Exhibit 10.49**AMENDMENT NO. 2 TO****AMERICANPHYSICIANS CAPITAL, INC.**STOCK COMPENSATION PLAN     **THIS AMENDMENT**to the American Physicians Capital, Inc. Stock Compensation Plan (the “Plan”)is made this 24th day of October, 2007 pursuant to Section 7.07(b) of the Plan followingapproval by the Board of Directors of American Physicians Capital, Inc. This Amendment No. 2 shallbe effective as of January 1, 2007. The Amendment is intended to clarify the application ofSection 409A of the Internal Revenue Code (the “Code”) to Restricted Stock Units, PerformanceAwards and any other grants or awards under the Plan that are subject to Code Section 409A.Options and Restricted Stock Awards are not intended to be subject to Code Section 409A. BetweenJanuary 1, 2005 and December 31, 2006, the Plan was administered in good faith compliance with IRSguidance then in effect relating to Code Section 409A. Grants and awards that were vested as ofDecember 31, 2004 are intended to be grandfathered from Code Section 409A and to be administered inaccordance with the terms of the Plan in effect on December 31, 2004, with no permitted materialmodifications thereafter. 1. Section 1.03(E) “CHANGE IN CONTROL” is amended by the replacement of theperiod with a comma at the end of (4) and the addition of (5) to read as follows: (5) Notwithstanding the foregoing, for purposes of RestrictedStock Units, Performance Awards and any other grants and awards that aresubject to Code Section 409A, Change in Control shall be defined as theoccurrence of any of the following events: (a) If any one person, or more than one personacting as a group (as defined in Code Section 409A and IRS guidanceissued thereunder), acquires ownership of Common Stock of theCorporation that, together with stock held by such person or group,constitutes more than fifty (50) percent of the total fair market valueor total voting power of the Common Stock of the Corporation However,if any one person or more than one person acting as a group, isconsidered to own more than fifty (50) percent of the total fair marketvalue or total voting power of the Common Stock of the Corporation, theacquisition of additional stock by the same person or persons is notconsidered to cause a Change in Control, or to cause a change in theeffective control of the Corporation (within the meaning of CodeSection 409A and IRS guidance issued thereunder). An increase in thepercentage of Common Stock owned by any one person, or persons actingas agroup, as a result of a transaction in which the Corporationacquires its stock in exchange for property shall be treated as an
 

 
   acquisition of stock for purposes of this Section. This paragraphapplies only when there is a transfer of stock of the Corporation(or issuance of stock of the Corporation) and stock in suchCorporation remains outstanding after the transaction. Subsection(a) shall constitute a “Change in Ownership” of the Corporation. (b) If any one person, or more than one personacting as a group (as determined in accordance with Code Section 409Aand IRS guidance thereunder), acquires (or has acquired during the12-month period ending on the date of the most recent acquisition bysuch person or persons) ownership of Common Stock of the Corporationpossessing thirty (30) percent or more of the total voting power of theCommon Stock of the Corporation; or  (c) If a majority of members on the Corporation’sBoard is replaced during any 12-month period by Directors whoseappointment or election is not endorsed by a majority of the members ofthe Corporation’s Board prior to the date of the appointment orelection (provided that for purposes of this paragraph, the termCorporation refers solely to the “relevant” Corporation, as defined inCode Section 409A and IRS guidance issued thereunder), for which noother Corporation is a majority shareholder. Subsections (b) and (c)individually shall constitute a “Change in Effective Control” of theCorporation.  (d) If there is a change in the ownership of asubstantial portion of the Corporation’s assets, which shall occur onthe date that any one person, or more than one person acting as a group(within the meaning of Code Section 409A and IRS guidance issuedthereunder) acquires (or has acquired during the 12-month period endingon the date of the most recent acquisition by such person or persons)assets from the Corporation that have a total gross fair market valueequal to or more than forty (40) percent of the total gross fair marketvalue of all of the assets of the Corporation immediately prior to suchacquisition or acquisitions. For this purpose, gross fair market valuemeans the value of the assets of the Corporation, or the value of theassets being disposed of, determined without regard to any liabilitiesassociated with such assets. Subsection (iv) shall constitute a“Change in Ownership of a Substantial Portion of Assets” of theCorporation. 2. Section 1.03(K) “DISABILITY” is amended and restated in its entirety to read asfollows:
2

 
 (K) “DISABILITY” means disability as defined in Section 22(e) ofthe Code; provided, however, that for purposes of Restricted Stock Units,Performance Awards and any other grants or awards that are subject to CodeSection 409A, disability shall be defined as (i) a Participant’s inability toengage in any substantial gainful activity by reason of any medicallydeterminable physical or mental impairment which can be expected to result indeath or can be expected to last for a continuous period of not less than 12months; or (ii) by reason of any medically determinable physical or mentalimpairment which can be expected to result in death or can be expected to lastfor a continuous period of not less than 12 months, the participant isreceiving income replacement benefits for a period of not less than threemonths under an accident and health plan covering employees of theParticipant’s employer; or (iii) the Participant has been certified as disabledunder Section 223(d) of the Social Security Act. 3. Section 1.03(O) “FAIR MARKET VALUE” is amended and restated in its entirety toread as follows: (O) “FAIR MARKET VALUE” means, with respect to a share of CommonStock on a given date: (a) if the Common Stock is listed for trading on anational securities exchange (including, for this purpose, the National MarketSystem (“NMS”) of the National Association of Securities Dealers AutomatedSystem (“NASDAQ”)) on such date, the closing share price on such exchange (or,if there is more than one, the principal such exchange), or, for the NMS, thelast sale price, on the day immediately preceding the date on which Fair MarketValue is being determined, or on the next preceding day on which shares weretraded if no shares were traded on the immediately preceding day; or (b) if (a)is not applicable, the Fair Market Value shall be determined in good faith bythe Committee. For purposes of establishing Fair Market Value for any grantsor awards made prior to the Effective Date, the lower of the purchase price forsubscription shares or the underwritten offering price shall be deemed toconstitute Fair Market Value. 4. Section 1.03(BB) “RETIREMENT” is amended and restated in its entirety to readas follows: (BB) “RETIREMENT” means a Participant’s voluntary cessation ofemployment or services as a Non-Employee Director or Consultant following theParticipant’s 65th birthday. For purposes of Restricted StockUnits, Performance Awards and any other grants or awards subject to CodeSection 409A, “cessation of employment or services” shall mean “separation fromservice” as defined in Treasury Regulation 1.409A-1(h).
3

 
 5. Section 1.03(CC) “SPECIFIED EMPLOYEE” shall be added to the Plan to read asfollows: (CC) “SPECIFIED EMPLOYEE” means an employee as defined in TreasuryRegulation 1.409A-1(i). 6. Section 5.03 “OTHER PROVISIONS” shall be amended by the addition of thefollowing sentence at the end of the paragraph to read as follows: For purposes of Restricted Stock Units, Performance Awards or any other grantssubject to 409A, the term “termination of employment” shall mean “separation fromservice” as defined in Treasury Regulation 1.409A-1(h). 7. Section 7.12 “APPLICATION OF SPECIFIED EMPLOYEE DELAYED PAYMENT RULES” shall beadded to the Plan to read as follows: 7.12 APPLICATION OF SPECIFIED EMPLOYEE DELAYED PAYMENT RULES. If aParticipant is entitled to compensation from a Restricted Stock Unit,Performance Award or any other grant or award subject to Code Section 409A uponseparation from service and at the time of the separation from service theParticipant is a Specified Employee and by application of Code Section 409Acompensation that otherwise would have been payable during the six month periodimmediately following the Participant’s separation from service is required tobe delayed, such compensation shall be aggregated and paid to the Participanton the first business day after six months have lapsed following theParticipant’s separation from service.               **IN WITNESS WHEREOF**, American Physicians Capital, Inc. has caused this Amendment No. 2 to beexecuted as of the day and year first above written.      **AMERICAN PHYSICIANS CAPITAL, INC.******