-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AwwnwMEnjEkNc5JXNRv4j3UgsgkZ0VIm+WO+gM6zYGIsIAZzlCKPVtdc6W7CRoxM i9La1B9CT3DW2xqi5p2MEQ== 0000930661-96-000739.txt : 19960703 0000930661-96-000739.hdr.sgml : 19960703 ACCESSION NUMBER: 0000930661-96-000739 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19960702 EFFECTIVENESS DATE: 19960721 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN PHYSICIANS SERVICE GROUP INC CENTRAL INDEX KEY: 0000724024 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 751458323 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-07425 FILM NUMBER: 96590315 BUSINESS ADDRESS: STREET 1: 1301 CAPITAL OF TEXAS HWY STREET 2: C-300 CITY: AUSTIN STATE: TX ZIP: 78746 BUSINESS PHONE: 5123280888 MAIL ADDRESS: STREET 1: 1301 CAPITAL OF TEXAS HIGHWAY CITY: AUTIN STATE: TX ZIP: 78746 S-8 1 FORM S-8 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 2, 1996 Registration No. 33- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________ FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 _________________ AMERICAN PHYSICIANS SERVICE GROUP, INC. (Exact name of registrant as specified in its charter) TEXAS 75-1458323 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1301 CAPITAL OF TEXAS HIGHWAY AUSTIN, TEXAS 78746 (512) 328-0888 (Address of principal executive offices, including zip code) ____________________ AMERICAN PHYSICIANS SERVICE GROUP, INC. 1995 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN (Full title of the plans) W. H. HAYES SENIOR VICE PRESIDENT-FINANCE AND SECRETARY 1301 CAPITAL OF TEXAS HIGHWAY AUSTIN, TEXAS 78746 (512) 328-0888 (Name, address and telephone number of agent for service) copy to: JIM A. WATSON HAROLD J. HERMAN II VINSON & ELKINS L.L.P. 3700 TRAMMELL CROW CENTER 2001 ROSS AVENUE DALLAS, TEXAS 75201-2975 (214) 220-7700 CALCULATION OF REGISTRATION FEE
TITLE OF PROPOSED MAXIMUM PROPOSED MAXIMUM SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF REGISTERED REGISTERED PER SHARE* OFFERING PRICE* REGISTRATION FEE - ---------------------------------------------------------------------------------------------------- Common Stock, $.10 par value per share ................. 200,000 shares $9.75 $1,950,000 $673 - ----------------------------------------------------------------------------------------------------
* Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(h) under the Securities Act of 1933, as amended, and based on the average of the high and low prices of the Common Stock reported on The Nasdaq National Market on June 27, 1996. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. --------------------------------------- The following documents have been filed with the Securities and Exchange Commission (the "Commission") by American Physicians Service Group, Inc., a Texas corporation (the "Company'), and are incorporated herein by reference and made a part hereof: (a) The Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1995; (b) The Company's Quarterly Report on Form 10-QSB for the quarter ended March 31, 1996; (c) The description of the Common Stock contained in the Company's Form 8-A, dated January 6, 1984, for registration of the Common Stock pursuant to Section 12(g) of the Exchange Act, including any amendment or report filed for the purpose of updating such description. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), subsequent to the effective date hereof and prior to the filing of a post-effective amendment hereto that indicates that all securities offered hereby have been sold or that deregisters all such securities then remaining unsold, shall be deemed to be incorporated herein by reference and to be a part hereof from the date of filing of such documents. Any statement contained herein or in any document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed to constitute a part of this Registration Statement, except as so modified or superseded. ITEM 4. DESCRIPTION OF SECURITIES. ------------------------- Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. -------------------------------------- Not applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. ----------------------------------------- Article 2.02-1 of the Texas Business Corporation Act (the "TBCA") provides that a Texas corporation shall have the power to indemnify anyone who was, is, or is threatened to be made a named defendant or respondent to any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative, or investigative, or any appeal in such an action, suit or proceeding, and any inquiry or investigation that could lead to such an action, suit, or proceeding, because such person is or was a director of the corporation, provided that (i) such person conducted himself in good faith, (ii) such person reasonably believed (A) that in the case of conduct in his official capacity as a director of the corporation that his conduct was in the corporation's best interests, and (B) in all other cases, that his conduct was at least not opposed to the corporation's best interests, and (iii) in the case of a criminal proceeding, such person has no reasonable cause to believe his conduct was unlawful. The termination of a proceeding by judgment, order, settlement, or conviction, or on a plea of nolo contendere or its equivalent, is not of itself determinative that a director is not eligible for indemnification by a corporation. Instead, a person shall be deemed to have been found liable in respect of any claim, issue or matter only after the person shall have been so adjudged by a court of competent jurisdiction after exhaustion of all appeals therefrom. A director may not be indemnified as described above for obligations resulting from a proceeding: (i) in which such person is found liable on the basis that he improperly received personal benefit, whether or not the benefit resulted from an action taken in his official capacity, or (ii) in which such person is found liable to the corporation (except that in such cases such director may be indemnified against reasonable expenses actually incurred by the director in connection with the proceeding unless the director's misconduct was willful, in which case no such indemnification shall be paid). 2 A corporation may provide indemnification as described above only if a determination of indemnification is made by (a) a majority vote of a quorum of directors who at the time of voting are not named defendants or respondents in such proceeding; (b) if such quorum cannot be obtained, by majority vote of a committee of directors, consisting solely of two or more directors who are not named as defendants or respondents in the relevant proceeding, and designated to act in the matter by a majority vote of all directors; (c) by special legal counsel selected by the board acting as described in (a), or selected by a committee established as described in (b), or, if such quorum cannot be obtained and such committee is not established, by a majority vote of all named defendants or respondents in the proceeding; or (d) by the shareholders in a vote that excludes the shares held by directors who are named defendants or respondents in the proceeding. A court may order indemnification even though certain of these conditions are not met if the court deems indemnification proper and equitable; provided, however, that the court-ordered indemnification shall be limited to reasonable expenses actually incurred by such person in connection with the proceeding if the person is found to be liable to the corporation or on the basis that he improperly received a personal benefit. A person may be indemnified by a corporation as previously described against judgments, penalties (including excise and similar taxes), fines, settlements, and reasonable expenses actually incurred by the person in connection with the proceeding, provided, that if such a person is found liable to the corporation or is liable on the basis that personal benefit was improperly received by the person, the indemnification shall be limited to reasonable expenses actually incurred by the person in connection with the proceeding and shall not be made in respect of any proceeding in which the person shall have been found liable for willful or intentional misconduct in the performance of his duty to the corporation. A corporation shall indemnify a director against reasonable expenses incurred by him in connection with the proceeding in which he is a named defendant or respondent because he is or was a director if he has been wholly successful, on the merits or otherwise, in the defense of the proceeding. In addition, if a director sues a corporation to recover indemnification in such a case, the court, upon ordering the corporation to pay indemnification, shall also award the director his expenses incurred in securing the indemnification. A corporation may pay, or reimburse a director for, the director's reasonable expenses incurred because he was, is, or is threatened to be made a named defendant or respondent in a proceeding, in advance of any final disposition of the proceeding and without any determination that the director is entitled to such payment or reimbursement under the above-described standards if the director gives the corporation a written affirmation by the director that in good faith he believes that he is eligible for indemnification under Article 2.02-1 of the TBCA and a written undertaking by or on behalf of the director (which must be an unlimited general obligation but that need not be secured, and that may be accepted without reference to the director's financial ability to pay) to repay the amount paid or reimbursed if it is ultimately determined that indemnification for such expenses is prohibited under the standards enumerated above. Notwithstanding the above, a corporation may pay or reimburse a director for expenses incurred in connection with the director's appearance as a witness or other participation in a proceeding at a time when the director is not a named defendant or respondent in the proceeding. Article 2.02-1 of the TBCA permits the purchase and maintenance of insurance or another arrangement on behalf of directors, officers, employees and agents of the corporation against any liability asserted against or incurred by them in any such capacity or arising out of the person's status as such, whether or not the corporation itself would have the power to indemnify any such officer or director against such liability; provided, that if the insurance or other arrangement is with a person or entity that is not regularly engaged in the business of providing insurance coverage, the insurance or arrangement may provide for payment of a liability with respect to which the corporation would not have the power to indemnify the person only if including coverage for the additional liability has been approved by the shareholders of the corporation. Any indemnification of, or advance of expenses to, a director must be reported in writing to shareholders prior to the notice or waiver of notice of the next shareholders' meeting or other action, and, in any case, within the 12-month period immediately following such indemnification or advance. A corporation may indemnify officers and others who are not officers, employees, or agents of the corporation, but who are serving at the corporation's request as a director, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary for another entity, to the same extent that the corporation indemnifies 3 directors. A corporation may indemnify and advance expenses to such officers and other persons to the same extent that it may indemnify, or advance expenses to, directors. Article IX of the Registrant's Restated Articles of Incorporation (the "Articles") provides that, to the extent permitted by applicable law and by resolution or other proper action of the Board of Directors of the Registrant, the Registrant will indemnify its present and former directors and officers, its employees and agents and any other person serving at the request of the Registrant as a director, trustee, officer, employee or agent of another corporation, partnership, joint venture, association, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any threatened, pending or completed action, suit or proceeding to which any such person is, or is threatened to be made, a party and which may arise by reason of the fact he is or was a person occupying any such office or position. In addition, the Registrant currently maintains directors and officers liability insurance. Article XVI of the Articles provides that the Registrant's directors shall not be liable to the Registrants or its shareholders for monetary damages for an act or omission in the director's capacity as a director except for liability based upon (i) a breach of duty of loyalty to the Registrant or its shareholders, (ii) an act or omission not in good faith or that involves intentional misconduct or a knowing violation of law, (iii) a transaction from which a director received an improper benefit, whether or not the benefit resulted from an action taken within the scope of the director's office, or (iv) an act related to an unlawful stock repurchase or payment of a dividend. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. ----------------------------------- Not applicable. ITEM 8. EXHIBITS. -------- Unless otherwise indicated below as being incorporated by reference to another filing of the Company with the Commission, each of the following exhibits is filed herewith:
4.1* -- American Physicians Service Group, Inc. 1995 Non-employee Director Stock Option Plan 4.2* -- Non-Employee Directors' Stock Option 4.3 -- Specimen of Common Stock Certificate (incorporated by reference to the Company's Registration Statement on Form S-1, File No. 2-85321) 5* -- Opinion of Vinson & Elkins L.L.P. 23.1* Consent of KPMG Peat Marwick LLP 23.2* -- Consent of Vinson & Elkins L.L.P. (included in its opinion filed as Exhibit 5 hereto) 24.1* -- Power of Attorney (see signature pages hereto)
- -------------------- *Filed Herewith ITEM 9. UNDERTAKINGS. ------------ The Company hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by section 10(a)(3) of the Securities Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post- effective amendment thereof) which, individually or in the 4 aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) ((S) 230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the registration statement is on Form S-3 ((S) 239.13 of this chapter) or Form S-8 ((S) 239.16b of this chapter), and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act, each filing of the Company's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing on an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act)that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (5) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. 5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Austin, State of Texas, on the 28th day of June, 1996. AMERICAN PHYSICIANS SERVICE GROUP, INC. By: /s/ W. H. Hayes --------------------------------- W. H. Hayes, Senior Vice President-Finance, Secretary and Chief Financial Officer Each person whose signature appears below authorizes W. H. Hayes and Kenneth S. Shifrin, and each of them, each of whom may act without joinder of the other, to execute in the name of each such person who is then an officer or director of the Company and to file any amendments to this Registration Statement necessary or advisable to enable the Company to comply with the Securities Act of 1933, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, in connection with the registration of the securities which are the subject of this Registration Statement, which amendments may make such changes in the Registration Statement as such attorney may deem appropriate. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following person in the capacities and on the date indicated.
Signature Capacity Date - ----------------------------- ---------------------------------------------- -------------- /s/ Kenneth S. Shifrin Chairman of the Board and Chief Executive June 28, 1996 - ----------------------------- Officer Kenneth S. Shifrin (Principal Executive Officer) /s/ W. H. Hayes Senior Vice President - Finance, Secretary June 28, 1996 - ----------------------------- and W. H. Hayes Chief Financial Officer (Principal Financial Officer) /s/ Thomas R. Solimine Controller June 28, 1996 - ----------------------------- (Principal Accounting Officer) Thomas R. Solimine /s/ Jack R. Chandler Vice Chairman of the Board and Director June 29, 1996 - ----------------------------- Jack R. Chandler, M.D. /s/ Richard J. Clark Director June 29, 1996 - ----------------------------- Richard J. Clark Director June __, 1996 - ----------------------------- Jack Murphy /s/ William A. Searles Director June 28, 1996 - ----------------------------- William A. Searles /s/ Robert L. Myer Director June 28, 1996 - ----------------------------- Robert L. Myer
EXHIBIT INDEX
SEQUENTIAL EXHIBIT DESCRIPTION OF EXHIBIT PAGE NO. - --------- ---------------------- ---------- 4.1* - American Physicians Service Group, Inc. 1995 Non-employee Director Stock Option Plan 4.2* - Non-Employee Directors' Stock Option 4.3 - Specimen of Common Stock Certificate (incorporated by reference to the Company's Registration Statement on Form S-1, File No. 2-85321) 5* - Opinion of Vinson & Elkins L.L.P. 23.1* Consent of KPMG Peat Marwick LLP 23.2* - Consent of Vinson & Elkins L.L.P. (included in its opinion filed as Exhibit 5 hereto) 24.1* - Power of Attorney (see signature pages hereto)
- ------------------------------ *Filed Herewith EX-4.1 2 1995 NON EMPLOYEE DIRECTOR STOCK OPTION PLAN 1995 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN OF AMERICAN PHYSICIANS SERVICE GROUP, INC. A Texas Corporation I. Purpose of Plan The 1995 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN (the "Plan") is intended to promote the interests of American Physicians Service Group, Inc., a Texas corporation (the "Company"), and its stockholders by helping to award and retain highly-qualified independent directors, and allowing them to develop a sense of proprietorship and personal involvement in the development and financial success of the Company. Accordingly, the Company shall grant to directors of the Company who are not employees of the Company or any of its subsidiaries ("Non- Employee Directors") the option ("Option") to purchase shares of the common stock, $0.10 par value per share, of the Company ("Common Stock"), as hereinafter set forth. Options granted under this Plan shall be options which do not constitute incentive stock options, within the meaning of section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code"). II. Grant of Options Options may be granted only to individuals who are Non-Employee Directors of the Company and who are members of the Committee under the Company's Incentive Stock Option Plan (the "Committee"). On the date on which a Non- Employee Director is first elected or appointed as a member of the Committee, he or she (the "Optionee") shall be granted an Option to purchase 30,000 shares of Common Stock. Each Optionee shall be automatically granted options to purchase 30,000 shares of Common Stock on each anniversary of his/her appointment to the Committee. For purposes of this Article II, each Non-Employee Director who is also a member of the Committee in office on the effective date of this Plan shall be deemed to have been first elected at such date. If, as of any date that this Plan is in effect, there are not sufficient shares of Common Stock available under the Plan to allow for the grant to each Non-Employee Director of an option for the number of shares provided herein, this Plan shall terminate as provided in Article X hereof. All Options granted under this Plan shall be at the option price set forth in Article V hereof and shall be subject to adjustment as provided in Article VII hereof. 1 III. Shares Subject to Plan The aggregate number of shares of Common Stock that may be issued pursuant to Options granted under this Plan shall not exceed 200,000 shares of Common Stock (subject to adjustment as provided in Article VII). Such shares may consist of authorized but unissued shares of Common Stock or previously issued shares of Common Stock reacquired by the Company. Any of such shares which remain unissued and which are not subject to outstanding Options at the termination of this Plan shall cease to be subject to this Plan, but, until termination of this Plan, the Company shall at all times make available a sufficient number of shares to meet the requirements of this Plan. Should any Option hereunder expire or terminate prior to its exercise in full, the shares of Common Stock theretofore subject to such Option may again be subject to an Option granted under this Plan to the extent permitted under Rule 16b-3. The aggregate number of shares which may be issued under this Plan shall be subject to adjustment as provided in Article VII hereof. Exercise of an Option in any manner shall result in a decrease in the number of shares of Common Stock which may thereafter be available, both for purposes of the Plan and for sale to any one individual, by the number of shares as to which the Option is exercised. IV. Option Agreements Each Option shall be evidenced by a written agreement in the form attached hereto as Exhibit A. V. Option Price The purchase price for a share of Common Stock issued under each Option granted pursuant to this Plan shall be the fair market value for the Common Stock at the time the Option is granted. For all purposes under the Plan, the fair market value of a share of Common Stock on a particular date shall be equal to the average of the high and low sales prices of the Common Stock (i) reported by the National Market System of NASDAQ on that date or (ii) if the Common Stock is listed on a national stock exchange, reported on the stock exchange composite tape on that date; or, in either case, if no prices are reported on that date, on the last preceding date on which such prices of the Common Stock are so reported. If the Common Stock is traded over the counter at the time a determination of its fair market value is required to be made hereunder, its fair market value shall be deemed to be equal to the average between the reported high and low or closing bid and ask prices of the Common Stock on the most recent date on which the Common Stock was publicly traded. In the event the Common Stock is not publicly traded at the time a determination of its value is required to be made hereunder, the determination of its fair market value shall be made by the Committee in such manner as it deems appropriate. 2 VI. Options Nontransferable Each Option and all rights granted thereunder shall not be transferable other than by will or the laws of descent and distribution, and shall be exercisable during the Optionee's lifetime only by the Optionee or the Optionee's guardian or legal representative; provided, however, that on and after the date the Corporation elects to have this Plan governed under the amendments to Rule 16b-3 effective on or after May 1, 1991, this Plan shall be deemed to be amended to limit the transferability of Options, including any exceptions thereto, to the same extent provided by Rule 16b-3 as so amended. VII. Recapitalization or Reorganization In the event of a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, an appropriate and proportionate adjustment shall be made in the number of shares of Common Stock for which Options may be granted pursuant to Article III hereof. A corresponding change shall be made to the number and kind of shares, and the exercise price per share, of unexercised Options. VIII. Merger, Consolidation or Dissolution of Corporation Following the merger of one or more corporations into the Corporation, or any consolidation of the Corporation and one or more corporations in which the Corporation is the surviving corporation, the exercise of Options under this Plan shall apply to the shares of the surviving corporation. Not withstanding any other provision of this Plan, all Options under this plan shall terminate on the dissolution or liquidation of the Corporation, or on any merger or consolidation in which the Corporation is not the surviving corporation. IX. Term of Plan This Plan shall be effective on approval by the shareholders of the Corporation in the manner required by Rule 16b-3. Except with respect to Options then outstanding, if not sooner terminated under the provisions of Article VIII or Article X, the Plan shall terminate upon and no further Options shall be granted as of the date the remaining number of shares of Common Stock which may be issued under the Plan pursuant to Article IV is not sufficient to cover the Options required to be granted under Article III. 3 X. Amendment and Termination of Plan The Board in its discretion may terminate this Plan at any time with respect to any shares of Common Stock for which Options have not theretofore been granted. The Board shall have the right to alter or amend this Plan or any part hereof from time to time; provided, that this Plan shall not be amended more than once every six months, other than to comport with changes in the Code, the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder; and provided, further, that no change in any Option heretofore granted may be made which would impair the rights of an Optionee without the consent of such Optionee; and provided, further, that the Board may not make any alteration or amendment which would materially increase the benefits accruing to participants under this Plan, increase the aggregate number of shares which may be issued pursuant to the provisions of this Plan, change the class of individuals eligible to receive Options under this Plan or extend the term of this Plan, without the approval of the Stockholders of the Company. XI. Compliance with Section 16 It is intended that this Plan and any grant of an Option made to a person subject to Section 16 of the Securities Exchange Act of 1934, as amended ( the "1934 Act") meet all of the requirements of Rule 16b-3, as currently in effect or as hereinafter modified or amended ("Rule 16b-3"), promulgated under the 1934 Act. If any provision of this Plan or any such Option would disqualify this Plan or such Option under, or would otherwise not comply with, Rule 16b-3, such provision or Option shall be construed or deemed amended to conform to Rule 16b-3. By: ______________________________________ Chairman & Chief Executive Officer 4 EX-4.2 3 NON EMPLOYEE DIRECTOR STOCK OPTION AGREEMENT NON-EMPLOYEE DIRECTOR --------------------- STOCK OPTION AGREEMENT ---------------------- THIS STOCK OPTION AGREEMENT (the "Agreement") is made effective as of ______________, by and between American Physicians Service Group, Inc. a Texas corporation (the "Company"), and ___________ ("Director"). To carry out the purposes of the 1995 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN (the "Plan"), a copy of which is attached hereto as Exhibit A, by affording Director the opportunity to purchase shares of common stock, par value $0.10 per share, of the Company ("Common Stock"), and in consideration of the mutual agreements and other matters set forth herein and in the Plan, the Company and Director hereby agree as follows: 1. Grant of Option. The Company hereby grants Director the right, privilege ---------------- and option (the "Option") to purchase ______ shares of Common Stock ("Option Shares") at the purchase price of $____ per share (the "Option Price"), in the manner and subject to the conditions hereinafter provided. This Option shall not be treated as an incentive stock option within the meaning of section 422(b) of the Internal Revenue Code of 1986, as amended. 2. Time and Exercise of Option. Subject to the limitations contained herein, ---------------------------- the aforesaid Option may be exercised at any time, and from time to time, in whole or in part, during the period ending five (5) years from the date of this agreement or until the termination thereof as provided in Section 4 below. 3. Method of Exercise. The Option shall be exercised by written notice ------------------- directed to the Company, at the Company's principal place of business, addressed to the attention of its President, specifying the number of shares of Common Stock purchased and accompanied by payment of the option price in a form suitable to the Company. With the consent of the Option Committee, such payment may be in the form of shares of Company stock owned by the Optionee immediately prior to the exercise of the Option. (a) This option is exercisable with respect to the shares in cumulative annual installments as indicated below: Date Number of Shares ---- ---------------- 1 (b) The Company shall make immediate delivery of such shares, provided that if any law or regulation requires the Company to take any action with respect to the shares specified in such notice before the issuance thereof, then the date of delivery of such shares shall be extended for the period necessary to take such action. (c) The Option may be exercised within the above limitations and subject to the limitations contained within this section, as to any part or all of the shares covered thereby; provided, however, that the Option may not be exercised as to less than 1,000 shares at any one time (or the remaining shares then purchasable under the Option, if less than 1,000 shares). 4. Termination of Option. Except as herein otherwise stated, the Option, to ---------------------- the extent not heretofore exercised, shall terminate upon the first to occur of the following dates: (a) The expiration of the option priced as set out in item #2 of this agreement. (b) If Director's membership on the Board of Directors of the Company (the "Board") terminates for cause or voluntarily by Director not at the request of the Board, this Option may be exercised by Director at any time during the period of three months following such termination, or by Director's estate (or the person who acquires this option by will or the laws of descent and distribution or otherwise by reason of the death of Director) during a period of one year following Director's death if Director dies during such three-month period, but in each case only as the number of shares Director was entitled to purchase hereunder upon exercise of this Option as of the date Director's membership on the Board so terminates. For purposes of this Agreement, "cause" shall mean Director's gross negligence or willful misconduct in performance of his duties as a director, or Director's final conviction of a felony or of a misdemeanor involving moral turpitude. (c) If Director's membership on the Board terminates by reason of disability, this Option may be exercised in full by Director (or Director's guardian or legal representative or Director's estate or the person who acquires this Option by will or the laws of descent and distribution or otherwise by reason of the death of Director) at any time during the period of one year following such termination. (d) If Director dies while a member of the Board, Director's estate, or the person who acquires this Option by will or the laws of descent and distribution or otherwise by reason of the death of Director, may exercise this Option in full at any time during the period of one year following the date of Director's death. (e) If Director's membership on the Board terminates for any reason other than as described in (a), (b) or (c) above, this Option may be exercised in full by Director at any time during the period of three months following such termination, or by Director's estate ( or the person who acquires this Option by will or the laws of descent and distribution or otherwise by reason of the death of Director) during a period of one year following Director's death if 2 Director dies during such three-month period. This Option shall not be exercisable in any event after the expiration of ten years from the date of grant hereof. The purchase price of shares as to which this Option is exercised shall be paid in full at the time of exercise (A) in cash (including check, bank draft or money order payable to the order of the Company), (B) by delivering to the Company shares of Common Stock having a fair market value equal to the purchase price, or (C) any combination of cash or Common Stock. No fraction of a share of Common Stock shall be issued by the Company upon exercise of an Option or accepted by the Company in payment of the purchase price thereof; rather, Director shall provide cash payment for such amount as is necessary to effect the issuance and acceptance of only whole shares of Stock. Unless and until a certificate or certificates representing such shares shall have been issued by the Company to Director, Director (or the person permitted to exercise this Option in the event of Director's death) shall not be or have any of the rights or privileges of a shareholder of the Company with respect to shares acquirable upon an exercise of this Option. 5. Withholding of Tax. To the extent that the exercise of this Option or the ------------------- disposition of shares of Common Stock acquired by exercise of this Option results in compensation income to Director for federal or state income tax purposes, Director shall deliver to the Company at the time of such exercise or disposition such amount of money or shares of Common Stock as the company may require to meet its obligation under applicable tax laws or regulations, and, if Director fails to do so, the Company is authorized to withhold from any cash or Common Stock remuneration then or thereafter payable to Director any tax required to be withheld by reason of such resulting compensation income. Upon an exercise of this Option, the Company is further authorized in its discretion to satisfy any such withholding requirement out of any cash or shares of Common Stock distributable to Director upon such exercise. 6. Reclassification, Consolidation or Merger. If all or any portion of the ------------------------------------------ Option shall be exercised subsequent to any share dividend, split-up, recapitalization, merger, consolidation, combination or exchange of shares, separation, reorganization or liquidation occurring after the date hereof, as a result of which shares of any class of the capital stock of the Company shall be issued in respect of the then issued and outstanding Common Stock, or Common Stock shall be changed into the same or a different number of shares of the same or another class or classes of the capital stock of the Company, the person or persons so exercising the Option shall receive, for the aggregate price paid upon such exercise, the aggregate number and class of shares of the capital stock of the Company which, if Common Stock (as authorized at the date hereof) had been purchased immediately prior to such event at the price per share set forth in Section 1 hereof, such person or persons would be holding at the time of such exercise; provided, however, that no fractional share shall be issued upon any such exercise, and the aggregate price paid shall be appropriately reduced on account of any fractional shares not issued. No adjustment shall be made in the minimum number of shares which may be purchased at any one time, as fixed by Subsection 3(c) hereof. 3 7. Rights Prior to Exercise of Option. This Option is not transferable by ----------------------------------- Director, except in the event of his/her death as provided in Subsection 4(c) above, and during his/her lifetime is exercisable only by him/her. Director shall have no rights as a shareholder with respect to the Option Shares until payment of the Option Price and delivery to him/her of such shares as herein provided. 8. Status of Stock. The Company intends to register for issuance under the ---------------- Securities Act of 1933, as amended (the "Act"), the shares of Common Stock acquirable upon exercise of this Option, and to keep such registration effective throughout the period this Option is exercisable. In the absence of such effective registration or an available exemption from registration under the Act, issuance of shares of Common Stock acquirable upon exercise of this Option will be delayed until registration of such shares is effective or an exemption from registration under the Act is available. The Company intends to use all reasonable efforts to ensure that no such delay will occur. In the event exemption from registration under the Act is available upon an exercise of this Option, Director (or the person permitted to exercise this Option in the event of Director's death or incapacity), if requested by the Company to do so, will execute and deliver to the Company in writing an agreement containing such provisions as the Company may require to assure compliance with applicable securities laws. Director agrees that the shares of Common Stock which Director may acquire by exercising this Option will not be sold or otherwise disposed of in any manner which would constitute a violation of any applicable federal or state securities laws. Director also agrees (i) that the certificates representing the shares of Common Stock purchased under this Option may bear such legend or legends as the Company deems appropriate in order to assure compliance with applicable securities laws, (ii) that the Company may refuse to register the transfer of the shares of Common Stock purchased under this Option on the stock transfer records of the Company if such proposed transfer would in the opinion of counsel satisfactory to the Company constitute a violation of any applicable securities law and (iii) that the Company may give related instructions to its transfer agent if any, to stop registration of the transfer of the shares of Common Stock purchased under this Option. 9. Modification and Waiver. Except for the Plan, this Agreement constitutes ------------------------ the entire agreement between the parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations and understandings of the parties. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the party to be charged therewith. No waiver of any of the provisions of this Agreement shall be deemed, or shall constitute a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. 10. Applicable Law and Venue. This Agreement has been executed by the Company ------------------------- at, and shall be deemed to be performable in, Travis County, Texas. For these and other reasons, the parties agree that this Agreement shall be governed by and construed in accordance with the laws of the State of Texas. 4 11. Jurisdiction. The parties agree that the courts of the State of Texas,. ------------- and any courts whose jurisdiction is derivative on the jurisdiction of the courts of the State of Texas, shall have exclusive personal jurisdiction over all parties to this Agreement. 12. Headings. The subject headings of the sections of this Agreement are --------- included for purposes of convenience only, and shall not affect the construction or interpretation of any of its provisions. 13. Counterparts. This Agreement may be executed simultaneously in one or more ------------- identical counterparts, each of which for all purposes shall be deemed an original, and all of which shall constitute, collectively, one instrument; but in making proof of this Agreement, it shall not be necessary to produce or account for more than one executed counterpart. IN WITNESS WHEREOF, the parties to this Agreement have duly executed it on the dates indicated below, to be effective, however, as of the date first hereinabove written. AMERICAN PHYSICIANS SERVICE GROUP, INC. Date: ____________________________ By: __________________________ Kenneth S. Shifrin Chairman of the Board OPTIONEE Date: ___________________________ By: __________________________ Name __________________________ Address __________________________ Address __________________________ Social Security Number 5 EX-5 4 OPINION OF VINSON & ELKINS EXHIBIT 5 VINSON & ELKINS ATTORNEYS AT LAW VINSON & ELKINS L.L.P. 3700 TRAMMELL CROW CENTER 2001 ROSS AVENUE DALLAS, TEXAS 75201-2975 TELEPHONE (214) 220-7700 VOICE MAIL (214) 220-7999 FAX (214) 220-7716 June 28, 1996 American Physicians Service Group, Inc. 1301 Capitol of Texas Highway Austin, TX 78746 Ladies and Gentlemen: We have acted as counsel for American Physicians Service Group, Inc., a Texas corporation (the "Company"), in connection with the Company's registration under the Securities Act of 1933, as amended (the "Act"), of 200,000 shares of common stock, par value $.10 per share (the "Shares"), of the Company pursuant to the Company's Registration Statement on Form S-8 (the "Registration Statement") to be filed with the Securities and Exchange Commission (the "Commission") on July 2, 1996. In reaching the opinions set forth herein, we have examined and are familiar with originals or copies, certified or otherwise identified to our satisfaction, of such documents and records of the Company and such statutes, regulations and other instruments as we deemed necessary or advisable for purposes of this opinion, including (i) the Registration Statement, (ii) the Amended and Restated Articles of Incorporation of the Company, as filed with the Secretary of State of the State of Texas, (iii) the Amended and Restated By-Laws of the Company, and (iv) certain minutes of meetings of, and resolutions adopted by, the Board of Directors of the Company. We have assumed that (i) all information contained in all documents we reviewed is true, correct and complete, (ii) all signatures on all documents we reviewed are genuine, (iii) all documents submitted to us as originals are true and complete, (iv) all documents submitted to us as copies are true and complete copies of the originals thereof, and (v) all persons executing and delivering the documents we examined were competent to execute and deliver such documents. In addition, we have assumed that, upon exercise of the stock options pursuant to which the Shares will be issued (the "Options"), (i) the Shares will be issued in accordance with the Company's 1995 Non-Employee Director Stock Option Plan, (ii) the full consideration for each Share shall be paid to the Company and in no event will be less than the par value for each Share, and (iii) certificates evidencing the Shares will be properly executed and delivered by the Company in accordance with the Texas Business Corporation Act (the "TBCA"). American Physicians Service Group, Inc. Page 2 June 28, 1996 Based on the foregoing and having due regard for the legal considerations we deem relevant, we are of the opinion that the Shares, when issued by the Company upon exercise of the Options in accordance with the 1995 Non-Employee Director Stock Option Plan, will be legally issued, fully paid and non- assessable. This opinion is limited in all respects to the laws of the State of Texas, the TBCA and the federal laws of the United States of America. This opinion letter may be filed as an exhibit to the Registration Statement. In giving this consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder. Very truly yours, /s/ Vinson & Elkins L.L.P. EX-23.1 5 CONSENT OF KPMG PEAT MARWICK EXHIBIT 23.1 ------------ INDEPENDENT AUDITORS' CONSENT ----------------------------- The Board of Directors American Physicians Service Group, Inc.: We consent to the use of our report incorporated herein by reference. /s/ KPMG Peat Marwick LLP Austin, Texas July 1, 1996 -----END PRIVACY-ENHANCED MESSAGE-----