Exhibit 10.1**EMPLOYMENT AGREEMENT**     **THIS EMPLOYMENT AGREEMENT**(hereinafter referred to as the “Agreement”) is effective January 1,2006, by and among Meadowbrook, Inc., and Meadowbrook Insurance Group, Inc., (hereinafter referredto as the “Company”), and Merton J. Segal (hereinafter referred to as the “Executive”).**RECITALS:**     **WHEREAS**, the Company and the Executive desire to set forth their respective rights andobligations in connection with the employment of the Executive by the Company by entering into acontract of employment;     **NOW THEREFORE**, in consideration of the premises and of the mutual covenants, agreements andunderstandings contained herein, the parties hereto agree as follows:**AGREEMENT:**     **1. Employment**. The Company agrees to employ the Executive during the Employment Term (as suchterm is hereinafter defined in Paragraph ) and the Executive hereby accepts such employment by theCompany, subject to the terms and conditions hereinafter set forth and the Company’s AssociateManual (hereinafter referred to as the “Manual”). To the extent that the terms and Conditions ofthis Agreement conflict with the Manual, this Agreement shall control while in effect. ThisAgreement establishes the terms of Executive’s employment and the payments to which the Executiveis entitled during such employment and upon termination of employment. Nothing in this Agreementchanges the at-will status of the Executive’s employment. The Company retains the right toterminate Executive’s employment with the Company for any reason and at any time and the Executiveretains the same right.     **2. Responsibilities and Duties**. The Executive shall be employed as the Company’s Chairman orin such other position(s) and with such responsibilities and duties as the Board of Directors ofthe Company may from time to time determine. The Executive shall devote his full working time tothe performance of his responsibilities and duties hereunder.     **3. Compensation**. In consideration of the performance by Executive of his obligations duringthe Employment Term, the Company will during the Employment Term pay the Executive: **(A)** **Base Salary**. A base salary of not less than $31,250 per month(hereinafter referred to as “Base Salary”). Such Base Salary shall be payablein accordance with the normal payroll practices of the Company then in effect.Any increases in the Base Salary shall be determined by the Company.
 

 
 **(B)** **Discretionary Bonus**. A discretionary bonus targeted at aminimum of fifty percent (50%) of Executive’s Base Salary (hereinafter referredto as the “Discretionary Bonus”). This Discretionary Bonus may be paid at thesole discretion of the Company and will be based on attainment of: (1) Corporate Goals (growth & profit);  (2) Profit Center Goals; and  (3) Personal Goals and Objectives.The Company and the Executive shall annually review and establish the Discretionary Bonustarget and the bonus formula described in Section 3(B)(1)-(3). **(C)** **Stock Options**. The Executive has been, and shall continue tobe, eligible for the stock options, in accordance with the terms and conditionsof the 1995 and 2002 Stock Option Plans of Meadowbrook Insurance Group, Inc.In the event of any Change in Control, all stock options previously granted tothe Executive shall become exercisable by the Executive.  **(D)** **Long Term Incentive Plan**. The Executive shall be eligible forrestricted stock awards and performance bonus awards under the MeadowbrookInsurance Group, Inc. Long Term Incentive Plan.  **(E)** **Severance**. **(1)** **Without Cause Termination orTermination for Good Reason**. In the event that prior to a Changein Control, Executive’s employment is terminated by the Companyduring the Employment Term without Cause or terminated by theExecutive for Good Reason, then the Company shall make thefollowing payments to the Executive: (i) Executive shallbe paid a severance equal to the lesser of twenty-four(24) months of his Base Salary, or the Base Salary forthe months remaining in the Employment Term. Thisseverance shall be paid bi-monthly in accordance withthe Company’s regular payment schedule of its employees.  (ii) The Executiveshall also be entitled to payment of a pro rata shareof such portion of the Discretionary Bonus for the yearin which his employment terminates that is based onCompany performance criteria. Such pro rata portionshall be determined by a fraction, the numerator ofwhich is the number of days in the year that theExecutive is employed by the Company and the denominatorof which is 365.
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   Such payment shall be made no later than the February28 of the calendar year immediately following the yearin which Executive’s employment terminates. (iii) The Companyshall also pay the Executive an amount equal to thepremiums payable by the Executive in the event theExecutive elects continuation coverage pursuant to theConsolidated Omnibus Budget Reconciliation Act of 1985(“COBRA”). Such payments shall cease upon the earlierof eighteen (18) months of continuation coverage or thecessation of the Executive’s and the Executive’s familymembers rights to COBRA continuation coverage. TheCompany shall make such payments directly to the partyto whom premiums are payable at such times as they aredue under COBRA. **(2)** **Termination Following Change inControl**. In the event that following a Change in Control,Executive’s employment is terminated by the Company during theEmployment Term without Cause or terminated by the Executive forGood Reason, then the Company shall make the following paymentsto the Executive: (i) The Company shallmake a single lump sum payment to Executive equal to two(2) times the sum of the Executive’s existing BaseSalary and the Executive’s target Discretionary Bonus,subject to repayment by the Executive upon theExecutive’s breach of his covenant to not compete withthe Company or to solicit Company employees as providedin Section 7. The Company shall make such payment withinten (10) days following the date the Executive’semployment terminates.  (ii) The Executiveshall also be entitled to payment of a pro rata shareof such portion of the Discretionary Bonus for the yearin which his employment terminates that is based onCompany performance criteria. Such pro rata portionshall be determined by a fraction, the numerator ofwhich is the number of days in the year that theExecutive is employed by the Company and the denominatorof which is 365. Such payment shall be made no laterthan the
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   February 28 of the calendar year immediately followingthe year in which Executive’s employment terminates. (iii) The Companyshall also pay the Executive an amount equal to thepremiums payable by the Executive in the event theExecutive elects continuation coverage pursuant to theConsolidated Omnibus Budget Reconciliation Act of 1985(“COBRA”). Such payments shall cease upon the earlierof eighteen (18) months of continuation coverage or thecessation of the Executive’s and the Executive’s familymembers rights to COBRA continuation coverage. TheCompany shall make such payments directly to the partyto whom premiums are payable at such times as they aredue under COBRA. **(3)** **For Cause Termination**. (i) For purposes ofthis Agreement, “Cause” shall mean: (a) the failure by the Executive to obey thereasonable and lawful orders of the Board ofDirectors of the Company or his directsupervisor;  (b) misconduct by the Executive that is materiallyinjurious to the Company; or  (c) the Executive engaging in dishonest activitiesinjurious to the Company. (ii) Should theExecutive’s employment be terminated by the Company forCause during the Employment Term, this Agreement shallbe terminated forthwith without notice or payment inlieu thereof and the Executive shall not be entitled toreceive any other consideration (beyond considerationaccrued to the date of dismissal that is owing but notyet paid) from the Company.  (iii) Further, in theevent the Executive’s employment is terminated by theCompany during the Employment Term for Cause Executiveshall be paid no severance payments.
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 **(F)** **Change in Control**. For purposes of this Agreement, a “Change inControl” shall be deemed to have taken place upon: (1) The acquisition by anyindividual, entity or group (within the meaning of Section13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, asamended (the “Exchange Act”)) (a “Person”) of beneficialownership (within the meaning of Rule 13d-3 promulgated underthe Exchange Act) of 35% or more of either (a) the thenoutstanding shares of common stock of the Company (the“Outstanding Company Common Stock”) or (b) the combined votingpower of the then outstanding voting securities of the Companyentitled to vote generally in the election of directors (the“Outstanding Company Voting Securities”); provided, however,that for purposes of this subparagraph 1, the followingacquisitions shall not constitute a Change in Control: (i) anyacquisition directly from the Company, (ii) any acquisition bythe Company, (iii) any acquisition by any employee benefit plan(or related trust) sponsored or maintained by the Company or anycorporation controlled by the Company, or (iv) any acquisitionby any corporation pursuant to a transaction which complies withclauses (a), (b) and (c) of subparagraph 3 of this Section(F); or  (2) Individuals who, as of the datehereof, constitute the Board of Directors of the Company (the“Incumbent Board”) cease for any reason to constitute at least amajority of the Board of Directors; provided, however, that anyindividual who becomes a director subsequent to the date hereofand whose election, or nomination for election by the Company’sshareholders, was approved by a vote of at least a majority ofthe directors then comprising the Incumbent Board (either by aspecific vote or by approval of the proxy statement of theCompany in which such person is named as a nominee for director,without written objection to such nomination) shall be deemed tobe a member of the Incumbent Board; provided, further, thatnotwithstanding the immediately preceding proviso, anyindividual whose initial assumption of office occurs as a resultof an actual or threatened election contest with respect to theelection or removal of directors or other actual or threatenedsolicitation of proxies or contests by or on behalf of a Person,other than the Board of Directors
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   of the Company, shall not be deemed to be a member of theIncumbent Board; or (3) Consummation of a reorganization,merger, share exchange or consolidation or sale or otherdisposition of all or substantially all of the assets of theCompany (a “Business Combination”), in each case, unless,following such Business Combination: (a) all or substantiallyall of the individuals and entities who were the beneficialowners, respectively, of the Outstanding Company Common Stockand Outstanding Company Voting Securities immediately prior tosuch Business Combination beneficially own, directly orindirectly, more than 65% of, respectively, the then outstandingshares of common stock and the combined voting power of the thenoutstanding voting securities entitled to vote generally in theelection of directors, as the case may be, of the corporationresulting from such Business Combination (including, withoutlimitation, a corporation which as a result of such transactionowns the Company or all or substantially all of the Company’sassets either directly or through one or more subsidiaries) insubstantially the same proportions as their ownership,immediately prior to such Business Combination, of theOutstanding Company Common Stock and Outstanding Company VotingSecurities, as the case may be; (b) no Person (excluding anycorporation resulting from such Business Combination or anyemployee benefit plan (or related trust) of the Company or suchcorporation resulting from the Business Combination)beneficially owns, directly or indirectly, 35% or more of,respectively, the then outstanding shares of common stock of thecorporation resulting from such Business Combination or thecombined voting power of the then outstanding voting securitiesof such corporation except to the extent that such ownershipexisted prior to the Business Combination; and (c) at least amajority of the members of the board of directors of thecorporation resulting from such Business Combination weremembers of the Incumbent Board immediately prior to the time ofthe execution of the initial agreement, or of the action of theBoard of Directors of the Company, providing for such BusinessCombination; or  (4) Approval by the stockholders ofthe Company of a complete liquidation or dissolution of theCompany.
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 **(G)** **Good Reason.**Executive will be deemed to haveterminated his employment for “Good Reason” if he tenders hisresignation to the Company following the occurrence of any one or moreof the following, without Executive’s prior written consent and theExecutive have not entered into a written agreement that replaces thisAgreement: (i) Executive is not reelected to or is removed as Chairmanof the Company; (ii) the Company fails to vest Executive with orremoves from him the duties, responsibilities, authority or resourcesthat he reasonably needs to competently perform his duties as Chairmanof the Company; (iii) the Company changes the primary location ofExecutive’s employment to a place that is more than 50 miles fromSouthfield, Michigan; or (iv) the Company otherwise commits a materialbreach of its obligations under this Agreement and fails to cure thebreach within 30 days after Executive gives the Company written noticeof the breach.     **4. Other Benefits**. The Executive shall also be entitled to such additional benefits asoutlined 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 thisAgreement (the “Employment Term”) shall commence on January 1, 2006 and terminate on December 31,2008, or such earlier date upon the occurrence of any of the following events: (A) the death or retirement of the Executive;  (B) the date on which the Company discharges the Executive byreason of the Executive’s Total Disability. For purposes of this Agreement,“Total Disability” shall have the same meaning as used in the Manual andconsistent with the Long Term Disability Benefits of the Company;  (C) a mutual written agreement between the Company and theExecutive regarding an early termination date; or  (D) the date on which the Company terminates the Executive’semployment for Cause as recited in Section 3(E)(3).In the event this Agreement terminates because of the Executive’s death, the Company agrees to paythe Executive’s estate or his designee, 50% of the Executive’s Base Salary for the months remainingin the Employment Term. This payment shall be made in accordance with the normal payroll practicesof the Company then in effect.
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     **6. Confidential Information Agreement**. Executive agrees that the Confidential InformationAgreement executed by him and dated March 12, 1975 (the “Confidential Information Agreement”),which includes, not by way of limitation, covenants not to compete with the Company and covenantsto refrain from soliciting employees to leave the Company’s employment, shall remain in full forceand effect.     **7. Covenant not to Compete or Solicit Employees**. In the event severance becomes payable toExecutive following a Change in Control, Executive agrees to the restrictive covenants of thisSection: (A) Executive agrees that, for two (2) years following thetermination of Executive’s employment under circumstances described in Section3(E)(2), he will not, without the Company’s prior written consent, directly orindirectly Compete with the Company or any of its subsidiaries. For thepurposes of Section 7(A): (1) “Compete” means directly orindirectly owning, managing or operating a Competitor, whichsolicits or obtains business of the Company, or directly orindirectly serving as an employee, officer or director of or aconsultant to a Competitor which solicits or obtains business ofthe Company, or soliciting or inducing any employee or agent ofthe Company to terminate employment with the Company or any ofits subsidiaries and become employed by a Competitor.  (2) “Competitor” means any person,firm, partnership, corporation, trust or other entity that owns,controls or is an insurance company or a or similar financialservices company (a “Financial Services Company”). (B) In the event that a successor to the Companysucceeds to or assumes the Company’s rights and obligations under thisAgreement, Section 7(A) will apply only to the Company as it existedimmediately before the succession or assumption occurred and will notapply to any of the successor’s other offices.  (C) Section 7(A) will not prohibit Executive fromdirectly or indirectly owning or acquiring any capital stock or similarsecurities that are listed on a securities exchange or quoted on theNasdaq or NYSE and do not represent more than 5% of the outstandingcapital stock of any Financial Services Company.  (D) Executive agrees that a violation of thisSection 7 would result in direct, immediate and irreparable harm to theCompany, and
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   in such event, agrees that the Company, in addition to their otherrights and remedies, would be entitled to injunctive reliefenforcing the terms and provisions of this Section 7 and a returnto the Company of any severance payments under Section 3(E)(2).The terms of this Section are intended to be in addition to anyrestrictions contained in the Confidential Information Agreement.     **8. Binding Effect; Assignment**. The Company may assign this Agreement to any of its affiliatesor their successors or assigns. This Agreement shall be binding upon and shall inure to the benefitof the Company, its affiliates and their successors and assigns. This Agreement shall be bindingupon and shall inure to the benefit of the Executive. Neither this Agreement nor any right orinterest hereunder shall be assignable or transferable by the Executive, his beneficiaries or legalrepresentatives.     **9. Miscellaneous**. No provision of this Agreement may be modified, waived or discharged unlesssuch waiver, modification or discharge is agreed to in writing and signed by the Executive and theCompany. 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 otherparty shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or atany or subsequent time. 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 expresslyset forth in this Agreement. This Agreement shall supersede the Executive’s Employment Agreement(including the Amendment dated April 1, 2005) dated January 1, 2004.     **10. Notices**. All notices or other communications required or permitted hereunder shall begiven in writing and shall be deemed sufficient if delivered by hand (including by courier), mailedby registered or certified mail, postage prepaid (return receipt requested), or sent by facsimiletransmission, as follows:   If to the Executive: If to the Company:   To the address on file MEADOWBROOK, INCwith the Company’s Attn: Human ResourcesHuman Resources 26600 Telegraph Road, Suite 300Department as the Southfield, MI 48034Executive’s home address.  or such other address as shall be furnished in writing by such party, and any such notice orcommunication 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 ofthe 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 anycircumstance, is invalid, in whole or in part, such provision or application shall to that extentbe 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 thelaws of the State of Michigan, excluding any choice of law rule requiring application of the law orany 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 ofMichigan.     **13. Entire Agreement**. This Agreement and the Confidential Information Agreement, which isincorporated herein by reference, sets forth the entire understanding of the parties hereto withrespect to the subject matter hereof and supersedes all prior and contemporaneous agreements,written or oral, between them as to such subject matter.     **14. Headings**. The headings contained herein are solely for the purpose of reference, are notpart of this Agreement and shall not in any way affect the meaning or interpretation of thisAgreement.     **IN WITNESS WHEREOF**, the parties have caused this Agreement to be duly executed on this3rd day of March, 2006.      MEADOWBROOK INSURANCE GROUP, INC.