EXHIBIT 10
STANDSTILL AGREEMENT
THIS STANDSTILL
AGREEMENT (“Agreement”), dated the 7th day of
April 2004, is made by and between American Physicians
Capital, Inc., a Michigan corporation (“ACAP”), and
Daniel L. Gorman (“Gorman”).
WHEREAS, ACAP and
Gorman have agreed that it is in their mutual interests to enter
into this Agreement as hereinafter described.
NOW, THEREFORE, in
consideration of the premises and the representations, warranties,
and agreements contained herein, and other good and valuable
consideration, the parties hereto mutually agree as
follows:
1. Representations
and Warranties of Gorman. Gorman hereby represents and warrants to
ACAP as follows:
a. Gorman has
beneficial ownership of 193,638 shares of common stock of ACAP and
has full and complete authority to enter into this Agreement and to
bind the entire number of shares of the common stock of ACAP which
he holds, or may hold, including any shares purchased or otherwise
acquired in the future, to the terms of this Agreement. This
Agreement constitutes a valid and binding agreement of Gorman. No
“affiliate” or “associate” (as such terms
are defined for purposes of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) of Gorman beneficially
owns any shares or rights to acquire shares of common stock of
ACAP, other than Gorman’s spouse, who owns 10,500 of the
shares of common stock beneficially owned by Gorman.
b. There are no
arrangements, agreements or understandings between Gorman and ACAP
other than as set forth in this Agreement.
c. No event has
occurred with respect to Gorman that would require disclosure in an
ACAP report or other document filed pursuant to the Securities Act
of 1933, as amended, or the Exchange Act, pursuant to Item 401(f)
of Regulation S-K.
2. Representations
and Warranties of ACAP. ACAP hereby represents and warrants to
Gorman, as follows:
a. ACAP has full
power and authority to enter into and perform its obligations under
this Agreement, and the execution and delivery of this Agreement by
ACAP has been duly authorized by the Board of Directors of ACAP
(the “Board”) and requires no further Board of
Directors or shareholder action. This Agreement constitutes a valid
and binding obligation of ACAP and the performance of its terms
does not constitute a violation of its articles of incorporation or
bylaws.
b. There are no
arrangements, agreements or understandings between Gorman and ACAP
other than as set forth in this Agreement.
3. Gorman’s
Prohibited Conduct. Gorman will not, and will cause his affiliates
or associates not to, directly or indirectly,
a. solicit (as
such term is used in the proxy rules of the Securities and Exchange
Commission) proxies or consents, or participate in any manner in
the solicitation of proxies or consents, from ACAP’s
shareholders to elect persons to the Board (or withhold votes from
nominees to the Board) or to approve shareholder proposals or
otherwise communicate with ACAP’s shareholders pursuant to
Rule 14a-1(l)(2) or Rule 14a-2 under the Exchange
Act,
b. make any public
statement critical of ACAP, its Directors or management,
c. initiate any
litigation against ACAP or any of its Directors, officers,
employees or agents, except to enforce the terms of this
Agreement,
d. make or be the
proponent of any shareholder proposal, whether pursuant to
Rule 14a-8 of the Exchange Act or otherwise,
e. acquire, offer
or propose to acquire, or agree to acquire (except, in any case, by
way of stock dividends or other distributions or offerings made
available to holders of ACAP common stock generally), directly or
indirectly, or retain ownership of any ACAP common stock, if when
taken together with the ACAP common stock beneficially owned by
Gorman would constitute more than 5% of the then outstanding shares
of ACAP; provided, however, that in the event that Gorman’s
beneficial ownership exceeds such percentage as a result of stock
repurchases by ACAP, Gorman shall, reasonably promptly after
becoming aware of such situation, dispose of a sufficient number of
shares such that the ACAP common stock beneficially owned by Gorman
does not constitute more than such percentage, and provided
further, that “beneficial ownership” shall have the
meaning ascribed thereto under Section 13(d) of the Exchange
Act,
f. make any
proposal or offer involving, or propose to enter into, or assist or
encourage any other person with respect to, directly or indirectly,
any merger, consolidation, business combination, tender or exchange
offer, sale or purchase of assets, sale or purchase of securities,
dissolution, liquidation, restructuring, recapitalization or
similar transactions of or involving ACAP; provided that nothing
herein shall limit Gorman’s ability to discuss with the
Directors through non-public communications (which may, but need
not, be at a meeting of the Board), to propose as a Director that
the Board consider any of the foregoing types of transactions and
to vote as a Director at a meeting of the Board upon any such
transaction,
g. form, join or
in any way participate in any “group” (within the
meaning of Section 13(d)(3) of the Exchange Act) with respect
to ACAP common stock,
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h. deposit any
ACAP common stock in any voting trust or subject any ACAP common
stock to any arrangement or agreement with respect to the voting of
any ACAP common stock,
i. execute any
written consent as a shareholder with respect to ACAP or its common
stock, except as set forth herein,
j. otherwise act,
alone or in concert with others, to control or seek to control or
influence or seek to influence the shareholders, management, the
Board or policies of ACAP, other than through non-public
communications with the directors of ACAP (which may, but need not,
be at a meeting of the Board); provided, that, subject to clause
(f) above, nothing herein shall limit Gorman from acting in
his capacity as a Director of ACAP in accordance with his fiduciary
duties at any meeting of the Board,
k. seek, alone or
in concert with others, (i) to call a meeting of shareholders,
(ii) representation on the Board of ACAP or its subsidiaries,
except as set forth herein, or (iii) the removal of any member
of the ACAP Board or any of its subsidiaries,
l. make any
proposal regarding any of the foregoing,
m. make or
disclose any request to amend, waive or terminate any provision of
this Agreement, or
n. take or seek to
take, or cause or seek to cause others to take, directly or
indirectly, any action inconsistent with any of the
foregoing.
4. Gorman’s
Affirmative Conduct.
a. At all meetings
of shareholders, Gorman shall vote, or cause to be voted, all of
the shares of ACAP common stock beneficially owned by him for each
of ACAP’s nominees for election to the Board, for the
ratification of the appointment of ACAP’s independent
auditors and, in other matters, in accordance with the
recommendation of the Board, or, if so directed by the Board, pro
rata with all other shareholders. Gorman shall, if requested by
ACAP, publicly support the election of each of ACAP’s
nominees for election to the Board.
b. Upon execution
of this Agreement by all the parties hereto, Gorman hereby
irrevocably withdraws (i) his Notice of Intent to Nominate
dated January 8 and January 19, 2004, (ii) his Demand for
Stock Ledger, Stockholder List and Books and Records dated
February 26, 2004 and all subsequent related requests, and
(iii) his preliminary proxy statement and form of proxy filed
with the Securities and Exchange Commission on March 26, 2004.
Gorman will inform the SEC staff no later than the date of this
Agreement that he is withdrawing his preliminary proxy statement
and form of proxy and that he does not intend to solicit proxies
for ACAP’s 2004 Annual Meeting of Shareholders, and shall
take any such action as the SEC staff may request to effectuate
such withdrawal.
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c. Gorman shall
comply with all corporate and Board policies and principles of ACAP
in force from time to time and applicable to Directors of ACAP
generally.
5. Directorship.
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