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SECURITIES AND EXCHANGE COMMISSION  Form 10-K/A Amendment No. 2
 FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 x
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Year Ended December 31, 2003
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
  Commission File Number: 000-32057 American Physicians
Capital, Inc.
 (Exact name of
registrant as specified in its charter)
 Michigan
    
    38-3543910(State or other jurisdiction
of
    
    (IRS employerincorporation or organization)
    
    identification number)
 1301 North Hagadorn Road, East Lansing, Michigan 48823(Address of principal executive offices)(Zip Code) Registrants telephone
number, including area code: (517) 351-1150 Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, no par value Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES x    NO o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrants knowledge, in a definitive proxy or information statement
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). YES x    NO o The aggregate market value of the Common Stock held by non-affiliates of the
Registrant as of June 30, 2003, based on $24.48 per share (the last sale price
for the Common Stock on such date as reported on the Nasdaq Stock Markets
National Market), was approximately $176.3 million. For purposes of this
computation only, all executive officers, directors and 10% beneficial owners
of the Registrant are assumed to be affiliates. As of February 24, 2004 the Registrant had 8,485,347 shares of Common Stock
outstanding. DOCUMENTS INCORPORATED BY REFERENCE
None. 1




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TABLE OF CONTENTS  PART IIIITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTITEM 11. EXECUTIVE COMPENSATIONITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESPART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-KSIGNATURESEXHIBIT INDEX302 Certification of Chief Executive Officer302 Certification of Chief Financial OfficerSection 906 Certification of CEO and CFO    Table of Contents  EXPLANATORY NOTE This amendment is being filed to include information intended to be
incorporated by reference from the definitive proxy statement. The Board of
Directors has set the date for the 2004 annual meeting of shareholders at
August 4, 2004, which will delay the filing of the definitive proxy statement
until after April 29, 2004, the date by which the definitive proxy materials
must be filed in order to incorporate the information below by reference into
the Form 10-K. 
 PART III 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. Background The Articles of Incorporation of American Physicians Capital, Inc. (the
Company or APCapital) divide the directors into three classes, designated
Class I, Class II and Class III. Each year, on a rotating basis, the terms of
office of the directors in one of the three classes expire. If elected, the
term for the Class III directors who have been nominated to stand for election
at the 2004 annual meeting of shareholders will expire at the 2007 annual
meeting of shareholders or upon the election and qualification of their
successors. The term for the Class II director who has been nominated to stand
for election at the 2004 annual meeting of shareholders will expire at the 2006
annual meeting of shareholders or upon the election and qualification of his
successor. In accordance with the Companys Bylaws, the Board of Directors has
expanded the size of the Board from seven to nine directors (three in each
class) beginning at the 2004 annual meeting of shareholders. Information with
respect to our incumbent directors and the four nominees proposed for election
in 2004 is set forth below. The Class II nominee, Mr. Kevin Clinton, is the Companys President and
Chief Executive Officer and was recommended for nomination by the Governance
Committee. One of the Class III nominees, Dr. Berglund, is currently a director
of the Company. The second Class III nominee, Mr. Gorman, is being nominated by
the Board pursuant to the terms of an agreement with Mr. Gorman. See  
Gorman Standstill Agreement. The third Class III nominee, Mr. Olson, was
recommended for nomination by Mr. Clinton. Class II Nominee for Director R. Kevin Clinton, age 49, was appointed president and chief executive
officer of the Company effective January 1, 2004. Since June 2002, Mr. Clinton
has served as president of American Physicians, the Companys largest
subsidiary. Prior to this, he served as executive vice president and chief
operating officer of the Company from October 2001 to June 2002. Prior to
joining the Company in September 2001, Mr. Clinton was president, chief
executive officer and a director of MEEMIC Holdings, Inc., a publicly traded
property and casualty insurance holding company and a subsidiary of ProNational
Insurance Company and Professionals Group, Inc., from 1997 until July 2001. Mr.
Clinton was chief financial officer at ProNational Insurance Company from 1990
to 1997. Mr. Clinton is a Fellow of the Casualty Actuarial Society. Class III Nominees For Director Thomas R. Berglund, M.D., age 70, practices family medicine in Portage,
Michigan. Dr. Berglund was a member of the Board of Directors of the Michigan
State Medical Society from 1972 to May 2001, serving as chairman from 1981 to
1985, president from 1986 to 1987 and secretary from 1988 to May 2001. He
served on the American Physicians Assurance Corporation (American Physicians)
subsidiary Board of Directors from 1985 to 2002, and has been a director and
chairman of the Companys Board since July 2000. Daniel L. Gorman, age 56, has practiced law as the sole practitioner of
the Law Offices of Daniel L. Gorman since 1977, advising clients on a wide
range of legal issues and during the same period has acted as the Town Attorney
for Vestal, New York, functioning as its house counsel. Since 1989, Mr. Gorman
has acted as an investor 2




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and legal counsel in private venture capital transactions in the value and
financial sector. From August 1999 until September 30, 2000, Mr. Gorman served
as special counsel at Chernin & Gold, a Binghamton, New York law firm. D. Joseph Olson, J.D.,age 62, joined Amerisure Insurance Companies, a
regional property and casualty insurance group, in 1997 as senior vice
president and general counsel. In November 2001 he assumed the position of
senior vice president and counsel  government relations. In May 1995, Mr.
Olson was appointed Michigan Commissioner of Insurance and served in that
position until 1997. From 1980 to 1995, he was vice president  general
counsel for Citizens Insurance Company of America, a Midwestern property and
casualty insurance carrier. He serves on the boards of the Michigan Automobile
Insurance Placement Facility and the Michigan Property and Casualty Guaranty
Association. He is a member of the state bars of Michigan and Texas. Class III Director With a Term Expiring in 2004 William B. Cheeseman, age 62, was the Companys president and chief
executive officer from July 2000 through December 2003. He was also president
and chief executive officer of American Physicians from 1999 until June 2002.
He was a director of American Physicians from May 2000 to December 2003, and
has been a director of the Company since July 2000. Mr. Cheeseman guided the
establishment of American Physicians in 1975. From 1975 until 1999, Mr.
Cheeseman was a principal in the Stratton-Cheeseman Management Company, which
managed American Physicians until being acquired by American Physicians in
1999. Mr. Cheeseman will be retiring from the Board of Directors following the
2004 annual meeting of shareholders. Class II Directors With Terms Expiring in 2006 Billy B. Baumann, M.D., age 67, is a retired pathologist and former chief
of staff at North Oakland Medical Centers, in Pontiac, Michigan. He served as
president and treasurer of the Michigan State Medical Society and was a member
of their board from 1982 to 2002. Dr. Baumann served as a member of the Board
of Directors of American Physicians from 1988 to 2002, and has been a director
of the Company since July 2000. Lloyd A. Schwartz, C.P.A.,age 75, is a certified public accountant and
has served as the deputy receiver/rehabilitator of two Michigan-based insurance
companies since 1993. Mr. Schwartz has also served as a technical reviewer for
the Michigan Association of Certified Public Accountants Peer Review Program
since 1991. Prior to 1991, Mr. Schwartz was a partner with the accounting firm
of Coopers & Lybrand LLP (now PricewaterhouseCoopers LLP), where he specialized
in audits of insurance companies. He has been a director of the Company since
July 2000. Class I Directors With Terms Expiring in 2005 Myron R. Emerick, D.O., age 71, is a physician in general practice. He was
a member of the American Physicians Board of Directors from 1985 to 2002, and
has been a director of the Company since July 2000. AppaRao Mukkamala, M.D., age 58, is a board-certified radiologist. He was
a member of the American Physicians Board of Directors from 1993 to 2002, and
has been a director of the Company since July 2000. He is currently the
treasurer of the Michigan State Medical Society and has served on its Board of
Directors since 1997. Spencer L. Schneider, J.D., age 44, is engaged in the private practice of
law in New York, New York. Opened in 1989, Mr. Schneiders law practice
includes corporate law, securities law, litigation and real estate. Mr.
Schneider is a member of the Bar of the State of New York. He has been a
director of the Company and American Physicians since February 2002. Stilwell Standstill Agreement The Company has entered into an agreement, dated February 20, 2002 (the
Stilwell Agreement), with Stilwell Value Partners, L.P. and various
affiliated entities and individuals (collectively, the Stilwell Group)
pursuant to 3




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which Spencer L. Schneider, a representative of the Stilwell Group, joined
the Companys Board of Directors and was nominated to stand for election at the
2002 annual meeting with Class I directors. At that meeting, Mr. Schneider was
elected to the Board of Directors by the affirmative vote of 8.39 million
shares (of 8.47 million voting.) The Stilwell Group had previously given notice
of its intention to nominate two persons to the Companys Board to be elected
at the 2002 annual meeting and in connection with the Stilwell Agreement
withdrew its nomination notice. Pursuant to the Stilwell Agreement, Mr. Schneider has been appointed to
the Audit Committee of the Companys Board of Directors and to the American
Physicians Board of Directors. In addition, the Company agreed that its Board
would consider, in light of all relevant factors, the Stilwell Groups proposal
to expand the Companys current share repurchase program and repurchase 15% of
the Companys outstanding common shares in each of 2002 and 2003. On October
31, 2002, the Stilwell Agreement was amended to allow the Company to calculate
the 15% repurchase requirement on December 31, 2003 from the earlier of (x)
December 31, 2002 or (y) the date on which the number of shares outstanding was
at least 15% less than the number of shares outstanding on December 31, 2001.
The Stilwell Agreement continues to provide that, in the event the Company
determines to expand its share repurchase program, the Company will not be
required to repurchase shares if the Board determines in good faith that such
action is not in the best interests of the Company or its shareholders or if
any governmental regulatory agency threatens or commences regulatory action
against the Company or any of its subsidiaries as a result of such repurchases. The Stilwell Agreement requires the Stilwell Group, during the three year
term of the Stilwell Agreement, to vote all of the Company shares that it
beneficially owns (or, if directed by the Board, pro rata with all other
shareholders) for each of the Companys nominees for election to the Board, for
the ratification of the appointment of independent auditors and, in other
matters, in accordance with the recommendation of the Companys Board. In
addition, the Stilwell Group has agreed not to engage in various activities,
such as (i) initiating a proxy contest to elect persons to the Board or to
approve shareholder proposals, (ii) initiating litigation against the Company,
its directors or officers, (iii) acquiring or retaining more than 5% of the
Companys common stock, or (iv) selling its shares unless such sales are in the
open market and are not to any persons who would beneficially own more than 5%
of the Companys outstanding shares. As disclosed in Item 12. Security Ownership Of Certain Beneficial Owners
And Management And Related Stockholder Matters  Security Ownership of
Certain Beneficial Owners and Management, the Stilwell Group owns 5.6% of the
outstanding Common Stock as of March 1, 2004. The Board of Directors is aware
of the Stilwell Groups ownership and the terms of the Stilwell Agreement, but
has determined not to take action to enforce the 5% ownership limitation
contained in the Stilwell Agreement against the Stilwell Group at this time.
While the Board reserves the right to take such action in the future, there can
be no assurance that the Board will choose to enforce this provision of the
Stilwell Agreement. Gorman Standstill Agreement The Company has entered into an agreement, dated April 7, 2004 (the
Gorman Agreement), with Daniel L. Gorman pursuant to which Mr. Gorman was
nominated to stand for election at the 2004 annual meeting with the Class III
directors. Mr. Gorman had previously given notice of his intention to nominate
himself to the Companys Board to be elected at the 2004 annual meeting and had
filed preliminary proxy materials with the Securities and Exchange Commission.
In connection with the Gorman Agreement, Mr. Gorman withdrew his nomination
notice, his preliminary proxy materials and a related demand to inspect
shareholder records. The Gorman Agreement requires Mr. Gorman, during the three year term of
the Gorman Agreement, to vote all of the Company shares that he beneficially
owns (or, if directed by the Board, pro rata with all other shareholders) for
each of the Companys nominees for election to the Board, for the ratification
of the appointment of independent auditors and, in other matters, in accordance
with the recommendation of the Companys Board. In addition, Mr. Gorman has
agreed not to engage in various activities, such as (i) initiating a proxy
contest to elect persons to the Board or withhold votes from nominees to the
Board, or to approve shareholder proposals, (ii) initiating litigation against
the Company, its directors, officers, employees or agents, (iii) acquiring or
retaining more than 5% of the 4




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Companys common stock, or (iv) selling his shares unless such sales are
in the open market and are not to any persons who would beneficially own more
than 5% of the Companys outstanding shares. The Company has agreed to
reimburse Mr. Gorman for a portion of his out of pocket expenses incurred in
connection with his proposed proxy solicitation up to a total of $17,500. Audit Committee of the Board of Directors The Companys Board has, among other committees, an Audit Committee. The
current members of the Audit Committee are Mr. Schwartz, Dr. Baumann, Mr.
Schneider and Dr. Emerick, with Dr. Baumann serving as Chair. The Board has
determined that Mr. Schwartz is an audit committee financial expert as that
term is defined under Securities and Exchange Commission Rules and that all
members of the Audit Committee satisfy all other qualifications for Audit
Committee members (including independence under Rule 4200(a)(15) of the
Nasdaq Stock Market) set forth in the applicable Nasdaq rules. Executive Officers The executive officers of the Company are elected or appointed annually
and serve as executive officers of the Company at the pleasure of the Companys
Board of Directors. The Companys current executive officers are described
below. Thomas D. Chase,age 41, has been chief information officer for the
Company since December 2002. He served as chief information officer and vice
president of business technology for the Companys workers compensation
operations from August 2002, when he joined the Company, until December 2002.
Prior to joining the Company, Mr. Chase was the chief technology officer and
vice president of business transformation for USI Insurance Services
Corporation, a national brokerage and consulting firm specializing in
commercial insurance, employee benefits and financial services, from December
2000 to 2002. From June 1999 to November 2000, Mr. Chase served as chief
architect for the U.S. Commercial Insurance Division at Royal & SunAlliance,
USA, a subsidiary of Royal & SunAlliance Insurance Group plc, an international
property, casualty and life insurance company, and was principally responsible
for coordinating the e-business architecture and infrastructure for the
companys UK and Americas regional operations. From August 1997 to June 1999,
Mr. Chase was chief architect for EBI Companies, a workers compensation
subsidiary of Orion Capital Companies, Inc. Orion Capital Companies, Inc. was
purchased by Royal & SunAlliance, USA in June 1999. From 1990 to 1997, Mr.
Chase held various information technology-related management positions with
Aetna Health Plans and Cigna Healthcare, both national insurance carriers. R. Kevin Clintons business experience is described above under  
Class II Nominee for Director. Annette E. Flood, J.D., R.N., age 44, has been the chief operating officer
of American Physicians since June 2002. She joined the Company in October 2001
as vice president of American Physicians, overseeing the Companys medical
professional liability operations. Prior to joining the Company, Ms. Flood
served as senior vice president, corporate secretary and legal counsel of
ProNational Insurance Company, a subsidiary of Professionals Group, Inc., from
1992 to 2000. Ms. Flood was the secretary of Professionals Group from 1996 to
2000. She served as secretary and a director of MEEMIC Holdings, Inc. from 1998
to July 2001. She also served as chief operating officer, secretary and
director of MEEMIC Insurance Company, a subsidiary of MEEMIC Holdings, Inc.,
from 1998 to July 2001. Frank H. Freund, C.P.A.,age 43, has been executive vice president,
treasurer and chief financial officer of the Company since July 2000. Mr.
Freund joined the Company as chief financial officer of American Physicians in
September 1997. Mr. Freunds previous employment includes working with the
Michigan practice of Deloitte & Touche LLP from October 1994 to September 1997,
serving as an audit senior manager in that firms insurance and health care
business assurance services group. Laura A. Kline,age 39, has been vice president of marketing of American
Physicians since January 2002. Ms. Kline joined the Company in 1987, and has
held various sales, marketing and management positions. Ms. Kline has 5




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also served as president of APConsulting, LLC, the alternative
risk transfer subsidiary of the Company, since November 2001. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our directors, executive officers and ten percent owners to file reports of
holdings and transactions in Company stock with the Securities and Exchange
Commission. Based solely upon a review of Forms 3, 4 and 5 and amendments
thereto and written representations furnished to the Company, the Companys
officers, directors and ten percent owners timely filed all required reports
since the beginning of 2003 pursuant to Section 16(a) of the Securities
Exchange Act of 1934, as amended (the Exchange Act), except that Ms. Annette
E. Flood, chief operating officer of American Physicians, filed one late Form 4
reporting one transaction and Mr. R. Kevin Clinton, the Companys President and
Chief Executive Officer, filed one late Form 4 in 2004 reporting a grant of
options. Code of Ethics The Company has adopted a Code of Ethics that applies to all of its
employees, executive officers and directors, including its chief executive
officer, chief financial officer and principal accounting officer. The Code of
Ethics, as currently in effect (together with any amendments that may be
adopted from time to time) is available on the Companys website at
www.apcapital.com through the For Investors, Corporate Governance links. In
the future, to the extent any waiver is granted or amendment is made with
respect to the Code of Ethics that requires disclosure under applicable
Securities and Exchange Commission rules, information regarding such waiver or
amendment will be posted on the Corporate Governance page of the Companys
website. Procedures for Candidates Recommended by Shareholders The Governance Committee will consider candidates recommended by
shareholders entitled to vote at an annual meeting of shareholders and who
comply with the notice procedures set forth in the Companys bylaws. These
procedures require that written notice of the recommendation, along with the
information required by the bylaws, must be received by the Company at its
principal executive offices, at least 90 days before the first anniversary of
the prior years annual meeting of shareholders. If the date for the annual
meeting is significantly different than the first anniversary of the prior
years annual meeting, the bylaws provide for an adjustment to the notice
periods described above. 
 ITEM 11. EXECUTIVE COMPENSATION. Summary The following table provides a summary of compensation paid or accrued by
the Company and its subsidiaries during the last three years to or on behalf of
the Companys Chief Executive Officer during 2003, the four other most highly
compensated executive officers at December 31, 2003 who earned more than
$100,000 in salary and bonus during 2003 and one former executive officer (the
Named Officers). 6




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Summary Compensation Table Long-TermCompensation AwardsAnnualCompensation
    
    RestrictedStock
    
    SecuritiesUnderlying
    
    All OtherFiscal
    
    Salary
    
    Bonus
    
    Awards
    
    Options/SARs
    
    CompensationName and Principal Position
    
    Year
    
    $
    
    $
    
    ($)(1)
    
    (#)
    
    ($)(2)William B. Cheeseman
    
    
    2003
    
    
    
    632,211
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,273,630President and Chief Executive
Officer(3)
    
    
    2002
    
    
    
    624,927
    
    
    
    
    
    
    
    132,797
    
    
    
    
    
    
    
    20,9902001
    
    
    
    606,000
    
    
    
    
    
    
    
    
    
    
    
    260,000
    
    
    
    17,642R. Kevin Clinton
    
    
    2003
    
    
    
    349,885
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,650Chief Executive Officer,
    
    
    2002
    
    
    
    328,289
    
    
    
    48,833
    
    
    
    
    
    
    
    
    
    
    
    20,505American Physicians Assurance
Corp.(4)
    
    
    2001
    
    
    
    98,077
    
    
    
    
    
    
    
    
    
    
    
    60,000
    
    
    
    Frank H. Freund
    
    
    2003
    
    
    
    299,931
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,650Executive Vice President, Treasurer
    
    
    2002
    
    
    
    289,127
    
    
    
    43,006
    
    
    
    
    
    
    
    
    
    
    
    23,755and Chief Financial Officer
    
    
    2001
    
    
    
    215,000
    
    
    
    
    
    
    
    
    
    
    
    95,000
    
    
    
    17,672Annette E. Flood
    
    
    2003
    
    
    
    199,769
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,650Chief Operating Officer,
    
    
    2002
    
    
    
    169,923
    
    
    
    21,665
    
    
    
    
    
    
    
    20,000
    
    
    
    7,488American Physicians Assurance Corp.
    
    
    2001
    
    
    
    28,846
    
    
    
    
    
    
    
    
    
    
    
    30,000
    
    
    
    Thomas D. Chase
    
    
    2003
    
    
    
    185,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,513Chief Information Officer
    
    
    2002
    
    
    
    74,711
    
    
    
    5,323
    
    
    
    
    
    
    
    19,000
    
    
    
    2001
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Loren W. Claypool
    
    
    2003
    
    
    
    76,154
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    214,313Chief Operating Officer,
    
    
    2002
    
    
    
    148,077
    
    
    
    20,000
    
    
    
    
    
    
    
    50,000
    
    
    
    Workers Compensation Operations(5)
    
    
    2001
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   (1)
    
    At December 31, 2003, Mr. Freund (the only Named Officer with restricted
shares) had 5,500 restricted shares, valued at $101,200. For 2002, the
Company granted 6,971 restricted shares to Mr. Cheeseman in lieu of a cash
bonus for 2002. The restriction would have been removed if the Company
reported positive net income for 2003. The Company reported a net loss for
2003; therefore, Mr. Cheesemans 6,971 restricted shares were forfeited to
the Company.(2)
    
    The amounts included in All Other Compensation for 2003 paid to or
contributed for the Named Officers are as follows: Name
    
    401(k)
    
    Pension
    
    Other
    
    TotalWilliam B. Cheeseman(a)
    
    $
    7,980
    
    
    $
    15,650
    
    
    $
    1,250,000
    
    
    $
    1,273,630R. Kevin Clinton
    
    
    8,000
    
    
    
    15,650
    
    
    
    
    
    
    
    23,650Frank H. Freund
    
    
    8,000
    
    
    
    15,650
    
    
    
    
    
    
    
    23,650Annette E. Flood
    
    
    8,000
    
    
    
    15,650
    
    
    
    
    
    
    
    23,650Thomas D. Chase
    
    
    7,613
    
    
    
    4,900
    
    
    
    
    
    
    
    12,513Loren W. Claypool(b)
    
    
    3,736
    
    
    
    
    
    
    
    210,577
    
    
    
    214,313
  (a)
    
    This amount was payable in accordance with Mr. Cheesemans employment
agreement as payment for the covenant not to compete. The payment was
accrued at December 31, 2003, paid in January 2004, and will be expensed
over the two year covenant period.(b)
    
    This amount was payable in accordance with Mr. Claypools termination of
employment, payable over the remainder of 2003 in bi-weekly installments.
These payments were treated as salary for purposes of determining whether
to include Mr. Claypool in the table.(3)
    
    Mr. Cheeseman retired as President and Chief Executive Officer effective
December 31, 2003.(4)
    
    The Compensation Committee approved an increase in Mr. Clintons base
salary to $437,000 effective January 1, 2004 in connection with his
appointment to the position of President and Chief Executive Officer.(5)
    
    Mr. Claypools employment with the Company was terminated on April 8,
2003. 7




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Option Holdings The following table provides information with respect to the exercisable
and unexercisable options held as of the end of 2003 by the Named Officers.
There were no option grants or option exercises during 2003. Aggregated Option/SAR Exercises In
Last Fiscal Year and Fiscal Year-End Option/SAR Values Value of Exercisable andNumber of Exercisable and
    
    Unexercised In-the-MoneyUnexercised Options/SARs at
    
    Options/SARs At FiscalFiscal Year End(#)
    
    Year End($)(1)Name
    
    Exercisable
    
    Unexercisable
    
    Exercisable
    
    UnexercisableWilliam B. Cheeseman
    
    
    216,600
    
    
    
    143,400
    
    
    $
    220,500
    
    
    $
    269,500Frank H. Freund
    
    
    85,200
    
    
    
    59,800
    
    
    
    110,250
    
    
    
    134,750R. Kevin Clinton
    
    
    39,600
    
    
    
    20,400
    
    
    
    -0-
    
    
    
    -0-Annette E. Flood
    
    
    26,400
    
    
    
    23,600
    
    
    
    11,352
    
    
    
    23,048Thomas D. Chase
    
    
    6,270
    
    
    
    12,730
    
    
    
    3,977
    
    
    
    8,073Loren W. Claypool
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
   (1)
    
    Value was determined by multiplying the number of shares
subject to an option by the difference between the closing price of
the Common Stock at the end of 2003 on The Nasdaq Stock Market and
the option exercise price. Director Compensation Retainer:During 2003 each director who was not an employee of the Company
received an annual retainer fee of $20,000. Effective September 1, 2003, the
annual retainer fee was increased to $25,000. The Chairman of the Board
received an annual fee of $30,000. Effective September 1, 2003, the Chairmen of
the Audit, Compensation and Governance Committees each received an annual
Committee Chairman retainer fee of $5,000. Meeting Fees:During 2003, each non-employee director received an
attendance fee of $1,500 for each meeting of the Board. Committee Chairmen
received $1,000 for each committee meeting attended; non-chairman committee
members received $500 for each committee meeting attended. Effective September
1, 2003, non-chairman committee members meeting fee was increased to $1,000 for
each committee meeting attended. Travel Reimbursement:The Company reimburses all directors and officers
for travel, lodging and related expenses which they incur in attending Board
and committee meetings. Stock Compensation:Under the terms of the Companys Stock Compensation
Plan, non-employee directors are eligible for stock compensation. No grants
were made to non-employee directors during 2003. Non-employee directors of the Company do not receive any additional
benefits or compensation for their Board or committee services. Employees who
serve as directors do not receive retainer or attendance fees. In 2003, Spencer Schneider was the only non-employee director of the
Company to sit on the Board of American Physicians, an insurance subsidiary of
the Company. In 2003, as a director of American Physicians, Spencer Schneider
received a fee of $1,000 for each Board meeting attended. None of the Companys
other non-employee directors sat on the Board of any of the other insurance
subsidiaries of the Company in 2003. Employment Agreements The Company, either directly or through its American Physicians
subsidiary, has employment agreements with all of its executive officers. The Company entered into an employment agreement with Mr. Cheeseman on
October 27, 1999. The agreement expires on October 27, 2009. Mr. Cheesemans
employment may be terminated before October 27, 2009 as a result of death,
retirement, disability or for cause. The agreement provided for (a) a base salary of $625,000 with such salary
increases as may from time to time be agreed to and approved by the Company,
(b) a discretionary bonus upon the attainment of certain growth and
profitability goals and personal goals and objectives, and (c) participation in
the Companys Stock Compensation Plan. During the term of the agreement and for
a period of two years after termination of active employment, Mr. Cheeseman
agreed to (i) preserve the confidentiality of the Companys trade secrets, (ii)
refrain from soliciting 8




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##### Table of Contents



customers and employees away from the Company and (iii)
refrain from competing with the Company. In consideration for these covenants,
Mr. Cheeseman is entitled to receive compensation in an amount equal to two
times the annual base salary and bonus paid to him during the year preceding
the year in which his employment is terminated. Effective December 31, 2003, Mr. Cheeseman retired as an employee,
President and Chief Executive Officer of the Company and from all other
positions he held with the Company and its subsidiaries other than as a
director of the Company; and his employment agreement terminated. In accordance
with the terms of his employment agreement, Mr. Cheeseman received a payment in
connection with his retirement equal to 200% of his then base salary.
Additionally, the Board of Directors elected to vest 17,600 previously awarded
restricted shares and, pursuant to the terms of the purchase agreement relating
to the Companys 1999 purchase of Stratton-Cheeseman Management Company, Inc.,
the $6.0 million obligation thereunder to Mr. Cheeseman became due. The
obligation was paid in full on January 2, 2004. Effective January 1, 2004, the
Company entered into a twelve month agreement with Mr. Cheeseman for certain
business and advisory consulting services. Mr. Cheeseman will receive a monthly
fee of $10,000 for such services. Options held by Mr. Cheeseman at the time of
his retirement will continue to vest during his consulting period and will not
terminate until his consulting period ends or the option otherwise expires
pursuant to its terms. Between June 2, 2003 and July 28, 2003, the Company entered into new
employment agreements with certain of its executive officers including Mr.
Clinton, Mr. Chase, Ms. Flood and Mr. Freund. Each of these employment
agreements is substantially similar in all material respects, except for title
and base salary as set forth in the following table or as otherwise indicated: Executive
    
    Title
    
    Base SalaryR. Kevin Clinton(a)
    
    President and Chief Executive Officer
(American Physicians)
    
    $
    350,000Thomas D. Chase
    
    Chief Information Officer (APCapital)
    
    $
    185,000Annette E. Flood
    
    Chief Operating Officer (American Physicians)
    
    $
    200,000Frank H. Freund
    
    Executive Vice President, Treasurer and
Chief Financial Officer (APCapital)
    
    $
    300,000
  (a)
    
    The Compensation Committee approved an increase in Mr. Clintons base
salary to $437,000 effective January 1, 2004, as a result of his
increased responsibility as President and Chief Executive Officer. Unless sooner terminated as provided therein, the agreements continue in
effect for one year. Thereafter, the term automatically extends for one
additional day for each successive day of the executives employment with the
Company unless replaced or terminated. In addition to the specific base
salaries set forth above, the agreements provide for participation in the
Companys short-term and long-term incentive plans, disability insurance,
expense reimbursement and other customary employment benefits. In the event of
(i) the involuntary termination of the executive as described in the
agreements, (ii) termination by the Company following a Change in Control or
(iii) termination by the executive for a Qualifying Reason following a
Change in Control, each as defined in the agreements, the executive is
entitled to continuation of 24 months of salary paid over 12 months (payable in
a lump-sum payment in the case of a Change in Control), bonus payments equal
to 150% (100% in the case of Mr. Chase) of the greater of (a) the full year
bonus for the calendar year in which termination occurs or (b) the average of
his or her last two annual bonuses, a lump sum payment of eighteen times the
then current monthly medical and dental coverage premiums, a $4,000 benefit
payment to be applied toward the purchase of terminated insurance coverages,
and certain other benefits. Each of these executives has agreed to preserve the
confidentiality of the Companys trade secrets, not to solicit the Companys
customers for a period of one year following termination of employment and not
to solicit the Companys employees for a period of two years following
termination of employment. Each executive also agrees not to compete with the
Company for a period of one year following termination of employment. 9




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##### Table of Contents



Compensation Committee Interlocks and Insider Participation The members of the Compensation Committee during 2003 were Mr. Schwartz,
Dr. Emerick and Dr. Mukkamala. Dr. Emerick and Dr. Mukkamala served as
non-employee officers of the Companys subsidiary, American Physicians, prior
to American Physicians conversion in 2000 and prior to their appointment to
the Compensation Committee of the Companys Board of Directors. 
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. Security Ownership of Certain Beneficial Owners and Management The following table sets forth certain information regarding the ownership
of the Common Stock as of March 1, 2004, except as otherwise indicated, by each
current director, each director nominee, each of the persons named in the
Summary Compensation Table under Item 11. Executive Compensation, all current
directors and executive officers as a group, and each person who is known by
the Company to own beneficially 5% or more of the Companys outstanding shares
of Common Stock (each, a 5% Owner). The number of shares beneficially owned
is determined under rules of the Securities and Exchange Commission, and the
information is not necessarily indicative of beneficial ownership for any other
purpose. Under such rules, beneficial ownership includes any shares as to which
the individual has sole or shared voting power or investment power and also any
shares which the individual has the right to acquire on March 1, 2004 or within
60 days thereafter through the exercise of any stock option or other right.
Unless otherwise indicated, each holder has sole investment and voting power
with respect to the shares set forth in the following table. Name
    
    Number of Shares(1)
    
    % of ClassBilly Ben Baumann, M.D.(2)
    
    
    30,600
    
    
    
    *Thomas R. Berglund, M.D.
    
    
    29,852
    
    
    
    *William B. Cheeseman(3)
    
    
    389,217
    
    
    
    4.5R. Kevin Clinton(4)
    
    
    79,600
    
    
    
    *Myron R. Emerick, D.O
    
    
    25,051
    
    
    
    *Daniel L. Gorman, Esq.(5)
    
    
    193,638
    
    
    
    2.3AppaRao Mukkamala, M.D.(6)
    
    
    38,500
    
    
    
    *D. Joseph Olson
    
    
    
    
    
    
    *Spencer L. Schneider(7)
    
    
    30,280
    
    
    
    *Lloyd A. Schwartz
    
    
    11,200
    
    
    
    *Thomas D. Chase
    
    
    6,511
    
    
    
    *Loren W. Claypool
    
    
    
    
    
    
    *Annette E. Flood
    
    
    29,900
    
    
    
    *Frank H. Freund(8)
    
    
    98,700
    
    
    
    1.2All current executive officers and directors as a group (12
persons)(2)(3)(4)(6)(7)(8)
    
    
    780,611
    
    
    
    8.7Pzena Investment Management, LLC(9)
    
    
    1,310,779
    
    
    
    15.4Boston Partners Asset Management, LLC(10)
    
    
    776,380
    
    
    
    9.2FMR Corp.(11)
    
    
    762,151
    
    
    
    9.0Dimensional Fund Advisors Inc.(12)
    
    
    572,904
    
    
    
    6.8Stilwell Value Partners V, L.P., Stilwell Associates, L.P.,
Stilwell Partners, L.P., Stilwell Value LLC, Joseph
Stilwell the managing and sole member of Stilwell Value
LLC and general partner of Stilwell Partners(13)
    
    
    473,000
    
    
    
    5.6Brandywine Asset Management, LLC(14)
    
    
    435,315
    
    
    
    5.1
   *
    
    Less than one percent.(1)
    
    Includes restricted shares subject to forfeiture to the Company under
certain circumstances which are owned by the following persons: Dr.
Baumann  5,280 shares; Dr. Berglund  7,920 shares; Dr. Emerick  5,280
shares; Dr. Mukkamala  4,400 shares; Mr. Schwartz  880 shares; Mr.
Freund  5,500 shares; and all current executive officers and directors
as a group  29,425 shares. Also includes shares that may be acquired
upon exercise of options granted by the Company by the following
persons: Dr. Baumann  7,000 10




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##### Table of Contents



shares; Mr. Cheeseman  216,600 shares; Mr.
Clinton  39,600 shares; Dr. Emerick  9,000 shares; Dr. Mukkamala 
9,000 shares; Mr. Schwartz  5,000 shares; Mr. Chase  6,270 shares; Ms.
Flood  26,400 shares; Mr. Freund  85,200 shares; and all current
executive officers and directors as a group  443,970 shares.(2)
    
    Includes 12,320 shares of Common Stock held of record by the Rachel
A. Baumann Revocable Living Trust U/A dated November 22, 1982, of which
Dr. Baumann has power of attorney. Also includes 1,000 shares of Common
Stock held of record by Rachel A. Baumann in her Individual Retirement
Account.(3)
    
    Includes 6,600 shares of Common Stock held of record by the SCW
Agency Group, Inc., a Michigan corporation, of which Mr. Cheeseman owns
a 91.1% interest. Mr. Cheeseman will cease to be a director following
the 2004 Annual Meeting of Shareholders.(4)
    
    Includes 5,268 shares of Common Stock held of record by Marilyn J.
Clinton in her Individual Retirement Account.(5)
    
    Based upon information provided by Mr. Gorman as of April 7, 2004.
Includes 183,138 shares held directly by Mr. Gorman and 10,500 shares
held by Mr. Gormans wife. See Item 10. Directors And Executive
Officers Of The Registrant  Gorman Standstill Agreement.(6)
    
    Includes 17,000 shares of Common Stock held of record by the
Mukkamala Family Ltd. Partnership, a limited partnership of which Dr.
Mukkamala is the general partner.(7)
    
    Includes 30,000 shares of Common Stock which may be acquired upon
exercise of an option granted by Stilwell Value Partners V, L.P.(8)
    
    Includes 300 shares of Common Stock held of record by Mr. Freunds
children.(9)
    
    Based on information contained in a Schedule 13G/A filed on February
12, 2004, with information as of December 31, 2003. Pzena Investment
Management, LLC is a registered investment advisor which has the sole
power to dispose or direct the disposition of all of the above shares
and the sole power to vote or direct the voting of 1,203,354 of the
above shares. The business address of Pzena Investment Management, LLC
is 120 West 45th Street, 34th Floor, New York, New York 10036.(10)
    
    Based on information contained in a Schedule 13G/A filed on February
12, 2004, with information as of December 31, 2003. Boston Partners
Asset Management, LLC is a registered investment advisor which has the
sole voting and dispositive power with respect to all of the above
shares. The business address of Boston Partners Asset Management, LLC is
28 State Street, 20th Floor, Boston, Massachusetts 02109.(11)
    
    Based on information contained in a Schedule 13G/A filed on February
17, 2004, with information as of December 31, 2003. FMR Corp. is a
parent holding company which, along with Edward C. Johnson 3d and
Abigail P. Johnson, reports that it has the sole power to dispose or
direct the disposition of all of the shares shown above. Neither FMR
Corp. nor Edward C. Johnson 3d has the sole power to vote or direct the
voting of the 762,151 shares owned by Fidelity Low Priced Stock Fund.
Voting power of these respective shares is held by the Funds Boards of
Trustees which own the shares. The business address of FMR Corp. is 82
Devonshire Street, Boston, Massachusetts 02109.(12)
    
    Based on information contained in a Schedule 13G filed on February 6,
2004, with information as of December 31, 2003. Dimensional Fund
Advisors Inc. is a registered investment advisor which has the sole
voting and dispositive power with respect to all of the above shares.
The business address of Dimensional Fund Advisors Inc. is 1299 Ocean
Avenue, 11th Floor, Santa Monica, California 90401.(13)
    
    Based on information contained in a Schedule 13D filed on November
25, 2002, with information as of November 15, 2002. The individual and
entities share the voting and dispositive power with respect to all of 11




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##### Table of Contents



the shares they own. The business address of Stilwell Value Partners
V, L.P., Stilwell Associates, L.P., Stilwell Partners, L.P., Stilwell
Value LLC and Joseph Stilwell is 26 Broadway, 23rd Floor, New York, New
York 10004. See Item 10. Directors And Executive Officers Of The
Registrant  Stilwell Standstill Agreement.  (14)
    
    Based on information contained in a Schedule 13G filed on February
17, 2004, with information as of December 31, 2003. Brandywine Asset
Management, LLC is a registered investment advisor which has shared
voting and dispositive power with respect to all of the above shares.
Voting and dispositive power is shared with various accounts managed by
Brandywine Asset Management, LLC. The business address of Brandywine
Asset Management, LLC is Three Christina Centre, Suite 1200, 201 North
Walnut Street, Wilmington, Delaware 19801. Securities Authorized for Issuance Under Equity Compensation Plans The information contained in the Equity Compensation Plan table under Item
5 of this Report is incorporated herein by reference. 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. The Company, through its subsidiaries, has a relationship with SCW Agency
Group, Inc. and its subsidiaries, an insurance agency that is 91.1% owned by
Mr. Cheeseman the Companys former President and CEO. SCW and its subsidiaries
provided sales and marketing services to the Company in 2003 in Michigan,
Illinois, Kentucky, Florida, and Nevada with respect to medical professional
liability insurance, and in Michigan, Nevada, Kentucky and other states with
respect to workers compensation. The commission rates currently paid were
substantially the same or lower than rates the Company pays to other agencies
with regard to medical professional liability and workers compensation
insurance. Direct premiums written by SCW totaled $75.3 million during 2003,
representing 29.4% of the Companys total direct premiums written during 2003.
The Company, through its subsidiaries, paid commissions on these premiums to
SCW of $6.0 million during 2003. In January 2004, the Company executed a new
5-year contract with SCW. The agreement provides for American Physicians to be
the exclusive medical professional liability carrier SCW represents in the
state of Michigan, subject to limited exceptions, such as a further downgrade
of our A.M. Best rating. However, the Company continues to have the right to
appoint other agents. SCW may continue to represent other insurance companies
in other states. The contract provides for SCW to be paid commissions
consistent with the marketplace. The terms of the new agency agreement were
determined by negotiations between the Companys management staff (under the
direction of a committee of independent directors) and SCWs management,
reviewed by independent consultants, and ultimately approved by the Companys
board of directors. In rendering its approval, the board of directors
considered the fairness of the agreed rates and determined that they were fair
to the Company based upon, among other things, an evaluation of market rates
and agreements between the Company and its other agents. Mr. Cheeseman did not
receive any compensation from SCW in 2003 in the form of a salary, dividend or
any other form of payment. 12




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##### Table of Contents



In 1999, the Company asked SCW to help the Company enter the Nevada
medical professional liability market. SCW had established operations in Nevada
in 1997. As part of its cost of entering this new market, the Company agreed to
reimburse a portion of SCWs costs from when SCW began its operations in Nevada
in October 1997, through October 1999. The costs paid by the Company, which
totaled $357,000, were to be repaid by SCW through a reduced commission on
premiums written by SCW in the state of Nevada over a period of time not to
exceed ten years. Any unpaid amounts at the end of ten years will be forgiven
by the Company. The Companys non-interest bearing receivable balance at the
beginning of 2003 was $310,000, which is the highest amount of this balance
outstanding since the beginning of 2003. As of February 29, 2004, this
non-interest bearing receivable balance totaled $284,000. The Company
established an allowance for uncollectible accounts, which totaled $286,000 at
December 31, 2003, in the event the receivable balance owed by SCW was not
repaid as a result of a reduction or elimination of premiums written in Nevada.
Accordingly, the net receivable balance at December 31, 2003 was $0. As part of
the new contract with SCW, the $310,000 receivable was forgiven in exchange for
a release from certain obligations the Company may have had to SCW in
connection with the Companys exit from Nevada. In 2003, SCW wrote $4.8 million
in direct premiums in Nevada. In 2003, SCW Agency Group, Inc. subleased a total of approximately 10,000
square feet of the office space leased by the Company in facilities in
Michigan, Illinois, Nevada and Florida. Pursuant to an unwritten arrangement
for leased space in Michigan, Nevada and Florida and a written agreement for
leased space in Illinois, between SCW and the Company, the Company charges SCW
an allocable share of the lease and related office expenses the Company incurs
under the primary leases with the third-party landlords based upon the amount
of the rented space used by SCW. The rental rate charged to SCW is the same
rate per square foot paid by the Company under the primary leases. During 2003,
SCW paid approximately $214,000 to the Company pursuant to this arrangement. In addition, at December 31, 2003, the Company was obligated to Mr.
Cheeseman in the amount of $6.0 million in connection with the 1999 purchase of
Stratton-Cheeseman Management Company, Inc. In connection with his retirement,
effective December 31, 2003, the obligation became due and was paid in its
entirety in January 2004. 
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. The accounting firm of PricewaterhouseCoopers LLP (PwC) has acted as the
Companys independent accountant to audit the financial statements of the
Company and its consolidated subsidiaries since 1983. Audit Fees.PwC billed the Company a total of $353,776 for professional
services in connection with the audit of the 2003 financial statements and
review of the financial statements contained in the Companys Form 10-Q reports
filed during 2003. PwC billed the Company a total of $263,530 for professional
services in connection with the audit of the 2002 financial statements and
review of the financial statements contained in the Companys Form 10-Q reports
filed during 2002. Audit-related Fees.PwC billed the Company a total of $58,366 for services
rendered during 2003 in connection with the audit of the pension and 401(k)
plans and internal control reviews. PwC billed the Company a total of $6,000
for services rendered in 2002 in connection with the audit of the pension and
401(k) plans. Tax Fees.PwC billed the Company a total of $28,890 for services rendered
during 2003 in connection with the preparation of the Companys 2002 federal
tax return and advice on state and local tax return preparation. PwC billed the
Company a total of $45,787 for services rendered in 2002 in connection with the
preparation of the Companys 2001 federal tax return, premium tax review and
advice on state and local tax return preparation. All Other Fees.PwC billed the Company a total of $1,400 in connection
with an on-line research service utilized in 2003. PwC billed the Company a
total of $32,572 for other services rendered during 2002. Substantially all of
the 2002 services related to consulting work for the Compensation Committee,
codification review, and an S-8 filing. 13




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##### Table of Contents



The Audit Committee of the Board does not consider the provision of the
services described above by PwC to be incompatible with the maintenance of
PwCs independence. The Audit Committee has adopted a pre-approval policy for all audit and
non-audit services pursuant to which it pre-approves all audit and non-audit
services provided by the independent auditors prior to the engagement with
respect to such services (other than certain de-minimis non-audit services). To
the extent that an engagement for audit and/or non-audit services is needed by
the Company between Audit Committee meetings, the Audit Committee chairman is
authorized by the Audit Committee to approve the required engagement on its
behalf. 14




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##### Table of Contents



PART IV 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (a)(1) and (2) Financial Statements: Report of independent auditors Consolidated balance sheets as of December 31, 2003 and 2002 Consolidated statements of income for the years ended December
31, 2003, 2002 and 2001 Consolidated statements of shareholders equity and comprehensive income
for the years ended December 31, 2003, 2002 and 2001 Consolidated statements of cash flows for the years ended
December 31, 2003, 2002 and 2001 Notes to consolidated financial statements Financial Statement Schedules:  II.
    
    Condensed financial information of registrant  III.
    
    Supplementary insurance information All other schedules for which provision is made in Regulation S-X either (i)
are not required under the related instructions or are inapplicable and,
therefore, have been omitted, or (ii) the information required is included in
the consolidated financial statements or the notes thereto that are a part
hereof. (a)(3) The exhibits included as part of this report are listed in the attached
Exhibit Index, which is incorporated herein by reference. (b) Reports on Form 8-K During the three months ended December 31, 2003, the following reports on Form
8-K were filed by the Company: Current Report on Form 8-K filed October 30, 2003 disclosing under Items 5 and
7 completion of a trust preferred pool transaction. Current Report on Form 8-K filed November 7, 2003 disclosing under Items 7 and
12 the issuance of a press release announcing a delay in the release of
financial results for the third quarter of 2003. Current Report on Form 8-K filed November 12, 2003 disclosing under Items 9 and
12 the issuance of a press release announcing financial results for the three
and nine months ended September 30, 2003 and certain other financial
information. Current Report on Form 8-K filed November 13, 2003 disclosing under Items 9 and
12 the issuance of a press release announcing financial results for the three
and nine months ended September 30, 2003 and certain other financial
information. 15




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##### Table of Contents



Current Report on Form 8-K/A filed November 14, 2003 disclosing under Item 12
the issuance of a press release announcing financial results for the three and
nine months ended September 30, 2003 and certain other financial information. Current Report on Form 8-K filed November 25, 2003 disclosing under Items 5 and
7 the issuance of a press release announcing the engagement of a financial
advisor and the issuance of a press release announcing the unwinding of a
recent trust preferred securities issuance. Current Report on Form 8-K filed December 3, 2003 disclosing under Items 5 and
7 the issuance of a press release announcing the intended retirement of its
Chief Executive Officer. Current Report on Form 8-K filed December 23, 2003 disclosing under Items 5 and
7 the issuance of a press release announcing the appointment of a new President
and Chief Executive Officer. There were no financial statements filed with these Forms 8-K. 16




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##### Table of Contents



SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to be
signed on its behalf by the undersigned thereunto duly authorized, on
April 29, 2004. AMERICAN PHYSICIANS CAPITAL, INC.By:
    
    /s/Frank H. FreundFrank H. FreundIts:
    
    Executive Vice President,
Treasurer,Chief Financial
Officer and principal accounting officer
 17




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##### Table of Contents



EXHIBIT INDEX The following documents are filed as part of this report. Those exhibits
previously filed and incorporated herein by reference are identified below.
Exhibits not required for this report have been omitted. APCapitals commission
file number is 000-32057. ExhibitNumber
    
    Description2.1
    
    Plan of Conversion, dated June 28, 2000, as amended September 22, 2000(2)3.1
    
    Articles of Incorporation(2)3.2
    
    Amended and Restated Bylaws, as amended May 7, 2003(8)4.1
    
    Indenture relating to Floating Rate Junior Subordinated Deferrable
Interest Debentures Dated as of May 15, 2003(8)4.2
    
    Indenture relating to Floating Rate Junior Subordinated Debt
Securities Dated as of May 22, 2003(8)*10.1
    
    American Physicians Capital, Inc. Stock Compensation Plan(3)10.2
    
    Stock Purchase Agreement, dated August 31, 1999, by and among American
Physicians and William B. Cheeseman and William J. Gaugier(2)10.3
    
    First Amendment, dated October 9, 2000, to Stock Purchase Agreement,
dated August 31, 1999, by and among American Physicians, William B.
Cheeseman and William J. Gaugier(2)10.4
    
    Stock Purchase Agreement between Kentucky Medical Insurance
Company and Stratton, Cheeseman & Walsh, Inc., dated March 6, 1997(2)10.5
    
    American Physicians/SCW Sales Agency Agreement (Medical Professional
Liability  Michigan Only), dated January 1, 2000(2)10.6
    
    KMIC Insurance Company Agency Agreement, dated October 13, 1998(2)*10.7
    
    Employment Agreement between William B. Cheeseman and MICOA
Management Company, Inc., dated October 27, 1999(4)10.10
    
    Agency Agreement between American Physicians and Stratton, Cheeseman,
Walsh-Nevada, Inc., dated May 25, 1999(2)10.11
    
    Sub-Agent Agreement between SCW Agency Group, Inc. and Managed Insurance
Services, Inc., dated April 11, 2000(2)10.12
    
    MSMS/American Physicians Marketing Support Agreement, effective January
1, 2000, and American Physicians(2)*10.14
    
    Executive Employment Agreement, dated as of October 11, 2000, between Frank H. Freund and American Physicians(4)*10.16
    
    Executive Employment Agreement, dated as of October 11, 2000, between Margo C. Runkle and American Physicians(4)*10.18
    
    Form of Stock Option Agreement with Directors, dated December 5, 2000(4)*10.19
    
    Form of Stock Option Agreement with Executives, dated December 5, 2000(4)*10.20
    
    Form of Restricted Stock Award with Directors, dated December 5, 2000(4)*10.21
    
    Form of Restricted Stock Award with Executives, dated December 5, 2000(4)10.22
    
    Standstill Agreement, dated February 20, 2002(5)10.23
    
    Description of unwritten sublease arrangement between American
Physicians and SCW Agency(6)*10.24
    
    Executive Employment Agreement, dated as of May 13, 2002, between
Annette Flood and American Physicians(7)*10.25
    
    Executive Employment Agreement, dated as of May 13, 2002, between
R. Kevin Clinton and American Physicians(7)10.26
    
    Amended And Restated Declaration Of Trust Dated As Of May 15, 2003 by
and among U.S. Bank National Association, American Physicians Capital,
Inc., William B. Cheeseman and Frank H. Freund(7)10.27
    
    Amended And Restated Declaration Of Trust Dated As Of May 22, 2003 of
APCapital Trust II(8)10.28
    
    Placement Agreement, dated April 25, 2003 between the Company, American
Physicians Capital Statutory Trust I, FTN Financial Capital Markets and
Keefe Bruyette & Woods, Inc.(8)
 18




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ExhibitNumber
    
    Description10.29
    
    Placement Agreement, Dated As Of May 13, 2003, with Sandler ONeill &
Partners L.P.(8)10.30
    
    Guarantee Agreement Dated As Of May 15, 2003 by and between U.S. Bank
National Association and American Physicians Capital, Inc.(8)10.31
    
    Guarantee Agreement Dated As Of May 22, 2003 by and between Wilmington
Trust Company and American Physicians Capital, Inc.(8)*10.32
    
    Executive Employment Agreement, dated as of June 2, 2003, between Thomas
Chase and American Physicians Assurance Corporation(8)*10.33
    
    Letter Agreement between William B. Cheeseman and American
Physicians Capital, Inc., Dated As Of December 23, 2003(1)*10.34
    
    Consulting Agreement between William B. Cheeseman and American
Physicians Capital, Inc., Dated As Of December 23, 2003(1)**10.35
    
    Master Agency Agreement between American Physicians Assurance
Corporation and SCW Agency Group, Inc., effective January 1, 2004(1)*10.36
    
    Form of Executive Employment Agreement(1)21.1
    
    Subsidiaries of APCapital(1)23.1
    
    Consent of PricewaterhouseCoopers LLP(1)31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a)
under the Securities Exchange Act of 1934(1)***31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a)
under the Securities Exchange Act of 1934(1)***32.1
    
    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(1)***
   *
    
    Current management contracts or compensatory plans or arrangements.**
    
    Portions of this exhibit have been omitted pursuant to APCapitals request
to the Secretary of the Securities
and Exchange Commission for confidential treatment pursuant to Rule 24b-2
under the Securities Exchange
Act of 1934, as amended.***
    
    Filed herewith. (1) Previously filed as an exhibit to this 2003 Annual Report on Form 10-K, as
amended, and incorporated herein by reference. (2) Filed as an exhibit to APCapitals Registration Statement on Form S-1 (no.
333-41136), as amended, and incorporated herein by reference. (3) Filed as an exhibit to APCapitals Registration Statement on Form S-8 (no.
333-56428) and incorporated herein by reference. (4) Filed as an exhibit to APCapitals 2000 Annual Report on Form 10-K and
incorporated herein by reference. (5) Filed as an exhibit to APCapitals Current Report on Form 8-K dated
February 21, 2002 and incorporated herein by reference. (6) Filed as an exhibit to APCapitals 2001 Annual Report on Form 10-K and
incorporated herein by reference. (7) Filed as an exhibit to APCapitals 2002 Annual Report on Form 10-K and
incorporated herein by reference. (8) Filed as an exhibit to APCapitals Quarterly Report on Form 10-Q, as
amended, for the quarterly period ended June 30, 2003 and incorporated herein
by reference. 19