EXHIBIT 10.3
EMPLOYMENT AGREEMENT
     THIS EMPLOYMENT AGREEMENT (hereinafter referred to as the “Agreement”) is
effective January 1, 2009, by and among the Meadowbrook, Inc., and Meadowbrook
Insurance Group, Inc., (hereinafter collectively, the “Company”), and
                     (hereinafter referred to as the “Executive”).
RECITALS:
     WHEREAS, the Company and the Executive desire to set forth their respective
rights and obligations in connection with the employment of the Executive by the
Company by entering into a contract of employment;
     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. Employment. The Company agrees to employ the Executive during the
Employment Term (as such term is hereinafter defined in Paragraph 5 below) and
the Executive hereby accepts such employment by the Company, subject to the
terms and conditions hereinafter set forth and the Associate Manual (hereinafter
referred to as the “Manual”) of the Company. To the extent that the terms and
conditions of this Agreement conflict with the Manual, this Agreement shall
control while in effect. This Agreement establishes the terms of the Executive’s
employment and the payments to which the Executive is entitled during such
employment and upon termination of employment. Nothing in this Agreement changes
the at-will status of the Executive’s employment. The Company retains the right
to terminate the Executive’s employment with the Company for any reason, or no
reason at all, at any time and with the notice prescribed below. The Executive
retains the same right.
     2. Responsibilities and Duties. The Executive shall be employed as a Sr.
Vice President or in such other position(s) and with such responsibilities and
duties as the President & Chief Executive Officer or the Board of Directors of
the Company may from time to time determine. The Executive shall devote his or
her full working time to the performance of his or her responsibilities and
duties hereunder.
     3. Compensation. In consideration of the performance by the Executive of
his or her obligations during the Employment Term, the Company will during the
Employment Term pay the Executive:

  (A)   Base Salary. A base salary of not less than $                     per
month (hereinafter referred to as “Base Salary”). Such Base Salary shall be
payable, in accordance with the normal payroll practices of the Company then in
effect. Increases, if any, in the Base Salary shall be determined by the
Company.

 

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  (B)   Discretionary Bonus. A discretionary bonus targeted at a minimum of ___
percent (___%) of the Executive’s annual Base Salary (hereinafter referred to as
the “Discretionary Bonus”). This Discretionary Bonus may be paid at the sole
discretion of the Company and will be based on attainment of:

  (1)   Corporate Goals (Profit, ROE, etc);     (2)   Profit Center Goals; and  
  (3)   Personal Goals and Objectives.

The Company shall annually review and establish the Discretionary Bonus target
and/or the bonus formula described in Section 3(B)(1)-(3).

  (C)   Stock Options or Restricted Stock. The Executive shall be eligible for
stock option and restricted stock awards, in accordance with the terms and
conditions of the 1995 and 2002 Stock Option Plans of Meadowbrook Insurance
Group, Inc. Restricted Stock awards, if any, are subject to the review, approval
and the discretion of the Compensation Committee of the Board of Directors. In
the event of a Change in Control, all stock options and restricted stock awards
previously granted to the Executive shall become exercisable by the Executive
and all restricted stock awards previously granted to the Executive shall become
immediately vested.     (D)   Long Term Incentive Plan. The Executive shall be
eligible for stock awards and performance bonus awards under the Meadowbrook
Insurance Group, Inc. Long Term Incentive Plan (the “LTIP”). The aggregate
annual value of a target award shall be ___ percent (___%) of the Executive’s
annual Base Salary. In the event of a Change in Control the Executive shall be
entitled to (i) a pro rata portion of the bonus award for the performance period
in which the Change in Control occurs based on the Company’s ROE as of such
date; (ii) cash awards that have not yet been paid for performance period ending
prior to the effective date of the Change in Control; and (iii) to the extent
provided in a restricted stock agreement, all shares of restricted stock shall
become fully vested and nonforfeitable.     (E)   Severance.

  (1)   Without Cause Termination or Termination for Good Reason. In the event
that prior to a Change in Control, the Executive’s employment is terminated by
the Company during the Employment Term without Cause, or terminated by the
Executive for Good Reason, then the

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      Company shall make the following payments to the Executive:

  (i)   The Company shall pay the Executive’s base salary for a period of one
(1) year in accordance with the Company’s regular bi-monthly payroll schedule.
In no event shall any severance payable in bi-monthly installments be made after
the last day of the second calendar year following the year in which the
Executive’s employment terminates. The amount of severance payable in bi-monthly
installments shall not exceed the amount eligible for exemption as separation
pay under Treas. Reg. § 1.409A-1(b)(9) and to the extent Executive is entitled
to severance payments in excess of such amount, the Employer shall pay Executive
the excess amount in a lump sum and such lump sum shall be paid within ten
(10) days following date Executive’s employment terminates. Payment of the
amounts due under Section 5(c)(i) shall not be reduced in the event the
Executive obtains other employment following termination of employment by the
Employer.     (ii)   The Executive shall also be entitled to payment of a pro
rata share of such portion of the Discretionary Bonus for the year in which his
or her employment terminates that is based on the Company’s actual performance
and the performance criteria in effect for the current performance period. Such
pro rata portion shall be determined by a fraction, the numerator of which is
the number of days in the year the Executive was employed by the Company and the
denominator of which is 365. Such payment shall be made no later than the
February 28 of the calendar year immediately following the year in which the
Executive’s employment terminates.     (iii)   The Company shall also pay on the
Executive’s behalf an amount equal to the premiums payable by the Executive in
the event the Executive elects continuation coverage pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). Such payments
shall cease upon the earlier of eighteen (18) months of continuation coverage or
the cessation of the Executive’s and the Executive’s family members rights to
COBRA

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      continuation coverage. The Company shall make such payments directly to
the party to whom premiums are payable at such times as they are due under
COBRA.

  (2)   Termination Following Change in Control. In the event that following a
Change in Control, the Executive’s employment is terminated by the Company
during the Employment Term without Cause, or terminated by the Executive for
Good Reason, then the Company shall make the following payments to the
Executive:

  (i)   The Company shall make a single lump sum payment to the Executive equal
to one (1) times the sum of the Executive’s existing annual Base Salary, the
Executive’s target Discretionary Bonus and the Executive’s target award for the
then current three year performance period under the Company’s Long Term
Incentive Plan, subject to repayment by the Executive upon the Executive’s
breach of his or her covenant to not compete with the Company or to solicit
Company employees as provided in Section 7. The Company shall make such payment
within ten (10) days following the date the Executive’s employment terminates.  
  (ii)   The Executive shall also be entitled to payment of a pro rata share of
such portion of the Discretionary Bonus for the year in which his or her
employment terminates that is based on the Company’s actual performance and the
performance criteria in effect for the current performance period. Such pro rata
portion shall be determined by a fraction, the numerator of which is the number
of days in the year that the Executive is employed by the Company and the
denominator of which is 365. Such payment shall be made no later than the
February 28 of the calendar year immediately following the year in which the
Executive’s employment terminates.     (iii)   The Company shall also pay on the
Executive’s behalf an amount equal to the premiums payable by the Executive in
the event the Executive elects continuation coverage pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). Such payments
shall cease upon the

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      earlier of eighteen (18) months of continuation coverage or the cessation
of the Executive’s and the Executive’s family members rights to COBRA
continuation coverage. The Company shall make such payments directly to the
party to whom premiums are payable at such times as they are due under COBRA.

  (3)   For Cause Termination.

  (i)   For purposes of this Agreement, “Cause” shall mean:

  (a)   the failure by the Executive to obey the reasonable and lawful orders of
the President, the Board of Directors of the Company or his or her direct
supervisor;     (b)   misconduct by the Executive that is materially injurious
to the Company; or     (c)   the Executive engaging in dishonest activities
injurious to the Company.

  (ii)   Should the Executive’s employment be terminated by the Company for
Cause during the Employment Term, this Agreement shall be terminated forthwith
without notice or payment in lieu thereof and the Executive shall not be
entitled to receive any other consideration (beyond consideration accrued to the
date of dismissal that is owing but not yet paid) from the Company.     (iii)  
Further, in the event the Executive’s employment is terminated by the Company
during the Employment Term for Cause, the Executive shall be paid no severance
payments.

  (F)   Change in Control. For purposes of this Agreement, a “Change in Control”
shall be deemed to have taken place upon:

  (1)   The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of
either (a) the then

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      outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (b) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that
for purposes of this subparagraph 1, the following acquisitions shall not
constitute a Change in Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses (a), (b) and
(c) of subparagraph 3 of this Section (F); or

  (2)   Individuals who, as of the date hereof, constitute the Board of
Directors of the Company (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board of Directors; provided, however,
that any individual who becomes a director subsequent to the date hereof and
whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (either by a specific vote or by approval of the proxy statement
of the Company in which such person is named as a nominee for director, without
written objection to such nomination) shall be deemed to be a member of the
Incumbent Board; provided, further, that notwithstanding the immediately
preceding proviso, any individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
contests by or on behalf of a Person, other than the Board of Directors of the
Company, shall not be deemed to be a member of the Incumbent Board; or     (3)  
Consummation of a reorganization, merger, share exchange or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company (a “Business Combination”), in each case, unless, following such
Business Combination: (a) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting

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      Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 65% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be; (b) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Company or such corporation resulting from the Business
Combination) beneficially owns, directly or indirectly, 35% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination; and (c) at least a
majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board immediately
prior to the time of the execution of the initial agreement, or of the action of
the Board of Directors of the Company, providing for such Business Combination;
or     (4)   Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.

  (G)   Good Reason. The Executive will be deemed to have terminated his or her
employment for “Good Reason” if he or she tenders his or her resignation to the
Company following the occurrence of any one or more of the following, without
the Executive’s prior written consent and the Company and the Executive have not
entered into a written agreement that replaces this Agreement: (i) the Executive
is assigned authority and responsibility materially inconsistent with the
authority and responsibility contemplated by Section 2 of this Agreement,
including without limitation, diminution of his or her authority and
responsibility or change in reporting requirements; (ii) a

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      material reduction in the Executive’s Base Salary or total compensation
opportunity; (iii)  the Company fails to vest the Executive with or removes from
him or her the duties, responsibilities, authority or resources that he or she
reasonably needs to competently perform his or her duties for the Company;
(iiv)  the Company changes the primary location of the Executive’s employment to
a place that is more than 50 miles from Southfield, Michigan; (v) the Company
gives notice that it will not renew this Agreement, pursuant to Section 5 below;
or (vi) the Company otherwise commits a material breach of its obligations under
this Agreement. Upon the occurrence of any event referenced in (i) through
(vi) above, the Executive shall, within ninety (90) of such occurrence, provide
the Company notice of the existence of the condition. Upon receiving notice, the
Company shall have no more than thirty (30) days to remedy the condition. The
Executive shall have six (6) months from the date of the initial existence of
one of the above events to terminate his or her employment under this section.

     4. Other Benefits. The Executive shall also be entitled to such additional
benefits as outlined in the Manual during the Employment Term or severance
period, with the exception of 401(k) participation during the severance period.
     5. Employment Term. The period of the Executive’s employment by the Company
under this Agreement (the “Employment Term”) shall commence on January 1, 2009
and terminate on such earlier date upon the occurrence of any of the following
events and shall continue through December 31, 2011 (or such later date as
provided below) or the earliest date on which any of the following events
occurs:

  (A)   the death or retirement of the Executive;     (B)   the date on which
the Company discharges the Executive by reason of the Executive’s Total
Disability. For purposes of this Agreement, “Total Disability” shall have the
same meaning as used in the Manual and consistent with the Long Term Disability
Benefits of the Company;     (C)   a mutual written agreement between the
Company and the Executive regarding an early termination date; or     (D)   the
date on which the Company terminates the Executive’s employment for Cause as
recited in Section 3(E)(3).

Either party hereto may elect not to renew this Agreement by giving the other
party written notice on or before December 31, 2009, and annually thereafter. If
written notice of the election not to renew this Agreement is not provided on or
before December 31, 2009, and annually

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thereafter, The Employment Term shall automatically be extended for an
additional one (1) year period.
     6. Confidential Information Agreement. The Executive agrees the
Confidential Information Agreement executed by him or her and dated
                     (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.
     7. Covenant not to Compete or Solicit Employees. In the event severance
becomes payable to The Executive following a Change in Control, the Executive
further agrees to the restrictive covenants of this Section:

  (A)   The Executive agrees that, for two (2) years following the termination
of the Executive’s employment under circumstances described in Section 3(E), he
or she will 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: 

  (1)   “Compete” means directly or indirectly owning, managing or operating a
Competitor, which solicits or obtains business of the Company, or directly or
indirectly serving as an employee, officer or director of or a consultant to a
Competitor, which solicits or obtains business of the Company; or soliciting or
inducing any employee to terminate his or her employment with the Company or any
of its subsidiaries and become employed by a Competitor; or induce an agent of
the Company to cease producing business for the Company or terminate its agency
agreement with the Company.     (2)   “Competitor” means any person, firm,
partnership, corporation, trust or other entity that owns, controls or is an
insurance company or a similar financial services company (a “Financial Services
Company”).

  (B)   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 and will not apply to any of the successor’s other offices.
    (C)   Section 7(A) will not prohibit the Executive from directly or
indirectly owning or acquiring any capital stock or similar securities that are
listed on a securities exchange or quoted on

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      the NASDAQ or NYSE and do not represent more than 5% of the outstanding
capital stock of any Financial Services Company.

  (D)   The Executive agrees that a violation of this Section 7would result in
direct, immediate and irreparable harm to the Company, and in such event, agrees
that, in addition to their other rights and remedies, the Company would be
entitled to injunctive relief enforcing the terms and provisions of Section 7
and a return to the Company of any severance payments under Section 3(E). 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, as well as the Executive. Neither this Agreement
nor any right or interest hereunder shall be assignable or transferable by the
Executive, his or her beneficiaries or legal representatives.
     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 Executive and the Company. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any or subsequent time. No agreement or representation, oral or
otherwise, express or implied, with respect to the subject matter hereof has
been made by either party which are not expressly set forth in this Agreement.
     10. 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 Executive:       If to the Company:    
 
               
 
  To the address on file       MEADOWBROOK, INC    
 
  with the Company’s       Attn: Human Resources    
 
  Human Resources       26600 Telegraph Road, Suite 300    
 
  Department as the       Southfield, MI 48034    
 
  Executive’s home address.            

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.

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     11. 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.
     12. 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.
     13. 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, including, by way of example and not
limitation, the At-Will Employment and Severance Agreement between Executive and
the Company, dated                     .
     14. Compliance with Code Section 409A. Notwithstanding anything contained
herein to the contrary, if at the time of a termination of employment, (i) the
Executive is a “specified employee” as defined in Code Section 409A, and the
regulations and guidance thereunder in effect at the time of such termination
(“409A”), and, (ii) any of the payments or benefits provided hereunder may
constitute “deferred compensation” under 409A, then, and only to the extent
required by such provisions, the date of payment of such payments or benefits
otherwise provided shall be delayed for a period of up to 6 months following the
date of termination. The parties intend, however, that this Agreement shall be
exempt from the 409A as either a separation pay arrangement under Treas. Reg.
1.409A-1(b)(9) or a short term deferral of compensation under 1.409A-1(b)(4).
     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 on this 1st day of January, 2009.

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

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