Exhibit 10.1
CONSULTING AGREEMENT
     This Consulting Agreement (hereinafter referred to as the “Agreement”) is
effective October, 1, 2008, by and among Meadowbrook Insurance Group, Inc.
(“Meadowbrook”), Meadowbrook, Inc., (hereinafter referred to as the “Company”),
and Merton J. Segal (hereinafter referred to as the “Consultant”).
RECITALS:
     WHEREAS, the Company and the Consultant desire to set forth their
respective rights and obligations in connection with the certain consulting
services of the Consultant;
     NOW THEREFORE, in consideration of the premises and of the mutual
covenants, agreements and understandings contained herein, the parties hereto
agree as follows:
AGREEMENT:
     1. Retention. The Company agrees to retain the Consultant during the Term
(as such term is hereinafter defined in Section 5 below) and the Consultant
hereby accepts such engagement by the Company, subject to the terms and
conditions hereinafter set forth herein. This Agreement establishes the terms of
Consultant’s retention and any payment(s) to which the Consultant is entitled
during the Term. The Company and the Consultant retain the right to terminate
this Agreement for the reasons described in Section 5 below.
     2. Responsibilities and Duties. The Consultant shall be retained as a
consultant with such responsibilities and duties as prescribed by the President
& Chief Executive Officer of the Company. These duties may include services,
which are intended to assist the Company with the development, creation and
maintenance of the following; (1) agent relationships between the Company and
its agency-force relating to the Company’s insurance programs; (2) client
relationships of the Company’s agency division relating to life, annuities,
health, property, automobile and general liability insurance; (3) fee for
service relationships of the Company relating to the providing of marketing,
underwriting, loss control and claims services; and (4) new programs, products,
agent relationships and clients for the Company’s agency division(s). In
addition, the Consultant will assist the Company with the supervision of the
Company’s investment advisor and compliance with the Company’s Investment Policy
Guidelines. The Consultant may attend designated seminars relating to investment
strategies for insurance companies. The Consultant may assist the Company with
development and maintenance of the Company’s brand and market identity, as well
as represent it at designated insurance industry conference(s).
     3. Compensation. In consideration of the performance of such services by
the Consultant, the Company will pay the Consultant the following:

  (A)   Consulting Fee. The Consulting Fee (the ”Fee”) shall be as follows:
(1) For the period October 1, 2008 – September 30, 2009, Consultant shall be

 

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      receive a Fee of $266,000; (2) For the period of October 1, 2009 –
September 30, 2010, Consultant shall receive a Fee of $216,000; and (3) For the
period of October 1, 2010 – September 30, 2011, Consultant shall receive a Fee
of $166,000. The Fee shall be paid in monthly installments and in advance.

     4. Other Benefits. The Consultant shall not be entitled to any other
benefits of the Company during the Term. Consultant shall provide his own
health, dental, life, disability, workers compensation and other similar type
benefits.
     5. Consulting Term. The period of the Consultant’s retention by the Company
under this Agreement (the “Term”) shall commence on October 1, 2008 and
terminate on September 30, 2011, or such earlier date upon the occurrence of any
of the following events:

  (A)   the death or retirement of the Consultant;     (B)   the Consultant’s
Disability. For purposes of this Agreement, “Disability” shall mean a physical
or mental condition of the Consultant that prevents him from performing the
consulting services described above as determined by the President & CEO and the
Board of Directors of the Company.     (C)   a mutual written agreement between
the Company and the Consultant agreeing to an early termination date; or     (D)
  termination of this Agreement by the President & CEO and Board of Directors of
the Company for “Cause,” which shall mean: (1) fraud, malfeasance or willful
misconduct on the part of the Consultant; (2) violation of Section 7 of this
Agreement; (3) conduct by the Consultant that would be materially injurious to
the Company; or (4) revocation, suspension, or termination of the Consultant’s
insurance license.

In the event this Agreement terminates for any of the reasons set forth in
Section 5(A) – (D), the Consultant shall only be paid the Fee through the date
of his death, retirement, Disability, the date this Agreement is terminated for
Cause or the date this Agreement is terminated by mutual written agreement of
parties.
     6. Confidential Information Agreement. Consultant agrees the Confidential
Information Agreement executed by him and dated March 12, 1975 and re-affirmed
in his former Employment Agreement, dated January 1, 2006 (the “Confidential
Information Agreement”), which includes, not by way of limitation, covenants not
to compete with the Company and covenants to refrain from soliciting employees
to leave the Company’s employment, shall remain in full force and effect.

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     7. Covenant not to Compete or Solicit Employees. During the Term of this
Agreement and for a period of two (2) years following its termination or
expiration, the Consultant agrees to the following:

  (A)   Consultant agrees that he shall not, without the Company’s prior written
consent, directly or indirectly Compete with the Company or any of its
subsidiaries. For the purposes of Section 7(A):

(1) “Compete” means directly or indirectly owning, controlling, operating
managing, working for or consulting with, an insurance agency, insurance company
or third-party administrator. , which solicits or obtains business of or from
the Company during the Term of this Agreement and for a period of two (2) years
following its expiration or termination;, or soliciting or inducing any
employee, or agent of the Company to terminate employment or appointment with
the Company or any of its subsidiaries and become employed or appointed by a
Competitor.
(2) In the event that a successor to the Company succeeds to or assumes the
Company’s rights and obligations under this Agreement, Section 7(A) will apply
only to the Company as it existed immediately before the succession or
assumption occurred.
(3) Section 7(A) will not prohibit Consultant from directly or indirectly owning
or acquiring any capital stock or similar securities that are listed on a
securities exchange or quoted on the Nasdaq or NYSE and do not represent more
than 5% of the outstanding capital stock of any Financial Services Company.

  (B)   Consultant agrees that a violation of this Section 7 may result in
direct, immediate and irreparable harm to the Company, and in such event, agrees
that the Company, in addition to their other rights and remedies, would be
entitled to injunctive relief enforcing the terms and provisions of this
Section 7. The Company shall be entitled to stop any payments that are or may
become due under this Agreement to the Consultant in the event he violates this
Section of the Agreement as determined by the President & CEO and Board of
Directors of the Company. The terms of this Section are intended to be in
addition to any restrictions contained in the Confidential Information
Agreement.

     8. Binding Effect; Assignment. The Company may assign this Agreement to any
of its affiliates or their successors or assigns. This Agreement shall be
binding upon and shall inure to the benefit of the Company, its affiliates and
their successors and assigns. This Agreement shall

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be binding upon and shall inure to the benefit of the Consultant. Neither this
Agreement nor any right or interest hereunder shall be assignable or
transferable by the Consultant.
     9. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by the Consultant and the Company. No agreement or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party, which are not expressly set forth in this
Agreement. Consultant shall have use of an office similar to his current office
and administrative assistance as needed during the Term.
     10. Other Agreements. Effective September 30, 2008, the Employment
Agreement dated January 1, 2006 between the Consultant, the Company and
Meadowbrook shall be terminated, except for those provisions that survive
termination. All amounts or benefits due the Consultant under the Employment
Agreement shall terminate effective September 30, 2008 with the exception of the
following three (3) items: (1) the Consultant’s right to elect and pay for
health and dental continuation coverage pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1985 (“COBRA”); and (2) the Consultant shall remain
eligible to participate in Company’s Discretionary Bonus Plan for 2008 and the
Company’s Long Term Incentive Plan for 2007 and 2008.
     11. Notices. All notices or other communications required or permitted
hereunder shall be given in writing and shall be deemed sufficient if delivered
by hand (including by courier), mailed by registered or certified mail, postage
prepaid (return receipt requested), or sent by facsimile transmission, as
follows:
If to the Consultant:
To the address on file at the Company
If to the Company:
MEADOWBROOK, INC.
Attn: General Counsel
26255 American Drive
Southfield, MI 48034
If to Meadowbrook:
MEADOWBROOK INSURANCE GROUP, INC.
Attn: General Counsel
26255 American Drive
Southfield, MI 48034
or such other address as shall be furnished in writing by such party, and any
such notice or communication shall be effective and be deemed to have been given
as of the date so delivered or, if mailed upon receipt thereof; provided,
however, that any notice or communication changing any of the addresses set
forth above shall be effective and deemed given only upon its receipt.
     12. Severability. If any provision of this Agreement, or any application
thereof to any circumstance, is invalid, in whole or in part, such provision or
application shall to that extent be severable and shall not affect other
provisions or applications of this Agreement.

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     13. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Michigan, excluding any choice of law rule
requiring application of the law or any other jurisdiction. Any action arising
out of or relating to this Agreement, its performance, enforcement or breach,
will be venued in the Circuit Court for the County of Oakland, State of
Michigan.
     14. Entire Agreement. This Agreement and the Confidential Information
Agreement, which is incorporated herein by reference, sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior and contemporaneous agreements, written or oral,
between them as to such subject matter.
     15. Headings. The headings contained herein are solely for the purpose of
reference, are not part of this Agreement and shall not in any way affect the
meaning or interpretation of this Agreement.
     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the 1st day of October, 2008.

         
 
  MEADOWBROOK, INC.    
 
       
 
  /s/ Robert S. Cubbin    
 
       
 
  By: Robert S. Cubbin    
 
  Its: President    
 
       
 
  MEADOWBROOK INSURANCE GROUP, INC.
 
       
 
  /s/ Robert S. Cubbin    
 
       
 
  By: Robert S. Cubbin    
 
  Its: President    

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the 1st day of October, 2008.

         
 
  CONSULTANT    
 
       
 
  /s/ Merton J. Segal    
 
       
 
  Merton J. Segal    

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