<PAGE>
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
<TABLE>
<CAPTION>
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
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.10 par value
per share ................. 200,000 shares $9.75 $1,950,000 $673
- ----------------------------------------------------------------------------------------------------
</TABLE>
* 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.
<PAGE>
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
<PAGE>
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
<PAGE>
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:
<TABLE>
<CAPTION>
<S> <C>
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)
</TABLE>
- --------------------
*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
<PAGE>
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
<PAGE>
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.
<TABLE>
<CAPTION>
Signature Capacity Date
- ----------------------------- ---------------------------------------------- --------------
<S> <C> <C>
/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
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT DESCRIPTION OF EXHIBIT PAGE NO.
- --------- ---------------------- ----------
<S> <C> <C>
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)
</TABLE>
- ------------------------------
*Filed Herewith
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
(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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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").
<PAGE>
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.
<PAGE>
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
