EXHIBIT 10

STANDSTILL AGREEMENT

     THIS STANDSTILL AGREEMENT (“Agreement”), dated the 7th day of April 2004,
is made by and between American Physicians Capital, Inc., a Michigan corporation
(“ACAP”), and Daniel L. Gorman (“Gorman”).

     WHEREAS, ACAP and Gorman have agreed that it is in their mutual interests
to enter into this Agreement as hereinafter described.

     NOW, THEREFORE, in consideration of the premises and the representations,
warranties, and agreements contained herein, and other good and valuable
consideration, the parties hereto mutually agree as follows:

     1. Representations and Warranties of Gorman. Gorman hereby represents and
warrants to ACAP as follows:

     a. Gorman has beneficial ownership of 193,638 shares of common stock of
ACAP and has full and complete authority to enter into this Agreement and to
bind the entire number of shares of the common stock of ACAP which he holds, or
may hold, including any shares purchased or otherwise acquired in the future, to
the terms of this Agreement. This Agreement constitutes a valid and binding
agreement of Gorman. No “affiliate” or “associate” (as such terms are defined
for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) of Gorman beneficially owns any shares or rights to acquire shares of
common stock of ACAP, other than Gorman’s spouse, who owns 10,500 of the shares
of common stock beneficially owned by Gorman.

     b. There are no arrangements, agreements or understandings between Gorman
and ACAP other than as set forth in this Agreement.

     c. No event has occurred with respect to Gorman that would require
disclosure in an ACAP report or other document filed pursuant to the Securities
Act of 1933, as amended, or the Exchange Act, pursuant to Item 401(f) of
Regulation S-K.

     2. Representations and Warranties of ACAP. ACAP hereby represents and
warrants to Gorman, as follows:

     a. ACAP has full power and authority to enter into and perform its
obligations under this Agreement, and the execution and delivery of this
Agreement by ACAP has been duly authorized by the Board of Directors of ACAP
(the “Board”) and requires no further Board of Directors or shareholder action.
This Agreement constitutes a valid and binding obligation of ACAP and the
performance of its terms does not constitute a violation of its articles of
incorporation or bylaws.

     b. There are no arrangements, agreements or understandings between Gorman
and ACAP other than as set forth in this Agreement.

 

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     3. Gorman’s Prohibited Conduct. Gorman will not, and will cause his
affiliates or associates not to, directly or indirectly,

     a. solicit (as such term is used in the proxy rules of the Securities and
Exchange Commission) proxies or consents, or participate in any manner in the
solicitation of proxies or consents, from ACAP’s shareholders to elect persons
to the Board (or withhold votes from nominees to the Board) or to approve
shareholder proposals or otherwise communicate with ACAP’s shareholders pursuant
to Rule 14a-1(l)(2) or Rule 14a-2 under the Exchange Act,

     b. make any public statement critical of ACAP, its Directors or management,

     c. initiate any litigation against ACAP or any of its Directors, officers,
employees or agents, except to enforce the terms of this Agreement,

     d. make or be the proponent of any shareholder proposal, whether pursuant
to Rule 14a-8 of the Exchange Act or otherwise,

     e. acquire, offer or propose to acquire, or agree to acquire (except, in
any case, by way of stock dividends or other distributions or offerings made
available to holders of ACAP common stock generally), directly or indirectly, or
retain ownership of any ACAP common stock, if when taken together with the ACAP
common stock beneficially owned by Gorman would constitute more than 5% of the
then outstanding shares of ACAP; provided, however, that in the event that
Gorman’s beneficial ownership exceeds such percentage as a result of stock
repurchases by ACAP, Gorman shall, reasonably promptly after becoming aware of
such situation, dispose of a sufficient number of shares such that the ACAP
common stock beneficially owned by Gorman does not constitute more than such
percentage, and provided further, that “beneficial ownership” shall have the
meaning ascribed thereto under Section 13(d) of the Exchange Act,

     f. make any proposal or offer involving, or propose to enter into, or
assist or encourage any other person with respect to, directly or indirectly,
any merger, consolidation, business combination, tender or exchange offer, sale
or purchase of assets, sale or purchase of securities, dissolution, liquidation,
restructuring, recapitalization or similar transactions of or involving ACAP;
provided that nothing herein shall limit Gorman’s ability to discuss with the
Directors through non-public communications (which may, but need not, be at a
meeting of the Board), to propose as a Director that the Board consider any of
the foregoing types of transactions and to vote as a Director at a meeting of
the Board upon any such transaction,

     g. form, join or in any way participate in any “group” (within the meaning
of Section 13(d)(3) of the Exchange Act) with respect to ACAP common stock,

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     h. deposit any ACAP common stock in any voting trust or subject any ACAP
common stock to any arrangement or agreement with respect to the voting of any
ACAP common stock,

     i. execute any written consent as a shareholder with respect to ACAP or its
common stock, except as set forth herein,

     j. otherwise act, alone or in concert with others, to control or seek to
control or influence or seek to influence the shareholders, management, the
Board or policies of ACAP, other than through non-public communications with the
directors of ACAP (which may, but need not, be at a meeting of the Board);
provided, that, subject to clause (f) above, nothing herein shall limit Gorman
from acting in his capacity as a Director of ACAP in accordance with his
fiduciary duties at any meeting of the Board,

     k. seek, alone or in concert with others, (i) to call a meeting of
shareholders, (ii) representation on the Board of ACAP or its subsidiaries,
except as set forth herein, or (iii) the removal of any member of the ACAP Board
or any of its subsidiaries,

     l. make any proposal regarding any of the foregoing,

     m. make or disclose any request to amend, waive or terminate any provision
of this Agreement, or

     n. take or seek to take, or cause or seek to cause others to take, directly
or indirectly, any action inconsistent with any of the foregoing.

     4. Gorman’s Affirmative Conduct.

     a. At all meetings of shareholders, Gorman shall vote, or cause to be
voted, all of the shares of ACAP common stock beneficially owned by him for each
of ACAP’s nominees for election to the Board, for the ratification of the
appointment of ACAP’s independent auditors and, in other matters, in accordance
with the recommendation of the Board, or, if so directed by the Board, pro rata
with all other shareholders. Gorman shall, if requested by ACAP, publicly
support the election of each of ACAP’s nominees for election to the Board.

     b. Upon execution of this Agreement by all the parties hereto, Gorman
hereby irrevocably withdraws (i) his Notice of Intent to Nominate dated January
8 and January 19, 2004, (ii) his Demand for Stock Ledger, Stockholder List and
Books and Records dated February 26, 2004 and all subsequent related requests,
and (iii) his preliminary proxy statement and form of proxy filed with the
Securities and Exchange Commission on March 26, 2004. Gorman will inform the SEC
staff no later than the date of this Agreement that he is withdrawing his
preliminary proxy statement and form of proxy and that he does not intend to
solicit proxies for ACAP’s 2004 Annual Meeting of Shareholders, and shall take
any such action as the SEC staff may request to effectuate such withdrawal.

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     c. Gorman shall comply with all corporate and Board policies and principles
of ACAP in force from time to time and applicable to Directors of ACAP
generally.

     5. Directorship. ACAP agrees that subject to the full execution of this
Agreement, ACAP’s receipt of a written reaffirmation of Gorman’s consent to
serve as a Director and Gorman’s performance of his obligations in the last
sentence of paragraph 4(b) of this Agreement, Gorman will be nominated for
election to the Board at ACAP’s 2004 Annual Meeting of Shareholders as part of
the class of Directors of ACAP whose terms expire at the 2007 Annual Meeting of
Shareholders.

     a. ACAP agrees to take any necessary Board action to enable Gorman to sit
on the Board, including expanding the number of Directors on the Board.

     b. Gorman will be entitled to receive the identical compensation and
benefits being paid to the other non-employee Directors of ACAP.

     c. Gorman will not accept any incentive or compensation that would
influence Gorman to recommend that ACAP enter into a transaction for the sale of
ACAP or to recommend any other significant initiative affecting ACAP and its
shareholders.

     6. Litigation. ACAP will not, directly or indirectly, initiate any
litigation against Gorman, except to enforce the terms of this Agreement.

     7. Dispositions. Gorman agrees that any disposition of shares of common
stock of ACAP (including any dispositions pursuant to paragraph 3e above) will
be made in open market transactions in a manner designed to effect an orderly
disposition of such shares. Gorman further agrees that he will not transfer or
dispose of any shares of ACAP common stock if, as a result of such disposition
or transfer, to the knowledge of Gorman, the person making such acquisition will
beneficially own, together with its affiliates and any member of a “group”
(within the meaning of the Exchange Act) in which such acquirer is a party,
immediately following such acquisition 5% or more of the ACAP common stock then
outstanding.

     8. Certification of Ownership. Gorman shall, upon request of ACAP, certify
to ACAP as to the amount of shares he beneficially owns.

     9. Termination. This Agreement shall terminate and Gorman shall immediately
tender his resignation from the Board of ACAP, following the vote of a majority
of ACAP directors other than Gorman in favor of such resignation, upon the
earlier of (i) Gorman having beneficial ownership of less than one percent of
the outstanding shares of common stock of ACAP; (ii) any person becoming the
beneficial owner of more than 50% of ACAP’s voting stock, including any merger,
acquisition or other type of business combination, or (iii) the third
anniversary of the execution of this Agreement. This Agreement shall not
otherwise be terminated without the written consent of all of the parties.

     10. Public Announcement. ACAP shall promptly disclose the existence of this
Agreement after its execution pursuant to a press release substantially in the
form annexed hereto

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as Attachment A; however, neither party shall disclose the existence of this
Agreement until the press release is issued, other than to the staff of the SEC
in connection with the withdrawal of Gorman’s preliminary proxy materials in
accordance with this Agreement.

     11. Nonpublic Information.

     a. In connection with discussions between Gorman and his representatives
and ACAP and its representatives, ACAP or its representatives may disclose to
Gorman or his representatives information which is confidential to ACAP. To
protect the confidentiality of such information, and as a condition to the
furnishing of such information, Gorman agrees, as set forth below, to treat
confidentially all such information furnished to or otherwise received by Gorman
or his representatives from ACAP or on its behalf (herein collectively referred
to as the “Confidential Information”). For purposes of this Agreement, the
phrase “Confidential Information” shall not include information which
(i) becomes lawfully available to the public other than as a result of a
disclosure by Gorman or his representatives, (ii) was lawfully available to
Gorman on a nonconfidential basis prior to its disclosure to Gorman or his
representatives by ACAP or on its behalf or (iii) lawfully becomes available to
Gorman on a nonconfidential basis from a source other than ACAP or ACAP’s
representatives or agents, provided that such source is not bound by a
confidentiality agreement with ACAP of which Gorman has been made aware. ACAP
has no obligation to furnish Confidential Information to Gorman or his
representatives by virtue of this Agreement. The Confidential Information will
not be disclosed by Gorman or his representatives except to the extent ACAP has
given its prior written consent.

     b. In connection with this Agreement and Gorman’s ongoing relationship with
ACAP, there may be instances in which material nonpublic information concerning
ACAP will be divulged to Gorman by ACAP or its representatives or agents. Gorman
expressly acknowledges, on behalf of himself and his representatives and agents,
that federal and state securities laws prohibit any person who misappropriates
material nonpublic information about a company from purchasing or selling
securities of such company, or from communicating such information to any other
person under circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell such securities. Gorman acknowledges that
he will be subject to ACAP’s insider trading and disclosure policies, as in
effect from time to time, at any time while he is on the Board to the same
extent as the other Directors of ACAP. To the extent SEC Regulation FD may
apply, in accordance with Section 243.100(2)(ii) of Regulation FD, Gorman
expressly agrees to maintain material nonpublic information concerning ACAP in
confidence.

     12. Remedies. ACAP and Gorman acknowledge and agree that a breach or
threatened breach by either party may give rise to irreparable injury
inadequately compensable in damages, and accordingly each party shall be
entitled to injunctive relief to prevent a breach of the provisions hereof and
to enforce specifically the terms and provisions hereof in any state or federal
court having jurisdiction, in addition to any other remedy to which such
aggrieved party may be entitled to at law or in equity. In the event either
party institutes any legal action to enforce such party’s rights under, or
recover damages for breach of, this Agreement, the prevailing party or parties
in such action shall be entitled to recover from the other party or parties all
costs and expenses, including but not limited to reasonable attorneys’ fees,
court costs,

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witness fees, disbursements and any other expenses of litigation or negotiation
incurred by such prevailing party or parties.

     13. Notices. All notice requirements and other communications shall be
deemed given when delivered personally or by fax, or on the following business
day after being sent by overnight courier with a nationally recognized courier
service such as Federal Express, addressed to Gorman and ACAP as follows:

         

  ACAP:    

      Mr. R. Kevin Clinton

      President and Chief Executive Officer

      1301 North Hagadorn Road

      East Lansing, Michigan 48823

      Fax: 517-351-7866

       

  With a copy to:    

      Lori M. Silsbury, Esq.

      Dykema Gossett PLLC

      124 W. Allegan, Suite 800

      Lansing, Michigan 48933

      Fax: 517-374-9191

       

  Gorman:    

      Mr. Daniel L. Gorman

      71 State Street

      Binghamton, New York 13901

      Fax: 607-723-0634

       

  With a copy to:    

      Phillip Goldberg, Esq.

      Foley & Lardner LLP

      321 North Clark Street, Suite 2800

      Chicago, Illinois 60610

      Fax: 312-832-4700

     14. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions of the parties in connection therewith not referred
to herein.

     15. Counterparts; Facsimile. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, and
signature pages may be delivered by facsimile, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

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     16. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

     17. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Michigan, without regard to
choice of law principles that would compel the application of the laws of any
other jurisdiction.

     18. Severability. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.

     19. Successors and Assigns. This Agreement shall not be assignable by any
of the parties to this Agreement. This Agreement, however, shall be binding on
successors of the parties hereto.

     20. Survival of Representations, Warranties and Agreements. All
representations, warranties, covenants and agreements made herein shall survive
the execution and delivery of this Agreement.

     21. Amendments. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by all of the parties hereto.

     22. Further Action. Each party agrees to execute any and all documents, and
to do and perform any and all acts and things necessary or proper to effectuate
or further evidence the terms and provisions of this Agreement.

     23. Consent to Jurisdiction. Each of the parties hereby irrevocably submits
to the exclusive jurisdiction of any United States Federal or state court
sitting in the State of Michigan in any action or proceeding arising out of or
relating to this Agreement and each of the parties hereby irrevocably agrees
that all claims in respect of such action or proceeding may be heard and
determined in any such court.

     24. Expenses. Each party agrees to bear its own expenses in connection with
the transactions contemplated hereby; provided, however, that ACAP agrees to
reimburse Gorman for out-of-pocket expenses reasonably incurred by him through
the date of this Agreement in connection with his proposed solicitation of
proxies at the 2004 Annual Meeting of Shareholders, including but not limited to
reasonable attorneys’ fees, SEC filing expenses, proxy solicitor fees and other
related costs up to a maximum aggregate amount of $17,500. Such reimbursement
shall be made promptly following presentation of reasonable documentation to
ACAP of such expenses and Gorman’s payment thereof.

[Remainder of Page Intentionally Left Blank]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

     
AMERICAN PHYSICIANS CAPITAL, INC.
  /s/ Daniel L. Gorman

 

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  Daniel. L. Gorman
/s/ R. Kevin Clinton
   

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R. Kevin Clinton
   
President and CEO
   

 

 

 

 

 

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Attachment A

         
For Immediate Release
  Contacts:   Ann Storberg, Investor Relations

      (517) 324-6629

AMERICAN PHYSICIANS CAPITAL, INC. EXECUTES
STANDSTILL AGREEMENT

     East Lansing, Michigan (April 8, 2004) — American Physicians Capital, Inc.
(NASDAQ: ACAP) has entered into an agreement with Daniel L. Gorman, a
shareholder of the Company who filed preliminary proxy materials announcing
plans to solicit proxies to elect himself to the Company’s Board. Pursuant to
the agreement, Gorman is being nominated by the Company for election to the
Company’s Board at the Company’s 2004 annual meeting for a three-year term.
Gorman has agreed to a three-year “standstill” and will support the Board’s
slate of nominees at the 2004 annual meeting and during the term of the
standstill agreement.

Corporate Description

American Physicians Capital, Inc. is a regional provider of medical professional
liability coverage through American Physicians Assurance Corporation and its
other subsidiaries. Further information about the companies is available on the
Internet at www.apcapital.com.

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