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”).
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:
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:
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(A)
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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)
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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:
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(1)
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Corporate Goals (Profit, ROE,
etc);
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(2)
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Profit Center Goals; and
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(3)
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Personal Goals and
Objectives.
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The Company
shall annually review and establish the Discretionary Bonus target
and/or the bonus formula described in
Section 3(B)(1)-(3).
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(C)
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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.
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(D)
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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.
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(E)
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Severance .
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(1)
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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:
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(i)
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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.
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(ii)
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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.
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(iii)
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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.
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(2)
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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:
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(i)
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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.
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(ii)
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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.
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(iii)
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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.
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(3)
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For Cause Termination
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(i)
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For
purposes of this Agreement, “Cause” shall
mean:
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(a)
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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;
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(b)
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misconduct by the Executive that is
materially injurious to the Company; or
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(c)
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the
Executive engaging in dishonest activities injurious to the
Company.
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(ii)
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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.
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(iii)
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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
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