##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
   Form 10-Q
   þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    March 31, 2008o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to    Commission File Number:
    000-32057
  American Physicians Capital,
    Inc.
 (Exact name of registrant as
    specified in its charter)
   Michigan(State or other jurisdiction
    of
    incorporation or organization)

38-3543910(IRS employer
    identification number)    1301
    North Hagadorn Road, East Lansing, Michigan 48823
 (Address of principal executive
    offices, including zip code)
   Registrants telephone number, including area code:
 (517) 351-1150
  þ o
  12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o

Smaller reporting
    company o(Do
    not check if a smaller reporting company)   Rule 12b-2 o þ




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##### 



TABLE OF
    CONTENTS
  PART I.  FINANCIAL
    INFORMATIONItem 1
.

Financial StatementsCondensed Consolidated Balance Sheets


3Condensed Consolidated Statements of Income


4Condensed Consolidated Statements of
    Shareholders Equity


5Condensed Consolidated Statements of
    Comprehensive Income


6Condensed Consolidated Statements of Cash
    Flows


7Notes to Condensed Consolidated Financial
    Statements


8Item 2
.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


13Item 3
.

Quantitative and Qualitative Disclosures About
    Market Risk


24Item 4
.

Controls and Procedures


26PART II.  OTHER INFORMATIONItem 1A
.

Risk Factors


27Item 2
.

Unregistered Sales of Equity Securities and Use
    of Proceeds


27Item 4
.

Submission of Matters to a Vote of Security
    Holders


27Item 6
.

Exhibits


28Signatures


29Exhibit Index


30Certification of Chief Executive Officer pursuant to Rule 13a-14(a)Certification of Chief Financial Officer pursuant to Rule 13a-14(a)Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350   2




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##### Table of Contents



PART I.
    FINANCIAL INFORMATION  ITEM 1.
    FINANCIAL
    STATEMENTS  AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
 Condensed
    Consolidated Balance Sheets  March 31,


December 31,2008


2007(Unaudited)(In thousands, except share data)ASSETSInvestments:Fixed-income securitiesAvailable-for-sale, at fair value (amortized cost
    2008  $249,080 and 2007  $256,436)

$
257,469


$
262,301Held-to-maturity, at amortized cost (fair value 2008 
    $485,168 and 2007  $496,611)


478,502



497,662Other investments


11,334



11,487Total investments


747,305



771,450Cash and cash equivalents


102,965



87,498Premiums receivable


33,322



35,542Reinsurance recoverable


104,791



106,961Deferred federal income taxes


20,557



22,439Federal income tax recoverable






1,076Property and equipment, net of accumulated depreciation


14,830



13,789Other assets


20,048



18,707Total assets

$
1,043,818


$
1,057,462LIABILITIESUnpaid losses and loss adjustment expenses

$
661,384


$
664,117Unearned premiums


60,920



60,080Long-term debt


30,928



30,928Federal income taxes payable


2,906



Other liabilities


29,438



38,780Total liabilities


785,576



793,905Commitments & ContingenciesShareholders EquityCommon stock, no par value, 50,000,000 shares authorized:
    9,733,252 and 10,127,740 shares outstanding at
    March 31, 2008 and December 31, 2007, respectively






Additional
    paid-in-capital






Retained earnings


250,776



257,502Accumulated other comprehensive income:Net unrealized appreciation on investments, net of deferred
    federal income taxes


7,466



6,055Total shareholders equity


258,242



263,557Total liabilities and shareholders equity

$
1,043,818


$
1,057,462    3




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
 Condensed
    Consolidated Statements of Income  Three Months EndedMarch 31,2008


2007(Unaudited)(In thousands, except per share data)Net premiums written

$
32,175


$
34,894Change in net unearned premiums


(528
)


138Net premiums earned


31,647



35,032Investment income


9,957



11,177Net realized losses


(782
)


(2
)Other income


189



213Total revenues and other income


41,011



46,420Losses and loss adjustment expenses


16,198



22,362Underwriting expenses


7,016



7,361Investment expenses


262



187Interest expense


688



773General and administrative expenses


267



332Other expenses






3Total expenses


24,431



31,018Income before federal income taxes


16,580



15,402Federal income tax expense


5,206



4,897Net income

$
11,374


$
10,505Net income  per common shareBasic

$
1.15


$
0.92Diluted

$
1.13


$
0.90    4




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
 Condensed
    Consolidated Statements of Shareholders Equity  AccumulatedAdditional





OtherShares


Paid-in


Retained


ComprehensiveOutstanding


Capital


Earnings


Income


Total(Unaudited)(In thousands, except share data)Balance, December 31, 2007


10,127,740


$



$
257,502


$
6,055


$
263,557Comprehensive income:Net income










11,374







11,374Other comprehensive income














1,411



1,411Total comprehensive income, net of taxes


















12,785Options exercised


10,960



168











168Shares tendered/netted in connection with option exercise


(1,448
)


(63
)










(63
)Cash dividends to shareholders, $0.10 per share










(980
)






(980
)Excess tax benefits from share-based awards






101











101Fair value compensation of share-based awards






19











19Purchase and retirement of common stock


(404,000
)


(225
)


(17,120
)






(17,345
)Balance, March 31, 2008


9,733,252


$



$
250,776


$
7,466


$
258,242   AccumulatedAdditional





OtherShares


Paid-in


Retained


ComprehensiveOutstanding


Capital


Earnings


Income


Total(Unaudited)(In thousands, except share data)Balance, December 31, 2006


11,556,575


$
41,106


$
222,935


$
4,769


$
268,810Comprehensive income:Net income










10,505







10,505Other comprehensive income














38



38Total comprehensive income, net of taxes


















10,543Options exercised


15,050



143











143Shares tendered/netted in connection with option exercise


(3,201
)


(122
)










(122
)Excess tax benefits from share-based awards






305











305Fair value compensation of share-based awards






66











66Purchase and retirement of common stock


(372,400
)


(13,898
)










(13,898
)Balance, March 31, 2007


11,196,024


$
27,600


$
233,440


$
4,807


$
265,847    5




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
 Condensed
    Consolidated Statements of Comprehensive Income  Three Months EndedMarch 31,2008


2007(Unaudited)(In thousands)Net income

$
11,374


$
10,505Other comprehensive income (loss):Unrealized appreciation on available-for-sale investment
    securities arising during the period


1,514



300Amortization of net unrealized appreciation on held-to-maturity
    investment securities since the date of transfer from the
    available-for-sale category


(202
)


(242
)Adjustment for realized losses on investment securities included
    in net income


858



Other comprehensive income before tax


2,170



58Deferred federal income tax expense


759



20Other comprehensive income


1,411



38Comprehensive income

$
12,785


$
10,543    6




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
 Condensed
    Consolidated Statements of Cash Flows  Three Months EndedMarch 31,2008


2007(Unaudited)(In thousands)Cash flows from (for) operating activitiesNet income

$
11,374


$
10,505Adjustments to reconcile net income to net cash from operating
    activities:Depreciation and amortization


912



681Net realized losses


782



2Deferred federal income taxes


1,123



2,066Current federal income taxes


4,083



2,746Excess tax benefits from share-based awards


(101
)


(305
)Share-based compensation


19



66Income on equity method investees






1Changes in:Unpaid loss and loss adjustment expenses


(2,733
)


(16
)Unearned premiums


840



(1,006
)Other assets and liabilities


(3,491
)


(1,448
)Net cash from operating activities


12,808



13,292Cash flows from (for) investing activitiesPurchasesAvailable-for-sale  fixed income


(11,848
)


Held-to-maturity  fixed income


(46,550
)


Property and equipment


(1,286
)


(268
)Proceeds from sales and maturitiesAvailable-for-sale  fixed income


18,034



8,039Held-to-maturity  fixed income


65,231



3,408Other investments






125Property and equipment






4Pending securities transactions






32Net cash from investing activities


23,581



11,340Cash flows from (for) financing activitiesCommon stock repurchased


(17,345
)


(13,898
)Excess tax benefits from share-based awards


101



305Change in payable for shares repurchased


(2,803
)


(318
)Cash dividends paid


(980
)


Proceeds from stock options exercised


105



21Net cash for financing activities


(20,922
)


(13,890
)Net increase in cash and cash equivalents


15,467



10,742Cash and cash equivalents, beginning of period


87,498



108,227Cash and cash equivalents, end of period

$
102,965


$
118,969    7




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  Notes
    to Condensed Consolidated Financial Statements
    (Unaudited)
  1.
    Significant
    Accounting Policies  Basis
    of Consolidation and Reporting
    Form 10-Q Rule 10-01 Regulation S-X Form 10-Q
  Form 10-K
  Reclassifications
    Use of
    Estimates
      Nature
    of Business
    2.
    Effects
    of New Accounting Pronouncements  Fair Value Measurements
 8




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##### Table of Contents



American
    Physicians Capital, Inc. and Subsidiaries
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
  FAS No. 157-2. FAS No. 157-2
  Business Combinations, , Business Combinations
  Non-controlling Interests in Consolidated Financial
    Statements  an amendment of Accounting Research
    Bulletin No. 51
  Disclosures about Derivative
    Instruments and Hedging Activities  an amendment
    of FASB Statement No. 133
 9




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##### Table of Contents



American
    Physicians Capital, Inc. and Subsidiaries
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
  3.
    Income
    Per Share    Three Months Ended March 31,2008


2007(In thousands, except per share data)Numerator for basic and diluted income per common share:Net income

$
11,374


$
10,505Denominator:Denominator for basic income per common share 
    weighted average shares outstanding


9,916



11,435Effect of dilutive stock options and awards


194



213Denominator for diluted income per common share 
    adjusted weighted average shares outstanding


10,110



11,648Net income  basic

$
1.15


$
0.92Net income  diluted

$
1.13


$
0.90     4.
    Fair
    Value Measurements    
    Level 1: Quoted prices (unadjusted) for identical assets or
    liabilities in active markets that the entity has the ability to
    access as of the measurement date.
    Level 2: Significant observable inputs other than
    Level 1 prices such as quoted prices for similar assets or
    liabilities in active markets; quoted prices for identical or
    similar assets or liabilities in markets that are not active; or
    other inputs that are observable or can be derived from or
    corroborated by observable market data by correlation or other
    means.
    Level 3: Significant unobservable inputs that reflect a
    reporting entitys own assumptions about the assumptions
    that market participants would use in pricing an asset or
    liability. 10




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##### Table of Contents



American
    Physicians Capital, Inc. and Subsidiaries
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
     Valuation
    of Investments
    Investments
    Measured at Fair Value on a Recurring Basis
  Available-for-sale fixed-income
    securities
  Available-for-sale equity securities
    Total


Level 1


Level 2


Level 3(In thousands)Available-for-sale investments:Fixed-income securites

$
257,469


$



$
250,405


$
7,064Equity securities(1)


6,363



6,363







Total

$
263,832


$
6,363


$
250,405


$
7,064     (1)
    
    Included in other investments on the accompanying Condensed
    Consolidated Balance Sheets.     11




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##### Table of Contents



American
    Physicians Capital, Inc. and Subsidiaries
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
    Available-for-SaleFixed-IncomeSecurities(In thousands)Balance at January 1, 2008

$
6,911(Amortization)/Accretion of (premium)/discount(1)


Net unrealized appreciation included in other comprehensive
    income


153Balance at March 31, 2008

$
7,064     (1)
    
    Included in investment income in the accompanying Condensed
    Consolidated Statements of Income.  Investment
    Measured at Fair Value on a Nonrecurring Basis
  Held-to-maturity fixed-income
    securities
  Other
    Assets and Liabilities Measured at Fair Value on a Nonrecurring
    Basis
  and/or
 12




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K
    Form 10-K
  
    Increased competition could adversely affect our ability to sell
    our products at premium rates we deem adequate, which may result
    in a decrease in premium volume.
    Our reserves for unpaid losses and loss adjustment expenses are
    based on estimates that may prove to be inadequate to cover our
    losses.
    An interruption or change in current marketing and agency
    relationships could reduce the amount of premium we are able to
    write.
    If we are unable to obtain or collect on ceded reinsurance, our
    results of operations and financial condition may be adversely
    affected.
    Our geographic concentration in certain Midwestern states and
    New Mexico ties our performance to the business, economic,
    regulatory and legislative conditions in those states.
    A downgrade in the A.M. Best Company rating of our primary
    insurance subsidiary could reduce the amount of business we are
    able to write.
    Changes in interest rates could adversely impact our results of
    operation, cash flows and financial condition.
    The unpredictability of court decisions could have a material
    impact on our operations.
    Our business could be adversely affected by the loss of one or
    more key employees.
    The insurance industry is subject to regulatory oversight that
    may impact the manner in which we operate our business, our
    ability to obtain future premium rate increases, the type and
    amount of our investments, the levels of capital and surplus
    deemed adequate to protect policyholder interests, or the
    ability of our insurance subsidiaries to pay dividends to the
    holding company.
    Our status as an insurance holding company with no direct
    operations could adversely affect our ability to meet our debt
    obligations and fund future share repurchases.
    Legislative or judicial changes in the tort system may have
    adverse or unintended consequences that could materially and
    adversely affect our results of operations and financial
    condition.
    Applicable law and various provisions in our articles and bylaws
    may prevent and discourage unsolicited attempts to acquire
    APCapital that you may believe are in your best interests or
    that might result in a substantial profit to you. 13




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##### Table of Contents



Overview
    of the Companys Operations
      Form 10-K.
  Critical
    Accounting Policies
    Form 10-K
  Description
    of Ratios and Other Metrics Analyzed
    Underwriting Gain or Loss:
  Loss Ratio:
 14




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##### Table of Contents



Underwriting Expense Ratio:
  Combined Ratio:
  Investment Yield:
         15




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##### Table of Contents



Results
    of Operations  Three Months Ended March 31, 2008
    Compared to Three Months Ended March 31, 2007
    For the Three Months Ended March 31,Change2008


2007


Dollar


Percentage(Dollars in thousands)Direct premiums written

$
33,671


$
36,302


$
(2,631
)


(7.2
)%Net premiums written

$
32,175


$
34,894


$
(2,719
)


(7.8
)%Net premiums earned

$
31,647


$
35,032


$
(3,385
)


(9.7
)%Losses and loss adjustment expensesCurrent year losses


24,618



26,627



(2,009
)


(7.5
)%Prior year losses


(8,420
)


(4,265
)


(4,155
)


97.4
%Total


16,198



22,362



(6,164
)


(27.6
)%Underwriting expenses


7,016



7,361



(345
)


(4.7
)%Total underwriting gain


8,433



5,309



3,124



58.8
%Other revenue (expense) itemsInvestment income


9,957



11,177



(1,220
)


(10.9
)%Net realized losses


(782
)


(2
)


(780
)


39000.0
%Other income


189



213



(24
)


(11.3
)%Other expenses(1)


(1,217
)


(1,295
)


78



(6.0
)%Total other revenue and expense items


8,147



10,093



(1,946
)


(19.3
)%Income before federal income taxes


16,580



15,402



1,178



7.6
%Federal income tax expense


5,206



4,897



309



6.3
%Net income

$
11,374


$
10,505


$
869



8.3
%Loss Ratio:Accident year


77.8
%


76.0
%






1.8
%Prior years


(26.6
)%


(12.2
)%






(14.4
)%Calendar year


51.2
%


63.8
%






(12.6
)%Underwriting expense ratio


22.2
%


21.0
%






1.2
%Combined ratio


73.4
%


84.8
%






(11.4
)%Investment yield


4.71
%


5.12
%






(0.4
)%Return on beginning equity (annualized)


17.3
%


15.6
%






1.6
%     (1)
    
    Other expenses includes investment expenses, interest expense,
    general and administrative expenses and other expenses as
    reported in the unaudited Condensed Consolidated Statements of
    Income included elsewhere in this report. 16




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##### Table of Contents



Overview
    Premiums
    Written and Earned
    For the Three Months Ended March 31,Change2008


2007


Dollar


Percentage(Dollars in thousands)Direct premiums writtenMichigan

$
9,840


$
9,263


$
577



6.2
%Illinois


8,554



9,840



(1,286
)


(13.1
)%Ohio


7,447



8,365



(918
)


(11.0
)%New Mexico


5,072



5,454



(382
)


(7.0
)%Kentucky


2,137



2,733



(596
)


(21.8
)%Other


621



647



(26
)


(4.0
)%Total

$
33,671


$
36,302


$
(2,631
)


(7.2
)%Net premiums written

$
32,175


$
34,894


$
(2,719
)


(7.8
)%Ratio of net premiums written to direct


95.6
%


96.1
%






(0.5
)%        17




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##### Table of Contents



Loss
    and Loss Adjustment Expenses
           18




---



##### Table of Contents



Underwriting
    Expenses
    Investment
    Income
    Net
    Realized Losses
    Income
    Taxes
    Liquidity
    and Capital Resources
       19




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##### Table of Contents



and/or
    Financial
    Condition
   20




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##### Table of Contents



Statutory
    Capital and Surplus
    Reserves
    for Unpaid Losses and Loss Adjustment Expenses
      March 31,


December 31,2008


2007


Change


% Change(In thousands, except claim and per claim data)Net case reserves

$
248,417


$
252,017


$
(3,600
)


(1.4
)%Number of open claims


1,672



1,741



(69
)


(4.0
)%Average net case reserve per open claim

$
148,575


$
144,754


$
3,821



2.6
%Net IBNR reserves

$
285,246


$
281,310


$
3,936



1.4
%Total net reserves

$
533,663


$
533,327


$
336



0.1
%      21




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##### Table of Contents



Three MonthsEnded


Year EndedMarch 31, 2008


December 31, 2007(In thousansds)Beginning balance, gross

$
664,117


$
688,031Less, reinsurance recoverables


(104,648
)


(107,965
)Net reserves, beginning balance


559,469



580,066Incurred related toCurrent year


24,618



103,673Prior years


(8,420
)


(34,245
)16,198



69,428Paid related toCurrent year


245



2,699Prior years


16,921



87,32617,166



90,025Net reserves, ending balance


558,501



559,469Plus, reinsurance recoverables


102,883



104,648Ending balance, gross

$
661,384


$
664,117Development as a % of beginning net reserves


(1.5
)%


(5.9
)%    22




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##### Table of Contents



Other
    Significant Balance Sheet Items
    March 31, 2008


December 31, 2007Amount


% of Total


Amount


% of Total(In thousands)U.S. Government and government agency securities

$
99,005



11.6
%

$
145,021



16.9
%States and political subdivisions (tax-exempt) securities


326,916



38.5
%


269,013



31.2
%Corporate securities


157,457



18.5
%


193,037



22.5
%Mortgage-backed securities


152,593



18.0
%


152,892



17.8
%Total fixed-income securities


735,971



86.6
%


759,963



88.4
%Publicly traded equity securities


6,363



0.7
%


6,516



0.8
%Statutory trusts


928



0.1
%


928



0.1
%Real estate LLCs


2,550



0.3
%


2,550



0.3
%Real estate held for development


1,493



0.2
%


1,493



0.2
%Total other investments


11,334



1.3
%


11,487



1.4
%Cash and cash equivalents


102,965



12.1
%


87,498



10.2
%Total invested assets

$
850,270



100.0
%

$
858,948



100.0
%Available-for-sale fixed-income securities (at fair value)

$
257,469



35.0
%

$
262,301



34.5
%Held-to-maturity fixed-income securities (at amortized cost)


478,502



65.0
%


497,662



65.5
%Total fixed-income securities

$
735,971



100.0
%

$
759,963



100.0
%        23




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##### Table of Contents



Contractual
    Obligations and Off-Balance Sheet Arrangements
  Form 10-K Form 10-Q,
  Effects
    of New Accounting Pronouncements
    Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk  General
       24




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##### Table of Contents



Qualitative
    Information About Market Risk
    March 31, 2008


December 31, 2007Carrying


% of


Carrying


% ofRating

Value(1)


Total


Value(1)


TotalAAA

$
465,140



63.2
%

$
506,774



66.7
%AA


139,172



18.9
%


115,818



15.2
%A


88,963



12.1
%


94,078



12.4
%BBB


29,321



4.0
%


30,046



4.0
%722,596



98.2
%


746,716



98.3
%Private Placement


13,375



1.8
%


13,247



1.7
%Total

$
735,971



100.0
%

$
759,963



100.0
%Average Rating


AA+







AA+     (1)
    
    Carrying value is fair value for available-for-sale securities
    and amortized cost for held-to-maturity securities.     25




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##### Table of Contents



Quantitative
    Information About Market Risk
    March 31, 2008


December 31, 2007Portfolio


Change in


Modified


Portfolio


Change in


ModifiedChange in Rates

Value


Value


Duration


Value


Value


Duration(Dollars in thousands)


(Dollars in thousands)+2%

$
242,961


$
(14,508
)


2.85


$
248,140


$
(14,161
)


2.74+1%


250,113



(7,356
)


2.88



255,182



(7,119
)


2.820


257,469







3.15



262,301







3.06-1%


266,224



8,755



3.21



270,958



8,657



3.13-2%


275,016



17,547



3.28



279,652



17,351



3.20   Item 4.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
      Changes
    in Internal Control Over Financial Reporting
   26




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##### Table of Contents



PART II.
    OTHER INFORMATION Item 1A.  Risk
    Factors  Form 10-K
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds.    Total Number


Maximum Dollar Value ofTotal





of Shares


Shares that May Yet BeNumber of


Average


Purchased as


Repurchased Under the Plans or ProgramsShares


Price Paid


Part of Publicly


Discretionary


Rule 10b5-1Purchased


per Share


Announced Plans


Plan(a)


Plan(b)For the month ended January 31, 2008


143,000


$
40.65



143,000


$
4,764,690


$
35,844,061For the month ended February 29, 2008


140,000


$
44.48



140,000


$
25,795,414


$
33,586,148For the month ended March 31, 2008


121,000


$
43.84



121,000


$
21,760,730


$
32,316,784For the three months ended March 31, 2008


404,000


$
42.93



404,000


$
21,760,730


$
32,316,784     (a)
    
    On August 16, 2007, the Board of Directors authorized the
    repurchase of additional common shares with a cost of up to
    $20 million at managements discretion. The timing of
    the purchases and the number of shares to be bought at any time
    depend on market conditions and the Companys capital
    resources and requirements. The discretionary plan has no
    expiration date and may be terminated or discontinued at any
    time or from time to time. On February 7, 2008, the Board
    of Directors authorized an additional $25 million to
    repurchase its common shares under the Companys
    discretionary plan. The $20 million authorization from
    August 16, 2007, was completed on March 5, 2008.(b)
    
    On October 29, 2007, the Companys Board of Directors
    authorized the repurchase of an additional $20 million of
    its common shares in 2008 pursuant to a plan under
    Rule 10b5-1.
    In addition, the Board authorized the rollover into the 2008
    Rule 10b5-1
    plan of any unused dollars allocated to the 2007
    Rule 10b5-1
    plan adopted by the Board in October 2006, which totaled
    $19.4 million at December 31, 2007. The Rule 10b5-1
    plan share repurchases are made pursuant to a formula in the
    plan and are expected to continue until the entire
    authorizations are utilized, subject to conditions specified in
    the plan, but not later than December 31, 2008. The Company
    may terminate the 2008
    Rule 10b5-1
    plan at any time.  Item 4.
    Submission
    of Matters to a Vote of Security Holders    Votes


VotesNominee

For


WithheldAppaRao Mukkamala, M.D.


9,185,537



296,185Joseph Stillwel


9,169,232



312,490Spencer L. Schneider, J.D.


9,169,232



312,490   27




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##### Table of Contents



BrokerFor


Against


Abstain


Non-VotesProposal to ratify appointment of BDO Seidman,
    LLP as the Companys independent registered public
    accountants


9,457,439



20,110



4,173



   Item 6.
    Exhibits  Exhibits.
   28




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##### Table of Contents



SIGNATURES      By:
    /s/  R.
    Kevin Clinton     By:
    /s/  Frank
    H. Freund       29




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##### Table of Contents



EXHIBIT INDEX  Exhibit No.

Exhibit Description31
.1

Certification of Chief Executive Officer pursuant to Rule
    13a-14(a) under the Securities Exchange Act of 1934.31
.2

Certification of Chief Financial Officer pursuant to Rule
    13a-14(a) under the Securities Exchange Act of 1934.32


Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350 and Rule
    13a-14(b) under the Securities Exchange Act of 1934.  30