CONSULTING AGREEMENT
Exhibit 10.1
This Consulting Agreement (hereinafter referred to as the “Agreement”) is effective October,
1, 2008, by and among Meadowbrook Insurance Group, Inc. (“Meadowbrook”), Meadowbrook, Inc.,
(hereinafter referred to as the “Company”), and Xxxxxx X. Xxxxx (hereinafter referred to as the
“Consultant”).
RECITALS:
WHEREAS, the Company and the Consultant desire to set forth their respective rights and
obligations in connection with the certain consulting services of the Consultant;
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. Retention. The Company agrees to retain the Consultant during the Term (as such term is
hereinafter defined in Section 5 below) and the Consultant hereby accepts such engagement by the
Company, subject to the terms and conditions hereinafter set forth herein. This Agreement
establishes the terms of Consultant’s retention and any payment(s) to which the Consultant is
entitled during the Term. The Company and the Consultant retain the right to terminate this
Agreement for the reasons described in Section 5 below.
2. Responsibilities and Duties. The Consultant shall be retained as a consultant with such
responsibilities and duties as prescribed by the President & Chief Executive Officer of the
Company. These duties may include services, which are intended to assist the Company with the
development, creation and maintenance of the following; (1) agent relationships between the Company
and its agency-force relating to the Company’s insurance programs; (2) client relationships of the
Company’s agency division relating to life, annuities, health, property, automobile and general
liability insurance; (3) fee for service relationships of the Company relating to the providing of
marketing, underwriting, loss control and claims services; and (4) new programs, products, agent
relationships and clients for the Company’s agency division(s). In addition, the Consultant will
assist the Company with the supervision of the Company’s investment advisor and compliance with the
Company’s Investment Policy Guidelines. The Consultant may attend designated seminars relating to
investment strategies for insurance companies. The Consultant may assist the Company with
development and maintenance of the Company’s brand and market identity, as well as represent it at
designated insurance industry conference(s).
3. Compensation. In consideration of the performance of such services by the Consultant, the
Company will pay the Consultant the following:
(A) | Consulting Fee. The Consulting Fee (the ”Fee”) shall be as follows: (1) For the period October 1, 2008 – September 30, 2009, Consultant shall be |
receive a Fee of $266,000; (2) For the period of October 1, 2009 – September 30, 2010, Consultant shall receive a Fee of $216,000; and (3) For the period of October 1, 2010 – September 30, 2011, Consultant shall receive a Fee of $166,000. The Fee shall be paid in monthly installments and in advance. |
4. Other Benefits. The Consultant shall not be entitled to any other benefits of the Company
during the Term. Consultant shall provide his own health, dental, life, disability, workers
compensation and other similar type benefits.
5. Consulting Term. The period of the Consultant’s retention by the Company under this
Agreement (the “Term”) shall commence on October 1, 2008 and terminate on September 30, 2011, or
such earlier date upon the occurrence of any of the following events:
(A) | the death or retirement of the Consultant; | ||
(B) | the Consultant’s Disability. For purposes of this Agreement, “Disability” shall mean a physical or mental condition of the Consultant that prevents him from performing the consulting services described above as determined by the President & CEO and the Board of Directors of the Company. | ||
(C) | a mutual written agreement between the Company and the Consultant agreeing to an early termination date; or | ||
(D) | termination of this Agreement by the President & CEO and Board of Directors of the Company for “Cause,” which shall mean: (1) fraud, malfeasance or willful misconduct on the part of the Consultant; (2) violation of Section 7 of this Agreement; (3) conduct by the Consultant that would be materially injurious to the Company; or (4) revocation, suspension, or termination of the Consultant’s insurance license. |
In the event this Agreement terminates for any of the reasons set forth in Section 5(A) – (D), the
Consultant shall only be paid the Fee through the date of his death, retirement, Disability, the
date this Agreement is terminated for Cause or the date this Agreement is terminated by mutual
written agreement of parties.
6. Confidential Information Agreement. Consultant agrees the Confidential Information
Agreement executed by him and dated March 12, 1975 and re-affirmed in his former Employment
Agreement, dated January 1, 2006 (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.
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7. Covenant not to Compete or Solicit Employees. During the Term of this Agreement and for a
period of two (2) years following its termination or expiration, the Consultant agrees to the
following:
(A) | Consultant agrees that he shall 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 7(A): |
(1) “Compete” means directly or indirectly owning, controlling,
operating managing, working for or consulting with, an insurance
agency, insurance company or third-party administrator. , which
solicits or obtains business of or from the Company during the
Term of this Agreement and for a period of two (2) years following
its expiration or termination;, or soliciting or inducing any
employee, or agent of the Company to terminate employment or
appointment with the Company or any of its subsidiaries and become
employed or appointed by a Competitor.
(2) 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.
(3) Section 7(A) will not prohibit Consultant from directly or
indirectly owning or acquiring any capital stock or similar
securities that are listed on a securities exchange or quoted on
the Nasdaq or NYSE and do not represent more than 5% of the
outstanding capital stock of any Financial Services Company.
(B) | Consultant agrees that a violation of this Section 7 may result in direct, immediate and irreparable harm to the Company, and in such event, agrees that the Company, in addition to their other rights and remedies, would be entitled to injunctive relief enforcing the terms and provisions of this Section 7. The Company shall be entitled to stop any payments that are or may become due under this Agreement to the Consultant in the event he violates this Section of the Agreement as determined by the President & CEO and Board of Directors of the Company. 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. This Agreement shall
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be binding upon and shall inure to the benefit of the Consultant. Neither this Agreement nor
any right or interest hereunder shall be assignable or transferable by the Consultant.
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 Consultant and the
Company. 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 expressly set forth in this
Agreement. Consultant shall have use of an office similar to his current office and administrative
assistance as needed during the Term.
10. Other Agreements. Effective September 30, 2008, the Employment Agreement dated January 1,
2006 between the Consultant, the Company and Meadowbrook shall be terminated, except for those
provisions that survive termination. All amounts or benefits due the Consultant under the
Employment Agreement shall terminate effective September 30, 2008 with the exception of the
following three (3) items: (1) the Consultant’s right to elect and pay for health and dental
continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”); and (2) the Consultant shall remain eligible to participate in Company’s Discretionary
Bonus Plan for 2008 and the Company’s Long Term Incentive Plan for 2007 and 2008.
11. 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 Consultant:
To the address on file at the Company
If to the Company:
MEADOWBROOK, INC.
Attn: General Counsel
00000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: General Counsel
00000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
If to Meadowbrook:
MEADOWBROOK INSURANCE GROUP, INC.
Attn: General Counsel
00000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: General Counsel
00000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
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.
12. 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.
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13. 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.
14. 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.
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 as of the 1st
day of October, 2008.
MEADOWBROOK, INC. | ||||
/s/ Xxxxxx X. Xxxxxx | ||||
By: Xxxxxx X. Xxxxxx | ||||
Its: President | ||||
MEADOWBROOK INSURANCE GROUP, INC. | ||||
/s/ Xxxxxx X. Xxxxxx | ||||
By: Xxxxxx X. Xxxxxx | ||||
Its: President |
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the 1st
day of October, 2008.
CONSULTANT | ||||
/s/ Xxxxxx X. Xxxxx | ||||
Xxxxxx X. Xxxxx |
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