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                                                                    EXHIBIT 10.7

                         EXECUTIVE EMPLOYMENT AGREEMENT

THIS AGREEMENT, dated June 2, 2003 by and between American Physicians Assurance
Corporation, a Michigan corporation having a principal place of business in East
Lansing, Michigan, its successors, assigns, affiliates, and related companies
(the "Company") and Thomas Chase (the "Executive").

WHEREAS, the Executive currently serves as the Chief Information Officer of
APCapital;

WHEREAS, the Company desires to obtain the Executive's agreement to continue to
serve as Chief Information Officer of the Company, and to obtain certain
restrictions on the Executive's potential competition with the Company during
the term of the Executive's employment and when and if Executive's employment
with the Company terminates; and

WHEREAS, the Company desires to employ the Executive in accordance with the
terms and conditions of this Agreement and Executive desires to be so employed
by the Company.

NOW, THEREFORE, in consideration of the mutual covenants and promises and other
valuable consideration, contained herein, the parties hereto hereby agree as
follows:

1.   EMPLOYMENT.
     The Company employs the Executive to render services as Chief Information
     Officer of APCapital, the Executive accepts such employment, in accordance
     with the terms, and conditions hereinafter set forth. This Agreement
     supersedes and replaces in its entirety any prior or contemporaneous
     employment agreements or understandings between the Company, its present or
     former affiliates or subsidiaries, and the Executive.

2.   PLACE OF EMPLOYMENT.
     The Executive shall be located, and shall render such services (subject to
     necessary and appropriate business related travel), at the Company's office
     in East Lansing, Michigan. The Company may relocate Executive, subject to
     Executive's rights under Sections 6(d) involuntary termination and Section
     6(e) following a Change in Control.

3.   TERM.
     The term of the Executive's employment with the Company shall be for a
     period commencing on date signed and continue, unless terminated sooner
     under Section 6, for a period of one (1) year. Thereafter, the term shall
     automatically be extended for one (1) additional day for each successive
     day of the Executive's employment with the Company unless replaced, or
     unless terminated in accordance with Section 6, below.

4.   DUTIES AND RESPONSIBILITIES.
     (a) At the commencement of this Agreement, the Executive is employed by
         the Company in the position of Chief Information Officer of APCapital.
         As such, the Executive shall have duties and such authorities as are
         consistent with such position subject to the direction of the President
         and Chief Executive Officer (CEO) and the Board of Directors of
         American Physicians Capital, Inc. ("ACAP"), the parent company of
         American Physicians Assurance Corporation. The Company may change or
         amend the duties of the Executive from time to time to other duties or
         positions at a



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     (b) comparable level.  References in this Agreement to the "Board" shall be
         understood as references to the ACAP Board.

     (c) The Executive will devote exclusively his or her best efforts and full
         working time to the performance of the duties of the Executive's?
         position and will not engage in any other employment during the term of
         this agreement except that with the prior approval of the Board the
         Executive may serve as a compensated member of the board of directors
         of other, "for profit" unaffiliated corporations.

5.   COMPENSATION, INCENTIVE COMPENSATION & BENEFITS.
     In consideration for the services of the Executive to be performed
     hereunder, the Company shall compensate the Executive as follows:

     (a) ANNUAL BASE SALARY. The Company shall pay to the Executive a minimum
         annual base salary of $185,000, payable (less applicable taxes) in
         accordance with Company normal payroll practices. Under no
         circumstances shall the Executive's base salary be reduced during the
         term of this Agreement. The Executive's base salary shall be
         periodically reviewed by the Compensation Committee of the ACAP Board
         and may be increased as deemed warranted by the Compensation Committee.

     (b) INCENTIVE COMPENSATION. The Executive will be eligible to participate
         in any short-term incentive plan adopted for senior executive staff.
         The Executive will also be eligible to participate in long-term
         incentive plans available to other senior executive employees.

     (c) DISABILITY INSURANCE. During employment, the Company shall maintain, at
         its expense, an individual long-term disability insurance policy
         ("Policy") for the Executive providing the Executive with benefits in
         the event of a disability as such term is defined in the Policy (a
         "Disability"), provided the Executive satisfies the eligibility
         requirements for coverage under the disability insurance Policy which
         the Company has chosen for its executive staff.

     (d) PAID TIME OFF. The Executive shall be entitled to not less than 4 weeks
         of vacation and 10 days of occasional sick days during each calendar
         year.

     (e) OTHER EMPLOYMENT BENEFITS. During employment, the Executive shall have
         the opportunity to participate in and shall be entitled to receive
         benefits in accordance with, the provisions of any health, life
         insurance, disability, deferred compensation, profit sharing or other
         employee benefit plan or plans adopted, or to be adopted, by the
         Company and which are generally applicable to other similarly situated
         senior executive employees of the Company.

     (f) BUSINESS EXPENSES. The Company shall pay or reimburse the Executive
         promptly, upon presentation of appropriate vouchers, for all necessary
         business travel and entertainment expenses reasonably incurred by the
         Executive in connection with Company? business in accordance with
         Company policy.

6.   TERMINATION.
     Subject to the terms and conditions of this Agreement, the Company or the
     Executive may terminate the Executive's ?employment as provided below, and
     such termination shall not be deemed a breach of this Agreement.

     (a) DEATH OR DISABILITY. The Executive? employment shall terminate upon the
         Executives' death or Disability. Disability is defined as meeting the
         requirements for benefits under the long-term




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         Disability Insurance Policy provided by the Company for the Executive.
         If the Executive qualifies or may qualify for disability benefits under
         the Policy, Executive agrees to apply for such benefits in a timely
         basis and submit any necessary medical and other information. If the
         Executive is not covered by the Policy or is not entitled to disability
         benefits under the Policy, the Company may determine that the Executive
         is disabled and terminate the Executive's employment by treating it as
         an Involuntary Termination under Section 6(d) of this Agreement.

     (b) CAUSE. The Company may terminate the Executive's employment under this
         Agreement for Cause. The Executive shall be given written notice of
         termination, specifying with particularity the basis for termination;
         and the Executive shall not in such case have to be given an
         opportunity to cure the basis for such Cause. For the purposes of this
         Agreement, the Company shall have Cause upon: (A) the commission by the
         Executive of dishonesty, or for intentional commission of a wrongful or
         illegal act, (B) or for the willful and continued breach of this
         Agreement, or failure to perform the duties of the Executive's position
         in a competent and conscientious manner (other than as a result of
         incapacity due to physical or mental injury or illness). (C) The
         failure of the Executive to comply with the policies or procedures of
         the Company.

     (c) VOLUNTARY RESIGNATION. The Executive may terminate his or her
         employment for any reason whatsoever.

     (d) INVOLUNTARY TERMINATION. The Company may terminate the Executive's
         employment at any time for any reason or no reason. A termination under
         Section 6(a), (b) or (e) will not be considered an Involuntary
         Termination. For the purpose of this Agreement, Involuntary Termination
         includes, but is not limited to, , the termination of this agreement by
         the Company, a permanent relocation of the Executive's duties that
         would require the Executive to commute a distance of more than 90 miles
         further from the Executive's principal place of employment (the
         Executive shall have 60 days from the notification date of relocation
         to accept or decline continued employment), the resignation of
         Executive within 60 days after an act by the Company which materially
         reduces the Executive's duties and responsibilities. The Executive's
         duties and responsibilities shall not be deemed materially reduced
         solely by virtue of a change in reporting relationship between the
         Executive and the Company.

     (e) CHANGE IN CONTROL. At anytime within one (1) year following the date in
         which a Change in Control shall have occurred, the Board may terminate
         the Executive's employment for any reason whatsoever, or the Executive
         may terminate his Term of employment for Qualifying Reasons as set
         forth below.

         For purposes of this Agreement, a Change in Control means any one of
         the following events:

          (1)    The sale by American Physicians Capital, Inc. ("ACAP") of all
                 or substantially all of its assets to a single purchaser or
                 group of associated purchasers;

          (2)    The sale, exchange or other disposition of ACAP, in one
                 transaction to any entity or entities not affiliated with ACAP,
                 of more than fifty percent (50%) of the outstanding common
                 stock of ACAP other than by a sale, exchange, or disposition of
                 the common stock of ACAP resulting from a public or private
                 offering of common stock of which offering is sponsored or
                 initiated by ACAP and approved by its Board;

          (3)    The merger or consolidation of ACAP in a transaction in which
                 the stockholders of ACAP receive less than fifty percent (50%)
                 of the outstanding voting stock of the new or continuing
                 entity;

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          (4)    A change of more than 50% of the directors of the ACAP Board
                 within any 24-month period; except that, a new director elected
                 pursuant to nomination by a majority of the Continuing
                 Directors (as defined below) will not be considered a change of
                 a director for this purpose.

         At any time within one (1) year following the date on which a Change in
         Control shall have occurred, the Executive shall have the right to
         terminate the Executive's employment upon written notice to the Company
         within sixty (60) days following the occurrence of one or more of the
         following Qualifying Reasons. For the purposes of this Agreement
         Qualifying Reason shall mean:

          (1)    The position or responsibilities of the Executive are
                 significantly reduced (including, without limitation, the
                 elimination of such position, a substantial reduction in the
                 size of the Company or other substantial change in the
                 character or scope of the Company's operations), or the
                 Executive is assigned without his or her written consent to any
                 duties which in scope are not comparable with his or her
                 position with the Company immediately prior to such assignment,
                 or the status and stature of those with whom the Executive is
                 asked to work is significantly reduced from the Executive's
                 position immediately preceding the Change in Control;

          (2)    The Company reduces the Executive's then current annual base
                 salary, contrary to Section 5(a), above;

          (3)    The annual incentive compensation opportunity provided to the
                 Executive is eliminated or significantly reduced, the
                 Executive's participation level is reduced or the manner of
                 assessing actual performance is changed in a manner that
                 results in the Executive earning significantly less annual
                 incentive compensation for a given period than he or she would
                 have for the same period absent such change, except if such
                 reduction occurs prior to a Change in Control and is part of an
                 across-the-board reduction in such benefits applicable to all
                 senior level executives of the Company;

          (4)    The Executive's aggregate level of benefits under the Company's
                 benefit plans is significantly reduced, except if such
                 reduction occurs prior to a Change in Control and is part of an
                 across-the-board reduction in such benefits applicable to all
                 senior level executives of the Company;

          (5)    The Company fails to provide the Executive with benefits and
                 perquisites which are substantially equivalent in the aggregate
                 to those to which the Executive is entitled under the Company's
                 benefit plans in which the Executive was participating
                 immediately prior to the Change in Control, or fails to provide
                 the Executive with directors' or officers' insurance, as
                 applicable, at least at the level maintained immediately prior
                 to the Change in Control;

          (6)    The Company permanently changes the geographic location of the
                 performance of the Executive duties that requires the Executive
                 to commute a distance more than 40 miles further from the
                 Executive's principal place of employment existing at the time
                 of the Change in Control;

          (7)    The Company fails to pay the Executive any amount otherwise
                 vested and due hereunder or under any plan or policy of the
                 Company, or fails to comply with any other provision of or
                 perform any of its other obligations under this Agreement.



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     (f) NOTICE OF TERMINATION. Any termination by the Company of the
         Executive's employment pursuant to Section 6(b), (d) or (e) must, in
         order to be effective, be preceded by a written notice to the Executive
         ("Notice of Termination") indicating the specific provision of this
         Agreement relied upon, and for any termination under Section 6(b)
         setting forth in reasonable detail the facts and circumstances
         supporting the termination under the provision so indicated, and the
         Date of Termination. Any termination by the Executive of his active
         employment pursuant to Section 6(e) must, in order to be effective, be
         preceded by a written notice to the Company indicating the specific
         provision of Section 6(e) relied upon and setting forth in reasonable
         detail the facts and circumstances supporting the termination under the
         provision so indicated and the Date of Termination. After receipt of
         such notice, the Company shall have ten (10) business days to
         reasonably remedy the event described therein, upon which such event
         shall no longer constitute "Qualifying Reason" for purposes of this
         Agreement.

     (g) DATE OF TERMINATION. "Date of Termination" shall mean (A) if the
         Executive's employment is terminated by the Executive's death, the date
         of the Executive's death, or by reason of the Executive's Disability,
         the date the conditions to constitute a Disability have occurred, or if
         upon expiration of the Term, the last day of the Term, (B) if the
         Executive's employment is terminated by the Company pursuant to Section
         6(b), 6(d) or 6(e), the date specified in the Notice of Termination,
         and (C) if the Executive's employment is terminated by Executive
         pursuant to Section 6(c) or 6(e) the date which is ten (10) business
         days after the date of receipt of the Executive's notice of intention
         to terminate or such other date as may be agreed by the Executive and
         the Board.

7.   COMPENSATION AND BENEFITS UPON TERMINATION.
     (a) DEATH OR DISABILITY. In the event of the Executive's termination due to
         the Executive's death or Disability while actively employed, the
         Company shall pay or provide to the Executive ??or the Executive's
         named beneficiary (in the event of the Executive's death):

          i     Annual Base Salary -  The Executive's earned but unpaid base
                salary through the Date of Termination;

          ii    Bonus -- A prorated portion of the Executive's annual bonus, if
                any, as determined by the Board based on the actual performance
                by the Company during its fiscal year of the Executive's death
                or Disability. Such determination and payment will be made at
                the same time that bonus consideration and payments, if any, for
                other senior executives for the same performance period are
                made; and

          iii   Benefits -- The Executive shall be paid or be provided such
                other benefits for which the Executive is entitled under the
                terms of any employee benefit plan or program of the Company in
                which the Executive may be, or may have been, a participant
                including any earned but unpaid Paid Time Off through the Date
                of Termination.

     (b)  CAUSE. In the event the Executive is terminated for Cause, the
          Executive shall receive only such benefits, if any, as may be provided
          to him under the terms of any employee benefit, incentive, option,
          stock award and other plans or programs of the Company in which he may
          be, or may have been, a participant and shall be paid any balance of
          the Executive's earned but unpaid Annual Base Salary and any Paid Time
          Off for the period through the Date of Termination.

     (c) VOLUNTARY RESIGNATION. In the event the Executive voluntarily
         terminates his employment while actively employed, or breaches this
         agreement following termination, the Company shall pay or provide to
         the Executive only such benefits, if any, as may be provided to him
         under the terms of


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          any employee benefit plans or programs of the Company in which the
          Executive may be, or may have been, a participant, and shall be paid
          any balance of the Executive's earned but unpaid Annual Base Salary
          and accrued but unpaid Paid Time Off through the Date of Termination.

     (d)  INVOLUNTARY TERMINATION. In the event the Executive's employment is
          involuntarily terminated by the Company under Section 6(d), the
          Company shall pay or provide to the Executive, subject to the
          Executive signing and delivering to the Company a release and
          separation agreement reasonably acceptable to the Company:

          i.    Severance Pay -- The Executive shall receive severance pay equal
                to 24 months of Executive's then current base salary, payable in
                regular installments on the Company's normal payroll dates over
                a 12 month period;

          ii.   Bonus -- The Executive shall receive one (1) times the greater
                of: the full year annual bonus at 100% target for the calendar
                year in which severance occurs, or the average of last 2 annual
                bonuses paid to the Executive. Such payment will be made at the
                same time that bonus consideration and payments for other senior
                executives for the same performance period are made;

          iii.  Medical & Dental - The Executive shall upon finalization of the
                agreement and release, receive a lump-sum payment in the amount
                of eighteen (18) times the then current monthly premiums for the
                Executive's medical and dental insurance coverage. All other
                welfare and insurance benefits shall cease as of the Date of
                Termination; and

          iv.   Benefit Payment -- The Executive shall upon finalization of the
                agreement and release, receive a $4,000 payment to be applied
                toward the purchase of individual disability, life or any other
                insurances or coverages that terminated upon the Executive's
                Date of Termination; and

          v.    Long-Term Incentive -- The Executive shall continue to have
                rights associated with any vested benefits as of the Date of
                Termination. Following the Date of Termination, all non-vested
                stock or stock options or other long-term incentives are
                forfeited pursuant to and subject to the terms set forth in the
                incentive plans.

          vi.   401(k), Pension and Supplemental Benefits -- The Executive shall
                be paid or be provided such other benefits for which the
                Executive is entitled under the terms of any employee benefit
                plan or program of the Company in which the Executive may be, or
                may have been, a participant including any earned but unpaid
                Paid Time Off through the Date of Termination.

     (e)  CHANGE IN CONTROL. If, at anytime within one (1) year following the
          date in which a Change in Control shall have occurred, the Company
          terminates the Executive's employment for any reason whatsoever
          (except in the case of commission of a felonious act); or the
          Executive terminates his Term of employment for Qualifying Reasons as
          set forth above, the Company shall pay or provide the following to the
          Executive, subject to the Executive signing a release and separation
          agreement reasonably acceptable to the Company:


          i.    Severance Pay -- The Executive shall receive a lump-sum
                severance payment equal to 24 months the Executive's then
                current base salary. Within 7 days of the Date of Termination,
                the Company shall submit to the Executive a release and
                separation agreement which is consistent


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                with the terms of this Agreement. The severance payment under
                this subsection will be paid to Executive within 7 days after
                the release and separation agreement become final and binding;
                and

          ii.   Bonus -- The Executive shall receive one (1) times the greater
                of: the full year annual performance bonus at 100% target for
                the calendar year in which severance occurs, or the average of
                last 2 performance bonuses paid to the Executive. Such payment
                will be made within 7 days after the release and separation
                agreement become final and binding; and

          iii.  Medical & Dental -- The Executive shall, upon finalization of
                the agreement and release, receive a lump-sum payment in the
                amount of eighteen (18) times the then current monthly premiums
                for the Executive's medical and dental insurance. All other
                welfare and insurance benefits shall cease as of the Date of
                Termination; and

          iv.   Benefit Payment --The Executive shall, upon finalization of the
                agreement and release, receive a lump-sum payment of $4,000 to
                be applied toward the purchase of individual disability, life or
                any other insurances or coverages that terminated upon the
                Executive's Date of Termination; and

          v.    Long-Term Incentive -- The Executive shall receive all awards
                made to the Executive under long-term incentive plans or
                programs, pursuant to and subject to the terms set forth in the
                incentive plans; and

          vi.   401(k) Pension and Supplemental Benefits -- The Executive shall
                be paid or be provided such other benefits for which the
                Executive is entitled under the terms of any employee benefit
                plan or program of the Company in which the Executive may be, or
                may have been, a participant including any earned but unpaid
                Paid Time Off through the Date of Termination; and

          vii.  The Company shall reimburse the Executive for reasonable
                attorney fees incurred by the Executive in connection with the
                enforcement of this Section 7(e).

8.   REDUCTION OF PAYMENTS.
     Notwithstanding any other provision of this Agreement or of any other
     agreement, understanding or compensation plan, the Company shall not pay,
     and the Executive shall not receive, any payment which, taking into account
     all payments, rights, and benefits whether or not under this Agreement,
     would be deemed to be an "excess parachute payment" under Section 280G of
     the Internal Revenue Code of 1986, as amended, and the amount of payment
     hereunder shall be reduced to the extent necessary to ensure that the
     Executive receives no "parachute payment" in connection with such Change in
     Control if, as determined by the Company, the reduction would be beneficial
     to the Executive.

9.   SUCCESSORS AND ASSIGNS.
     This Agreement shall not be terminated by voluntary or involuntary
     dissolution of the Company or by the merger or consolidation where the
     Company is not the surviving or resulting corporation. This Agreement is
     binding upon and will be enforceable by the Company and by its successors
     and by the assignees of all or substantially all of its business, and by
     any other corporation into which the Company may be merged or consolidated.
     Upon assignment of this Agreement by Company, the provisions of this
     Agreement, including but not limited to the provisions of Section 12, will
     be enforceable by the company receiving the assignment.




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10.  NON-ASSIGNABILITY BY EXECUTIVE.
     The obligations of the Executive hereunder may not be assigned or
     transferred by the Executive in any manner whatsoever, nor are such
     obligations subject to involuntary alienation, assignment or transfer.

11.  RELATED COMPANIES.
     Notwithstanding Section 9, above, the Company may assign the Executive to
     perform services for other companies that are under common ownership or
     control with the Company, and may assign this Agreement to other companies
     that are under common ownership or control with the Company. Such
     assignment may be made without the Executive's consent.

12.  PROTECTION OF CONFIDENTIAL INFORMATION AND TRADE SECRETS; COMPANY BUSINESS
     ASSETS; NON COMPETE AND NON-SOLICITATION.

     (a) CONFIDENTIAL INFORMATION AND TRADE SECRETS. The Executive acknowledges
         that he or she will be working with or exposed to confidential
         information and trade secrets, which are the property of the Company
         and/or its affiliates. Such information includes, but is not limited
         to: client lists and information; medical data; financial data; sales
         data; marketing data; policyholder data; claims data; personnel
         information; business files; contracts; documents; business strategies;
         business opportunities; any and all information pertaining to potential
         or actual corporate acquisitions, mergers, consolidations, conversions,
         joint ventures, or other similar agreements; computer software,
         software codes, and software documentation, and other documents or
         information deemed confidential by the Company and so designated to the
         Executive. During and after employment with the Company, the Executive
         agrees not to share such information with any person outside of the
         Company, except upon prior written authorization from the Company
         following notice to and approval by its Board.

     (b) COMPANY BUSINESS ASSETS. The Parties agree that the business assets of
         the Company include information regarding Company clients, and
         relationships with Company clients, and confidential information and
         trade secrets of the Company, including those items listed in Section
         12 (a) above. The Executive also agrees that the work product of the
         Executive produced in the course of employment with Company will be the
         property of Company and/or its affiliates. The Executive agrees that
         the Company and/or its affiliates shall own the copyright, patent, and
         other property rights in such work product, and that this work product
         will be work made for hire for copyright purposes. Upon termination of
         employment, the Executive shall deliver to the Company all work
         product, and all confidential information and trade secrets, including
         but not limited to the items listed in Section 12 (a), and the
         Executive shall not retain any copies. If there is any breach or
         threatened breach by the Executive of the provisions of this Section or
         Section 12 (a), the Company shall be entitled to injunctive relief
         against the Executive or those persons or entities with whom the
         Executive is then affiliated, and to reasonable damages, including
         reasonable attorneys' fees. Such reasonable damages shall include at a
         minimum but not exclusively the amount of any benefit that the
         Executive would receive from disclosing or using the information.

     (c) NON-SOLICITATION. The Executive agrees that for a period of one (1)
         year after termination of employment with the Company, the Executive
         will not directly or indirectly solicit business from or sell any
         service or product to any clients of the Company or clients of any
         subsidiary or affiliate of the Company for any types of insurance or
         other services or products which are offered by or through the Company
         or its affiliates. Clients include current insureds and any persons or
         entity insured or serviced for a fee by the Company or its affiliates
         during the one-year period preceding


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         termination of the Executive's employment. The Executive also expressly
         agrees that for a period of two (2) years after termination of
         employment with the Company, the Executive will not directly or
         indirectly induce, attempt to induce, or enable or support the
         inducement of any employee to depart from or cease employment with the
         Company or its affiliates, nor will the Executive interfere with or
         disrupt the Company's or its affiliates' relationships with other
         employees. If there is any breach or threatened breach of this Section,
         the Company and its affiliates shall be entitled to injunctive relief
         against the Executive or those persons or entities with whom the
         Executives is then affiliated, and reasonable damages, including
         reasonable attorneys' fees.

     (d) NON-COMPETE. Executive agrees that for a period of one (1) year after
         termination of employment, Executive will not directly or indirectly
         accept a position with or provide any managerial or executive services
         to any business entity which competes with Company or Company's
         affiliates in their core lines of business, including but not limited
         to professional liability insurance and worker's compensation
         insurance, in any states where Company or its affiliates are doing
         business in the United States at the time of termination. This
         non-compete provision applies to providing services to a competitor in
         any capacity, directly or indirectly, including as an employee,
         consultant, owner, partner, shareholder (other than a minority
         shareholder in a publicly traded corporation), and also applies to
         aiding or assisting any other person or entity in providing such
         services. Provided that, the Board or CEO of ACAP may give prior
         written consent to the Executive accepting a position which would
         otherwise be in violation of this non-compete provision. If there is
         any breach or threatened breach of this section, the Company and its
         affiliates shall be entitled to injunctive relief against the Executive
         and those entities with whom Executive is then affiliated, and
         reasonable damages, including reasonable attorneys' fees.

     (e) RETURN OF COMPANY PROPERTY. Immediately upon the termination of the
         Executive's employment with the Company and at any time upon the
         Company's request, the Executive shall deliver to the Company all the
         Company property in the Executive's possession, custody or control
         including notebooks, reports, manuals, programming data, listings and
         materials, engineering or patent drawings, patent applications, any
         other documents, files or materials which contain, mention or relate to
         Confidential Information, and all copies and summaries of such
         materials whether in written, mechanical, electromagnetic, analog,
         digital or any other format or medium.

     (f) CONSENT TO MODIFICATION BY THE COURTS. It is the express intention of
         the parties to this Agreement that, if it should appear that any of the
         terms or covenants of this section are in conflict with any rule of law
         or statutory provision of the State of Michigan or any other
         jurisdiction where this Agreement is being enforced, which conflict
         would ordinarily render such terms or covenants inoperative or null and
         void, the parties request that the Courts of such state modify any such
         term or covenant so that the intention of the parties hereto is carried
         out to as great a degree and extent as the Court deems reasonable in
         order to conform with any rule of law or statutory provision regarding
         restrictive covenants of the State of Michigan or of such other
         jurisdiction.

13.  ARBITRATION OF DISPUTES.
     The Executive and the Company agree that any controversy or claim arising
     out of or relating to this Agreement, the breach thereof, or the coverage
     of this arbitration provision shall be settled by arbitration, rather than
     by litigation, administered by the American Arbitration Association in
     accordance with the National Rules for the Resolution of Employment
     Disputes in effect on the date of delivery of demand for arbitration. The
     Executive waives the right to submit any discrimination claims or other
     employment-related claims in a court proceeding, and elects instead to
     submit any such claims


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     to arbitration. This Agreement to resolve disputes through arbitration is
     not a waiver of any of the Executive's substantive rights or remedies under
     law, and the arbitrator shall have the authority to grant any remedy or
     relief that could be granted in a court proceeding. The arbitration of such
     issues, including the determination of the amount of any damages suffered
     by either party hereto by reason of the acts or omissions of the other,
     shall be to the exclusion of any court. The decision of the arbitrators
     shall be final and binding on the parties and their respective heirs,
     executors, administrators, successors and assignees. Judgment upon the
     award rendered by the arbitrators may be entered in any court having
     jurisdiction. There shall be three arbitrators, one to be chosen directly
     by each party and the third arbitrator to be selected by the two
     arbitrators so chosen. The arbitration shall be conducted in Michigan or at
     such other location as agreed by the parties. All decisions and awards
     shall be made by a majority of the arbitrators. Each party shall pay the
     fees and expenses of that party's arbitrator and any representatives,
     witnesses and all other expenses related to the presentation of that
     party's case. The cost of the third arbitrator, the record or any
     transcripts, any administrative fees, and all other fees and costs shall be
     borne equally by the parties. The arbitrators shall have the authority to
     award reimbursement of reasonable attorneys' fees and other fees and
     expenses as part of the remedy, in accordance with applicable law.

     By agreeing to arbitration under this Section, the Company and the
     Executive understand that they are each waiving any right to a trial by
     jury and each party makes that waiver knowingly and voluntarily with full
     consideration of the ramifications of such waiver.

     Nothing contained herein shall be construed or interpreted to preclude the
     Company prior to, or pending the resolution of, any matter subject to
     arbitration from seeking injunctive relief in any court for any breach or
     threatened breach of any of the Executive's obligations in Section 12
     hereof.

14.  RESOLUTION OF DISPUTES.
     The parties agree that this Agreement will be governed by and interpreted
     in accordance with the laws of the State of Michigan, without application
     of choice of law rules.


15.  RIGHT TO INJUNCTIVE AND OTHER RELIEF; CONSENT TO JURISDICTION.
     (a) The Executive acknowledges that the Company will suffer irreparable
         harm, not readily susceptible of valuation in monetary damages, if the
         Executive breaches any of his obligations in Section 12 of this
         Agreement. Accordingly, the Executive agrees that the Company shall be
         entitled to injunctive relief against any breach or prospective breach
         by the Executive of his obligations in Section 12 in any federal or
         state court of competent jurisdiction, and the Executive hereby submits
         to the jurisdiction of any such federal or state court in the State of
         Michigan for the purposes of any actions or proceedings instituted by
         the Company to obtain such injunctive relief. Nothing herein shall be
         construed as prohibiting the Company from pursuing any other remedies
         available to the Company for such breach or threatened breach,
         including the recovery of damages from the Executive,

     (b) In addition to the rights set forth in subsection (a), above, if
         Executive breaches any of his obligations under Section 12 the Company
         shall be entitled to cease making further payments to the Executive
         pursuant to clauses (i) through (iv) of Section 7 (d) or (e), as the
         case may be, as well as pursuant to clause (v) of Section 7 (d); and to
         terminate Executive's rights of participation under clause (v) of
         Section 7 (d) or (e), as the case may be,



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     (c)  This section shall survive the termination of the Executive's
          Employment

16.  ENTIRE AGREEMENT.
     This written Agreement sets forth the entire Employment Agreement between
     the parties, and it supersedes all prior negotiations, employment
     interviews, communications, and understandings between the Parties whether
     written or oral. There are no other Employment Agreements between the
     Parties.

17.  AMENDMENT. This Agreement may not be changed orally but only by a written
     agreement that expressly references this Agreement, signed by the Executive
     and the Company's Chief Executive Officer, and approved by its Board of
     Directors.

18.  SEVERABILITY.
     The various Sections of this Agreement are severable. If any Section
     or an identifiable part thereof is held to be invalid or unenforceable by
     any court of competent jurisdiction, then such invalidity or
     unenforceability shall not affect the validity or enforceability of the
     remaining Sections or identifiable parts thereof in this Agreement. The
     parties hereto agree that the portion so held invalid, unenforceable or
     void shall, if possible, be deemed amended or reduced in scope, or
     otherwise be stricken from this Agreement, to the extent required for the
     purposes of the validity and enforcement hereof.

19.  BENEFICIARIES.
     The Executive may select (and change, to the extent permitted under any
     applicable law) a beneficiary or beneficiaries to receive any compensation
     or benefit payable under this Agreement following the Executive's death or
     disability, and may change such election by giving the Company written
     notice thereof. In the event of the Executive's death, Disability or a
     judicial determination of the Executive's incompetence, all references in
     this Agreement to the Executive shall be deemed, where appropriate, to
     refer to the Executive's named beneficiary, estate or other legal
     representative.


20.  NOTICES.
     All notices which a party is required or may desire to give to the other
     party under or in connection with this Agreement shall be sufficient if
     given by hand delivery or by addressing same to the other party as follows:
     (a) if to the Executive, to: the last known address of record with the
     Company, or (b) if to the Company, to: Attn: Secretary, American Physicians
     Assurance Corporation, 1301 North Hagadorn Road, East Lansing, MI
     48826-1471; or at such other place as may be designated in writing by like
     notice. Any notice shall be deemed to have been delivered when addressed as
     required herein and deposited postage prepaid, in the United States Mail.

21.  ACTION OF THE BOARD
     Any reference in this Agreement to the Board shall include the Board, the
     Compensation Committee thereof and any officers of the Company to which the
     Board or the Compensation Committee thereof has by resolution delegated any
     explicit authority or responsibilities with respect of this Agreement.

22.  TAX WITHHOLDINGS
     All payments to the Executive hereunder shall be subject to such
     withholding of federal, state and local income and excise taxes and to such
     employment taxes as may be reasonably determined by the Company to be
     required.


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23.  SURVIVAL AND CONTINUATION OF AGREEMENT PROVISIONS.
     The termination of the Executive's employment for any reason whatsoever
     shall not operate to terminate this Agreement or otherwise adversely affect
     the respective continuing rights and obligations of the parties, including
     but not limited to, those under Sections 5(b), 7, 8, 9, 12, 13, 15 and 20
     of this Agreement, all of which shall survive the effective date of such
     termination of employment in accordance with their respective terms.



EXECUTIVE
                                           AMERICAN PHYSICIANS ASSURANCE
                                           CORPORATION


/s/ Thomas Chase                           /s/ William B. Cheeseman
------------------                         -------------------------------------
                                           President and Chief Executive Officer








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