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                                                                   EXHIBIT 10.26


                        RELEASE AND SEVERANCE AGREEMENT

         This Release and Severance Agreement (hereinafter referred to as
"Agreement"), between JEFFREY H. KOENIG, together with his heirs, (hereinafter
collectively referred to as "Mr. Koenig") and MEADOWBROOK, INC., and MEADOWBROOK
INSURANCE GROUP, INC., their agents, employees, officers, directors,
shareholders, subsidiaries, affiliates, successors or assigns (hereinafter
collectively referred to as "MEADOWBROOK"), effective this 9th day of November,
2001.

                                    RECITALS:

         WHEREAS, Mr. Koenig commenced his employment with MEADOWBROOK on
November 27, 2000;

         WHEREAS, Mr. Koenig's employment with MEADOWBROOK terminated, effective
November 8, 2001;

         WHEREAS, a severance package has been offered by MEADOWBROOK to Mr.
Koenig which is more particularly described below; and

         WHEREAS, Mr. Koenig and MEADOWBROOK have agreed to settle all claims
that they may have against one another;

         NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

                                   AGREEMENT:

1.       MEADOWBROOK and Mr. Koenig agree to release, acquit, forever discharge
one another from, and covenant not to sue for, any and all claims, demands,
actions, causes of action, which either of them now have, or which may hereafter
accrue arising out of or relating to Mr. Koenig's employment with MEADOWBROOK
and the termination thereof, his Employment Agreement, dated October 31, 2000,
with MEADOWBROOK and the termination thereof, and which shall include, but not
be limited to, claims for breach of contract, breach of fiduciary duty,
negligence, tort, wrongful discharge, discrimination based upon federal, state
or local law, claims based upon any other federal, state or local law or common
law seeking legal or equitable relief, money damages, loss of pay, loss of
fringe benefits, compensatory damages, pain and suffering, emotional distress,
bodily injury, exemplary or punitive damages;

2.       In conjunction with the consideration provided in the Agreement, Mr.
Koenig knowingly agrees to release, acquit, forever discharge and covenant not
to sue MEADOWBROOK for any claim of discrimination including any claim he might
have under the Age Discrimination in Employment Act of 1967 against MEADOWBROOK
arising out of his employment with



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MEADOWBROOK and termination thereof. Mr. Koenig has been advised to consult with
legal counsel prior to executing the Agreement and has been provided twenty-one
(21) days within which to consider this Agreement. Mr. Koenig further
understands that he has seven (7) days after the execution of the Agreement in
which to provide a written revocation of this Agreement, provided that nothing
in Paragraphs 1 or 2 shall limit Mr. Koenig's right to enforce this Agreement;

3.       In consideration for the above, MEADOWBROOK agrees to pay to Mr. Koenig
a severance to be paid as follows:

         a. A one-time lump sum payment equivalent to one hundred percent (100%)
         of twelve (12) months of his former gross base salary ($280,000.00).
         This payment shall be paid to Mr. Koenig, less all applicable local,
         state, federal and other withholdings. This severance payment shall
         only be paid following the expiration of the seven (7) day revocation
         period after execution of this Agreement by Mr. Koenig and its return
         to MEADOWBROOK. MEADOWBROOK shall send a check for this sum via
         overnight mail to Mr. Koenig on the eighth (8th) day following his
         execution of this Agreement;

                  (i) In the event that Mr. Koenig begins any employment during
                  the period of November 9, 2001 through May 8, 2002, Mr. Koenig
                  shall repay to MEADOWBROOK seventy-one percent (71%) of six
                  (6) months of his former gross base salary ($105,000), less
                  any pro-rata reduction based upon Mr. Koenig's next employment
                  salary being less than $280,000. This sum shall be repaid to
                  MEADOWBROOK within fifteen (15) business days of the
                  acceptance of such new employment;

                  (ii) In the event that Mr. Koenig begins any employment during
                  the period of May 9, 2002 through August 8, 2002, Mr. Koenig
                  shall repay to MEADOWBROOK forty-six percent (46%) of the
                  portion of his former gross base salary which would have been
                  payable for the period from the first date his new employment
                  begins through November 8, 2002, less any pro-rata reduction
                  based upon Mr. Koenig's next employment salary being less than
                  $280,000. This sum shall be repaid to MEADOWBROOK within
                  fifteen (15) business days of the acceptance of such new
                  employment;

         b. Additionally, Mr. Koenig shall be paid a one-time lump sum payment
         of $56,000.00. This payment shall be in lieu of any reimbursement of
         moving expenses and any other incidental expenses that may be incurred
         by Mr. Koenig. This payment shall be paid to Mr. Koenig, less all
         applicable local, state, federal and other withholdings. This payment
         shall only be paid following the expiration of the seven (7) day
         revocation period after execution of this Agreement by Mr. Koenig and
         its return to MEADOWBROOK. This sum shall be added to and included in
         the check sent via overnight mail to Mr. Koenig on the eighth (8th) day
         following his execution of this Agreement;




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         c. As additional consideration for the above, MEADOWBROOK agrees to
         waive any claim it may have for the repayment by Mr. Koenig of the
         $100,000 Signing Bonus paid to him pursuant to his Employment
         Agreement, dated October 31, 2000;

         d. Further, MEADOWBROOK and Mr. Koenig agree that any unvested Stock
         Options granted to Mr. Koenig prior to the date of this Agreement shall
         be forfeited by Mr. Koenig and canceled by MEADOWBROOK without any
         payment to Mr. Koenig;

         e. Nothing in this Agreement shall affect Mr. Koenig's right to be paid
         for any earned but unused vacation time or business-related expenses
         submitted and approved prior to November 8, 2001;

4.       Mr. Koenig agrees to actively and in good faith seek new employment and
to immediately notify the Human Resources Department at MEADOWBROOK upon his
acceptance of any other employment and the start date of such employment. Mr.
Koenig agrees that he is not entitled to the payments recited in Paragraph No. 3
under any policy, contract, custom or usage of MEADOWBROOK;

5.       Mr. Koenig's existing health and dental insurance shall be terminated
effective November 8, 2001. However, for a period of twelve (12) months from
November 9, 2001 through November 8, 2002, MEADOWBROOK shall pay the insurance
premium to continue Mr. Koenig's health and dental insurance in accordance with
COBRA. Mr. Koenig shall pay all co-payments and deductibles in the same manner
as during his employment with MEADOWBROOK. If Mr. Koenig accepts other
employment which affords him health and/or dental insurance, MEADOWBROOK'S
obligation for payment of Mr. Koenig's COBRA health and/or dental insurance
premiums shall cease upon the date he is eligible to enroll for such new health
and/or dental insurance coverage. In the event that Mr. Koenig chooses to
continue his health and/or dental insurance in accordance with COBRA after
November 8, 2002, or after becoming eligible to enroll for new health and/or
dental insurance coverage with a subsequent employer, he shall be responsible
for all future COBRA health and/or dental insurance premiums or payments. Mr.
Koenig shall immediately notify the Human Resources Department at MEADOWBROOK
upon his acceptance of other employment and his eligibility date to enroll for
new health and/or dental insurance coverage. Mr. Koenig agrees that he is not
entitled to the payment of his COBRA premiums recited in this paragraph under
any policy, contract, custom or usage of MEADOWBROOK;

6.       All other fringe benefits, including, but not limited to, life
insurance, disability insurance and any future contributions to his 401-K
account that Mr. Koenig was entitled to as an Associate of MEADOWBROOK shall
cease effective November 8, 2001, provided that nothing contained herein shall
affect Mr. Koenig's rights to the assets in his 401-K account or his conversion
rights under his health, life or dental insurance;






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7.       Mr. Koenig and MEADOWBROOK agree not to disparage each other to any
third-party. Further, Mr. Koenig and MEADOWBROOK agree to keep the terms and
conditions of the settlement confidential, except to the extent that the terms
and conditions of the settlement must be disclosed to the parties' accountants
or attorneys. However, Mr. Koenig may disclose the terms and conditions of the
settlement to his spouse. Disclosure of the terms and conditions of the
settlement, (except as may be required by a court or agency of competent
jurisdiction for which notice as soon as practicable to the non-disclosing party
is required), inconsistent with the terms and conditions of the confidentiality
provision shall entitle the non-disclosing party to all legal and equitable
remedies to prevent such disclosure or any damages as a result thereof, and
entitle the non-disclosing party to an award of attorneys' fees, costs or
expenses against the disclosing party;

8.       In terms of a reference for future employment, MEADOWBROOK has agreed
with Mr. Koenig to adhere to its existing policy. MEADOWBROOK'S existing
corporate policy is to provide the prospective employer with only the name of
the employee, title and dates of employment;

9.       In consideration of the sums paid pursuant to Paragraph 3, Mr. Koenig
has executed a Confidential Information Agreement, dated November 8, 2001 which
shall remain in full force and effect, provided that the terms and conditions of
the Confidential Information Agreement are met, there shall be no restriction on
the identity or business of any future employer of Mr. Koenig;

10.      Mr. Koenig agrees to resign as an Officer of Meadowbrook Insurance
Group, Inc. ("Corporation"), and as an officer and/or director of all of its
subsidiary companies, including insurance company subsidiaries, effective
November 8, 2001. Mr. Koenig shall continue to be entitled to defense and
indemnification for any alleged acts or omissions as an Officer, employee or
agent of Corporation and as an Officer, Director, employee or agent of its
subsidiaries to the fullest extent permitted by the Bylaws of the Corporation
and/or any subsidiary in effect as of the date of this Agreement, the Michigan
Business Corporation Act and the Corporation's and/or subsidiary's Director's
and Officer's liability insurance coverage which will continue to cover Mr.
Koenig on the same basis as other current and former directors and officers are
covered;

11.      This Agreement may not be altered, modified or changed except upon the
express written consent of Mr. Koenig and MEADOWBROOK;

12.      This Agreement and the Confidential Information Agreement, which is
incorporated herein by reference, represent the complete understanding between
the parties. No other promises or agreements shall be binding or modify the
Agreement. All other prior understandings, statements or beliefs have been
merged into the Agreement;

13.      This Agreement shall be interpreted under the laws of the State of
Michigan. Its language shall be construed as a whole, according to its fair
meaning and not strictly construed for or against either party. Should any
provision of the Agreement be declared illegal or unenforceable by any court of
competent jurisdiction and cannot be modified to be enforceable, such provisions
shall immediately become null and void or revised by a court of competent
jurisdiction to be enforceable, leaving the remainder of the Agreement in full
force and effect;

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14.      Any amount under this Agreement shall not be due and payable by
MEADOWBROOK until the Agreement has been executed by all parties and the time
referenced in Paragraph No. 2 has lapsed;

15.      In conjunction with the consideration provided in this Agreement, in
the event that Mr. Koenig decides not to execute this Agreement, or revokes this
Agreement within the above stated seven (7) day period, this Agreement shall be
null and void. Further, this Agreement and all settlement discussions,
understandings or statements with regard to this Agreement shall be inadmissible
in any court of law or administrative proceeding of any kind;

16.      MEADOWBROOK shall not be obligated to pay any severance payment or
waive any sums due it (as set forth in Paragraph No. 3), if Mr. Koenig does not
execute or revokes this Agreement; and

17.      Mr. Koenig agrees that he has had sufficient time to review this
Agreement, consult with legal counsel and executes this Agreement voluntarily.


         IN WITNESS WHEREOF, JEFFREY KOENIG, executes this Agreement on the date
designated below.

         /s/ Jeffrey Koenig        11-08-01        [SIG}                11-08-01
         ---------------------    --------  -----------------------     --------
         JEFFREY KOENIG              Date          WITNESS                Date


         IN WITNESS WHEREOF, MEADOWBROOK, INC., executes the Agreement on the
 date designated below.

         MEADOWBROOK, INC.

         /s/ Michael G. Costello     11/8/01   /s/ Susan Cubbin         11/08/01
         -----------------------    ---------  ----------------------   --------
         MICHAEL G. COSTELLO          Date         WITNESS                Date
         SENIOR VICE PRESIDENT


         IN WITNESS WHEREOF, MEADOWBROOK INSURANCE GROUP, INC., executes the
Agreement on the date designated below.

         MEADOWBROOK INSURANCE GROUP, INC.

         /s/ Michael G. Costello     11/8/01  /s/ Susan Cubbin          11/08/01
         -----------------------    --------  --------------------      --------
         MICHAEL G. COSTELLO        Date           WITNESS                Date
         SENIOR VICE PRESIDENT


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