his or her account until they are sold or transferred
by the Participant. The Common Stock

 

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purchased under this Plan is not registered with the SEC and resale of the
shares by the Participant may require registration unless an exemption from
registration is available. Based on the terms and conditions of SEC Rule 144,
the Company believes that Participants who are not deemed “affiliates” of the
Company are able to resell the Common Stock through a broker at the expiration
of the Restricted Period. Rule 144 defines an “affiliate” as a person that
directly or indirectly controls or is controlled by, or is under common control
with the Company. In the event of a sale, the Plan Agent shall transfer the
shares by book entry, or at the option of the Company a share certificates may
be issued to the Participant.

3.7 Withdrawal from the Plan. An enrolled Eligible Agency may withdraw from this
Plan at any time by written notice of withdrawal to the Company signed by an
authorized representative on behalf of the Eligible Agency. Withdrawal by an
Eligible Agency shall result in the termination of participation on behalf of
all Eligible Persons participating through the Eligible Agency. Withdrawal shall
be effective as soon as reasonably possible, but will not affect purchases
unless the notice is received by the Company at least 10 days prior to the
Purchase Date. Promptly after the time of withdrawal or the discontinuance of an
Eligible Agency’s eligibility, the amount of any cash credited to the Plan
Account of the Eligible Agency’s or its Eligible Persons for the Purchase Date
shall be refunded by the Company without interest. If an Eligible Agency
withdraws, such Eligible Agency may not reenroll for 12 months after withdrawal
(unless approved by the Company), and then only if it has been redesignated by
the Company as an Eligible Agency.

 

  IV. SHARES AVAILABLE UNDER THE PLAN

The maximum number of shares of Common Stock reserved for issuance under the
Plan shall be One Hundred Thousand (100,000) shares, subject to adjustment as
provided herein. The Company may make the shares available from authorized but
unissued shares of Common Stock, including shares purchased by the Company in
the open market.

In the event of any equity restructuring (within the meaning of Financial
Accounting Standards No. 123, as revised) that causes the per share value of the
Common Stock to change, such as a stock dividend, stock split, spin off, rights
offering, reverse stock split or recapitalization through a large, non-recurring
cash dividend, the Committee shall cause there to be made an equitable
adjustment to the number and kind of shares that may be available for purchase
under the Plan. In the event of any other change in capitalization of the
Company, such as a merger, consolidation, combination, exchange of shares, any
reorganization (whether or not such reorganization comes within the definition
of such term in Section 368 of the Internal Revenue Code) or any partial or
complete liquidation of the Company, the Committee may, in its sole discretion,
cause there to be made such equitable adjustment described in the foregoing
sentence. In either case, any such adjustment shall be conclusive and binding
for all purposes of the Plan.

 

  V. DIVIDENDS; DIVIDEND REINVESTMENT

The Company pays dividends only, as and when declared by the Board, to the
record holders of shares of Common Stock. As the record holder of shares of
Common Stock purchased under the Plan, a Participant shall receive dividends, if
any, in cash for all shares registered in the Participant’s name on the record
date. Such payment shall be made on the date that such dividend would be paid to
the Company’s stockholders generally. There is no assurance that cash dividends
will be paid.

Any dividend payable in Common Stock or any split shares distributed by the
Company on shares purchased under the Plan shall be deposited in the
Participant’s account with the Plan Agent. Any shares received as the result of
a stock split shall be subject to the same restrictions on transfer as the
underlying shares purchased under the Plan. Any shares received as a stock
dividend shall also be subject to the same restrictions on transfer as the
underlying shares purchased under the Plan.

 

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If the Company adopts a dividend reinvestment plan, Participants in the Plan
will be eligible to participate in the Company’s dividend reinvestment plan
pursuant to the terms and conditions of that plan, provided, however, the 10%
discount under this Plan will not apply to the dividend reinvestment plan. The
transfer restrictions applicable to shares purchased under the Plan shall not
apply to any shares purchased under a dividend reinvestment plan.

 

  VI. OTHER STOCKHOLDER RIGHTS; INFORMATION REPORTING; TAX MATTERS

If the Company has a rights offering, Participants in the Plan shall be entitled
to participate based upon their total share holdings. Rights on shares of Common
Stock purchased under the Plan and registered in the name of a Participant shall
be mailed directly to that Participant in the same manner as to stockholders not
participating in the Plan.

Each Participant in the Plan shall receive the Company’s annual and other
periodic or quarterly reports issued to stockholders, notices of stockholder
meetings, proxy statements and information for reporting dividends paid and
income resulting from the discount on the purchase of Common Stock under the
Plan. Each Participant shall be entitled to vote the shares purchased under the
Plan and registered in that Participant’s name on a record date for a meeting of
stockholders.

The following discussion summarizes certain United States federal income tax
consequences of the purchase of Common Stock under the Plan. The summary does
not purport to cover other federal tax consequences or state or local tax
consequences. Each Participant is urged to consult with their own tax advisor to
understand the tax consequences of their participation in the Plan. The Eligible
Agency shall receive Form 1099 reporting of all Earned Base Commissions or
Profit-Sharing Commissions in accordance with the prior practices of the
Insurance Company notwithstanding the fact that some of those amounts were
applied to the purchase of Common Stock under this Plan. Further, the 10%
discount on the purchases of Common Stock under this Plan is taxable to the
Participant at the time the stock is purchased and the Participant will be
treated as having received ordinary income in an amount equal to the difference
between the purchase price paid and the then Fair Market Value of the Common
Stock acquired. After each calendar year, the Company will send to each
Participant a Form 1099 reflecting the amount of ordinary income from the
discounts under the Plan for the prior year. The Company may be entitled to a
deduction at the same time in a corresponding amount. The Participant’s basis in
the Common Stock purchased under the Plan will be equal to the purchase price
plus the amount of ordinary income recognized due to the purchase discount.

 

  VII. ADMINISTRATION OF THE PLAN

The Plan shall be administered by the Committee or its designee. The Committee
shall have the authority, in its sole discretion, subject to and not
inconsistent with the express provisions of the Plan, to administer the Plan and
to exercise all the powers and authorities either specifically granted to it
under the Plan or necessary or advisable in the administration of the Plan,
including, without limitation, the authority to: (a) construe and interpret the
Plan; (b) make adjustments in response to changes in applicable laws,
regulations, or accounting principles, or for any other reason; (c) prescribe,
amend, waive and rescind rules and regulations relating to the Plan, and appoint
agents it deems appropriate for administration of the Plan; and (d) make any
other determinations deemed necessary or advisable for the administration of the
Plan.

 

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Determinations of the Committee shall be final, conclusive, and binding on all
persons, and the Committee will not be liable for any action or determination
made in good faith with respect to the Plan. The Committee may engage the Plan
Agent to perform custodial and record-keeping functions.

 

  VIII. PLAN DURATION; TERMINATION

8.1 Plan Duration Generally. The Plan shall begin effective December 1, 2008,
and continue in existence until the earliest date one of the following occurs:
(i) all shares of Common Stock that have been allocated to the Plan have been
purchased by the Plan’s Participants; (ii) December 31, 2013; or (iii) the Plan
is otherwise terminated by the Company.

8.2 Plan Suspension. The Board of Directors may suspend the Plan’s operation for
a period of time not to exceed twelve (12) months from the date operation is
suspended. Before twelve (12) months elapse, the Company must terminate the
Plan, resume operation of the Plan, or enact any amendments necessary to resume
operation.

8.3 Amendment or Termination of the Plan. The Board of Directors of the Company
shall have the right to amend, modify or terminate this Plan at any time without
notice provided that no pending purchases are adversely affected thereby. In the
event of termination within 10 business days prior to a Purchase Date, the
Company shall return such Contribution Amounts to the Participants.

 

  IX. OTHER PLAN PROVISIONS

9.1 Assignment and Issuance of Shares. No Eligible Agency, Eligible Person or
Participant may assign, transfer, pledge or hypothecate the shares held for them
under the Plan or their subscription rights under this Plan to any other person,
and any attempted assignment shall be void. All shares issued under this Plan
shall be titled in the name of the Eligible Agency or its designated Eligible
Persons; provided, however, that an Eligible Agency may, upon written request to
the Company, designate that such shares be issued to an Eligible Person of the
Eligible Agency.

9.2 Contractual Rights. Nothing contained in this Plan or any forms and notices
related to it shall: (i) be construed to confer upon an Eligible Agency or a
Participant any right to a continued contractual relationship with the Company
or the Insurance Company; or (ii) limit, in any respect, the right of the
Company or the Insurance Company to terminate an existing relationship,
contractual or otherwise, with an Eligible Agency or Participant under this
Plan.

9.3 Section 16 Officers, Directors and 5% Owners. An agency which would
otherwise be an Eligible Agency may not participate in this Plan if the agency
or any of its Principals, Key Employees or Benefit Plans, whether or not
enrolled in the Plan, are subject to Section 16 of the Securities and Exchange
Act of 1934 (the “34 Act”) in connection with the Company as an officer,
director or five-percent (5%) owner of the Company as defined under Section 13
of the 34 Act. If an Eligible Agency or any of its Principals, Key Employees or
Benefit Plans is a Participant in the Plan and becomes subject to Section 16 of
the 34 Act or a five-percent (5%) owner, then such Eligible Agency and all of
its Eligible Persons will be deemed to have immediately and completely withdrawn
from the Plan.

9.4 Titles. Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Plan.

9.5 Applicable Law. This Plan shall be construed, administered and governed in
all respects under the laws of the State of Michigan.

 

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