EX-10.3






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.




 









 












	 	(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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