SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
SCHEDULE 13D
(Rule 13d-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Coastal Physician Group, Inc.
(formerly known as Coastal Healthcare Group, Inc.)
--------------------------------------------------
(Name of Issuer)
Common Stock, par value $.01 per share
--------------------------------------------------
(Title of Class of Securities)
19049510
--------------------------------------------------
(CUSIP Number)
Steven M. Scott, M.D.
3711 Stoneybrook Drive
Durham, North Carolina 27705
(919) 383-0355
-------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
With a copy to:
Daniel E. Stoller, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
(212) 735-3000
------------------------------------------------
June 9, 1997
------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box ( ).
Check the following box if a fee is being paid with this
statement ( ). (A fee is not required only if the filing person:
(1) has a previous statement on file reporting beneficial
ownership of more than five percent of the class of securities
described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7).
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are sent.
The information required in the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934, as amended (the "Act") or
otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however,
see the Notes).
CUSIP NO. 19049510 13D
---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Steven M. Scott, M.D.
---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) (X)
(b) ( )
---------------------------------------------------------------------
3 SEC USE ONLY
---------------------------------------------------------------------
4 SOURCE OF FUNDS
PF
---------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS ( )
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
---------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 17,762,744 Common Shares
SHARES ------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 654,909 Common Shares
REPORTING ------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
17,762,744 Common Shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
654,909 Common Shares
---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
18,417,653 Common Shares
---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES ( )
---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
52.3%
---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Scott Medical Partners, L.P.
---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) (X)
(b) ( )
---------------------------------------------------------------------
3 SEC USE ONLY
---------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
---------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS ( )
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Tennessee
---------------------------------------------------------------------
7 SOLE VOTING POWER
5,434,977 Common Shares
NUMBER OF -----------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 Common Shares
EACH -----------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 5,434,977 Common Shares
-----------------------------------------------------
10 SHARED DISPOSITIVE POWER
0 Common Shares
---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,434,977 Common Shares
---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES ( )
---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.4%
---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Signal Fund, L.P.
---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) (X)
(b) ( )
---------------------------------------------------------------------
3 SEC USE ONLY
---------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
---------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS ( )
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
---------------------------------------------------------------------
6 CITiZENSHIP OR PLACE OF ORGANIZATION
Tennessee
---------------------------------------------------------------------
7 SOLE VOTING POWER
815,000 Common Shares
NUMBER OF ------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 Common Shares
EACH ------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 815,000 Common Shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0 Common Shares
---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
815,000 Common Shares
---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES ( )
---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.3%
---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Steven M. Scott Family Limited Partnership
---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) (X)
(b) ( )
---------------------------------------------------------------------
3 SEC USE ONLY
---------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
---------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS ( )
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Tennessee
---------------------------------------------------------------------
7 SOLE VOTING POWER
535,766 Common Shares
NUMBER OF ------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 Common Shares
EACH ------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 535,766 Common Shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0 Common Shares
---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
535,766 Common Shares
---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES ( )
---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.5%
---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Century American Insurance Company
---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) (X)
(b) ( )
---------------------------------------------------------------------
3 SEC USE ONLY
---------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
---------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS ( )
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Tennessee
---------------------------------------------------------------------
7 SOLE VOTING POWER
303,334 Common Shares
NUMBER OF ------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 Common Shares
EACH ------------------------------------------------------
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH
303,334 Common Shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0 Common Shares
---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
303,334 Common Shares
---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* ( )
---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.9%
---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Scott Family Foundation, Inc.
---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) (X)
(b) ( )
---------------------------------------------------------------------
3 SEC USE ONLY
---------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
---------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS ( )
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Florida
---------------------------------------------------------------------
7 SOLE VOTING POWER
39,110 Common Shares
NUMBER OF ------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 Common Shares
EACH ------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 39,110 Common Shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0 Common Shares
---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
39,110 Common Shares
---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES ( )
---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
S&WLP
---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) (X)
(b) ( )
---------------------------------------------------------------------
3 SEC USE ONLY
---------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
---------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS ( )
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Tennessee
---------------------------------------------------------------------
7 SOLE VOTING POWER
119,143 Common Shares
NUMBER OF ------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 Common Shares
EACH ------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 119,143 Common Shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0 Common Shares
---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
119,143 Common Shares
---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* ( )
---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.3%
---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
---------------------------------------------------------------------
This Statement on Schedule 13D (the "Schedule 13D") is being
filed jointly on behalf of Steven M. Scott, M.D., an individual
("Dr. Scott"); Scott Medical Partners, L.P., a limited
partnership ("Scott Medical") of which Dr. Scott is the General
Partner; The Signal Fund, L.P., a limited partnership for which
Dr. Scott holds investment power through Scott Medical; The
Steven M. Scott Family Limited Partnership, a limited partnership
of which Dr. Scott is the General Partner; Century American
Insurance Company, a corporation ("Century American") of which
Dr. Scott is the sole owner; The Scott Family Foundation, Inc., a
private foundation of which Dr. Scott is the sole trustee; and
S&WLP, a limited partnership of which Dr. Scott is the sole
Limited Partner. In accordance with Rule 13d-1(c) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
Dr. Scott previously filed Schedules 13G with respect to his
beneficial ownership of Common Stock, par value $.01 per share
(the "Common Stock"), of Coastal Physician Group, Inc., a
Delaware corporation (the "Issuer"). A Joint Filing Agreement is
attached hereto as Exhibit 1 with respect to the filing parties.
ITEM 1. SECURITY AND ISSUER.
This Schedule 13D relates to the Common Stock of the Issuer.
The address of the principal executive offices of the Issuer is
2828 Croasdaile Drive, Durham, North Carolina 27705.
ITEM 2. IDENTITY AND BACKGROUND.
1. (a) Steven M. Scott, M.D.
(b) 2828 Croasdaile Drive, Durham, North Carolina 27705.
(c) Chairman of the Board, President and Chief Executive
Officer of the Issuer.
(d) Dr. Scott has not, during the last five years, been
convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) Dr. Scott has not, during the last five years, been a
party to a civil proceeding of a judicial or
administrative body and, as a result of such
proceeding, was or is subject to a judgment, decree or
final order enjoining future violations of, or
prohibiting or mandating activities subject to, Federal
or State securities laws or
finding any violation with respect to such laws.
(f) Dr. Scott is a citizen of the United States.
2. (a) Scott Medical
(b) C/o Stoneybrook Investment Co., P.O. Box 61179, Durham,
North Carolina 27715.
(c) Limited Partnership.
(d) None of the partners of Scott Medical was, during the
last five years, convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(e) None of the general partners of Scott Medical was,
during the last five years, a party to a civil
proceeding of a judicial or administrative body and, as
a result of such proceeding, was or is subject to a
judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities
subject to, Federal or State securities laws or finding
any violation with respect to such laws.
(f) Organized under the laws of the State of Tennessee.
Dr. Scott is the sole General Partner of Scott Medical
Partners, L.P.
3. (a) The Signal Fund, L.P.
(b) C/o Stoneybrook Investment Co., P.O. Box 61179, Durham,
North Carolina 27715.
(c) Limited Partnership.
(d) None of the general partners of The Signal Fund, L.P.
was, during the last five years, convicted in a
criminal proceeding (excluding traffic violations or
similar misdemeanors).
(e) None of the general partners of The Signal Fund, L.P.
was, during the last five years, a party to a civil
proceeding of a judicial or administrative body and, as
a result of such proceeding, was or is subject to a
judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities
subject to, Federal or State securities laws or finding
any violation with respect to such laws.
(f) Organized under the laws of the State of Tennessee.
David B. Plyler is the sole General Partner of The
Signal Fund, L.P. Mr. Plyler's business address is c/o
Stoneybrook Investment Co., P.O. Box 61179, Durham,
North Carolina 27715. Mr. Plyler is a citizen of the
United States.
4. (a) The Steven M. Scott Family Limited Partnership
(b) C/o Stoneybrook Investment Co., P.O. Box 61179, Durham,
North Carolina 27715.
(c) Limited Partnership.
(d) None of the general partners of The Steven M. Scott
Family Limited Partnership was, during the last five
years, convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
(e) None of the general partners of The Steven M. Scott
Family Limited Partnership was, during the last five
years, a party to a civil proceeding of a judicial or
administrative body and, as a result of such
proceeding, was or is subject to a judgment, decree or
final order enjoining future violations of, or
prohibiting or mandating activities subject to, Federal
or State securities laws or finding any violation with
respect to such laws.
(f) Organized under the laws of the State of Tennessee.
Dr. Scott is the sole General Partner of The Steven M.
Scott Family Limited Partnership.
5. (a) Century American
(b) 2828 Croasdaile Drive, Durham, North Carolina 27705.
(c) Insurance Company.
(d) None of the officers or directors of Century American
was, during the last five years, convicted in a
criminal proceeding (excluding traffic violations or
similar misdemeanors).
(e) None of the officers or directors of Century American
was, during the last five years, a party to a civil
proceeding of a judicial or administrative body and, as
a result of such proceeding, was or is subject to a
judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities
subject to, Federal or State securities laws or finding
any violation with respect to such laws.
(f) Incorporated under the laws of the State of Tennessee.
Dr. Scott is the sole owner of Century American. The
names, business addresses, present principal
occupations or employments and citizenships of the
directors and officers of Century American are set
forth on Schedule A hereto.
6. (a) The Scott Family Foundation, Inc.
(b) C/o Stoneybrook Investment Co., P.O. Box 61179, Durham,
North Carolina 27715.
(c) Private Foundation.
(d) None of the trustees of The Scott Family Foundation,
Inc. was, during the last five years, convicted in a
criminal proceeding (excluding traffic violations or
similar misdemeanors).
(e) None of the trustees of The Scott Family Foundation,
Inc. was, during the last five years, a party to a
civil proceeding of a judicial or administrative body
and, as a result of such proceeding, was or is subject
to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities
subject to, Federal or State securities laws or finding
any violation with respect to such laws.
(f) Organized under the laws of the State of Florida.
Dr. Scott is the sole trustee of The Scott Family
Foundation, Inc.
7. (a) S&WLP
(b) C/o Stoneybrook Investment Co., P.O. Box 61179, Durham,
North Carolina 27715.
(c) Limited Partnership.
(d) None of the general partners of S&WLP was, during the
last five years, convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(e) None of the general partners of S&WLP was, during the
last five years, a party to a civil proceeding of a
judicial or administrative body and, as a result of
such proceeding, was or is subject to a judgment,
decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to,
Federal or State securities laws or finding any
violation with respect to such laws.
(f) Organized under the laws of the State of Tennessee.
Dr. Walls is the sole General Partner of S&WLP.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Dr. Scott currently may be deemed to be the beneficial
owner of 18,417,653 shares, or 52.3%, of the Issuer's Common
Stock. Such percentage ownership has been calculated by Dr.
Scott as follows: Dr. Scott understands that the Issuer currently
has outstanding 24,366,386 shares of Common Stock. In addition,
as described below in this Item 3, the Issuer has issued to Dr.
Scott an aggregate of 1,163,755 shares of Convertible Preferred
Stock, each of which is generally entitled to ten votes per share
and, subject to prior shareholder approval, is convertible into
ten shares of Common Stock, or an aggregate of 11,637,550 shares
of Common Stock. Dr. Scott currently may be deemed to be the
beneficial owner of 10,849,830 of the 11,637,550 shares of Common
Stock issuable upon conversion of the Convertible Preferred
Stock. In accordance with Rule 13d-3(d)(1)(i) under the Exchange
Act, such 10,849,830 shares of Common Stock are deemed to be
outstanding for the purpose of computing the percentage of
outstanding shares of Common Stock beneficially owned by Dr.
Scott and the other entities identified herein.
Of the shares of Common Stock beneficially owned by Dr.
Scott, 7,567,723 shares were acquired by Dr. Scott from the time
he founded the Issuer in 1977 to the Issuer's initial public
offering in 1991 through the use of personal funds, and 100
shares were acquired by Dr. Scott following the Issuer's initial
public offering via open market purchases through the use of
personal funds.
In 1996, Dr. Scott conducted a solicitation of proxies to elect
certain nominees to the Board of Directors of the Issuer. Such
nominees were elected at the Issuer's 1996 Annual Meeting of
Shareholders. In full satisfaction of the Issuer's obligations to
reimburse Dr. Scott for certain expenses incurred by Dr. Scott in
connection with his proxy solicitation, the Issuer issued to Dr. Scott
226,690 shares of Common Stock in December 1996 and 32,739 shares of
Series B Convertible Preferred Stock, par value $.01 per share (the
"Series B Shares"), in January and February 1997. Also, in February
1997, the Issuer issued to Dr. Scott 41,932 shares of Series A
Convertible Preferred Stock, par value $.01 per share (the "Series A
Shares"), in full satisfaction of the Issuer's obligation to reimburse
Dr. Scott for certain litigation expenses incurred by him. Also, in
February 1997, the Issuer issued to Dr. Walls 4,101 Series A Shares in
full satisfaction of the Issuer's obligation to reimburse Dr. Walls
for his litigation expenses. On the same day, Dr. Scott purchased from
Dr. Walls such Series A Shares for an aggregate price of $147,636, or
$36.00 per Series A Share. Each of the Series A Shares and the Series
B Shares is convertible into ten shares of Common Stock, subject to
prior approval of their conversion by the Issuer's shareholders. On
March 21, 1997, Dr. Scott transferred all 46,033 Series A Shares
(which consists of 41,932 Series A Shares issued to Dr. Scott by the
Issuer and 4,101 Series A Shares purchased by Dr. Scott from Dr. Walls
as described above) and all 32,739 Series B Shares to his five
children, in equal portions, as a gift. Dr. Scott does not have any
voting or dispositive power with respect to the Series A Shares or the
Series B Shares gifted to his children. Accordingly, Dr. Scott is not
deemed to be the beneficial owner of the shares of Common Stock
issuable upon conversion thereof and such shares are not included in
the 18,417,653 shares of Common Stock reported herein as being
beneficially owned by Dr. Scott.
On June 9, 1997, in connection with the Issuer's
refinancing of its then-existing bank debt, Dr. Scott made a
capital contribution to the Issuer in the amount of $10,000,000
in cash, in exchange for which he received 1,000,000 shares of
Series C Convertible Preferred Stock, par value $.01 per share
(the "Series C Shares"). On the same day, Dr. Scott received an
additional 84,983 Series C Shares and 240,000 shares of Common
Stock from the Issuer in satisfaction of certain lease payments
in the aggregate amount of $1,089,831.07 which were owed by the
Issuer to certain entities affiliated with Dr. Scott (including
Century American), and which were paid by Dr. Scott on behalf of
the Issuer. Each of the Series C Shares is convertible into ten
shares of Common Stock, subject to prior approval of their
convertibility by the Issuer's shareholders.
The Certificate of Designations, Preferences and Rights of
the Series A Shares, the Series B Shares and the Series C Shares
are attached hereto as Exhibits 2, 3 and 4, respectively.
Scott Medical acquired its 5,434,977 shares of Issuer
Common Stock through a capital contribution by Dr. Scott. The
Signal Fund, L.P. acquired its 815,000 shares of Issuer Common
Stock through a capital contribution by Dr. Scott. The Steven M.
Scott Family Limited Partnership acquired its 535,766 shares of
Issuer Common Stock through a capital contribution by Dr. Scott.
Century American Insurance Company acquired its 303,334 shares of
Issuer Common Stock through a capital contribution by Dr. Scott.
The Scott Family Foundation acquired its 39,110 shares of Issuer
Common Stock through a capital contribution by Dr. Scott. S&WLP
acquired its 119,143 shares of Issuer Common Stock from Scott
Medical on June 9, 1997, for an aggregate purchase price of
$119,143.
ITEM 4. PURPOSE OF TRANSACTION.
Dr. Scott is the Chairman of the Board, President, Chief
Executive Officer and a director of the Issuer. He is also the
Issuer's largest shareholder. Therefore, Dr. Scott may be deemed
to control the Issuer by virtue of his various positions and his
beneficial ownership of Common Stock.
Dr. Scott has no current plans or proposals as a shareholder
of the Issuer which relate to or would result in: (a) the
acquisition by any person of additional securities of the Issuer,
or the disposition of securities of the Issuer; (b) an
extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its
subsidiaries; (c) a sale or transfer of a material amount of
assets of the Issuer or any of its subsidiaries; (d) any change
in the present Board of Directors or management of the Issuer,
including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the Board; (e) any
material change in the present capitalization or dividend policy
of the Issuer; (f) any other material change in the Issuer's
business or corporate structure; (g) changes in the Issuer's
Certificate of Incorporation, By-Laws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the Issuer by any person; (h) causing a
class of securities of the Issuer to be delisted from a national
securities exchange or cease to be authorized to be quoted on an
inter-dealer quotation system of a registered national securities
association; (i) a class of equity securities of the Issuer
becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Securities Exchange Act of 1934, as
amended; or (j) any action similar to any of those enumerated
above.
Notwithstanding the foregoing, Dr. Scott reserves the right
to purchase or dispose of additional shares of the Issuer's
securities in the future and to adopt at some future date the
plans and proposals described below in paragraphs (a) through (j)
of this Item 4. In his capacity as Chairman of the Board,
President, Chief Executive Officer and a director of the Issuer,
Dr. Scott will take such actions as he believes are in the best
interest of the Issuer and all of its shareholders.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As discussed above in Item 3, Dr. Scott currently may
be deemed to be the beneficial owner of 18,417,653
shares, or 52.3%, of the Issuer's Common Stock. Such
shares are the aggregate number of shares included in
the Schedule 13D, and are held as set forth below:
Name of Person/Entity Shares Owned Percent of Outstanding
Dr. Scott 11,170,323 31.7%
Scott Medical 5,434,977 15.4%
The Signal Fund, L.P. 815,000 2.3%
The Steven M. Scott 535,766 1.5%
Family Limited
Partnership
Century American 303,334 0.9%
The Scott Family 39,110 0.1%
Foundation, Inc.
S&WLP 119,143 0.3%
(b) Of the 18,417,653 shares of Common Stock beneficially
owned by Dr. Scott, Dr. Scott (i) has sole voting power
over 17,762,744 shares, (ii) shares voting power over
654,909 shares with Bertram E. Walls, M.D., (iii) has
sole dispositive power over 17,762,744 shares, and (iv)
shares dispositive power over 654,909 shares with
Bertram E. Walls, M.D.
(c) During the past 60 days, Dr. Scott has engaged in the
following transactions in the Issuer's securities: As
described in Item 3 above, on June 9, 1997, Dr. Scott
received 240,000 shares of Issuer Common Stock and
1,084,983 Series C Shares from the Issuer. Also on
June 9, 1997, Scott Medical sold 119,143 shares of
Issuer Common Stock to S&WLP for $119,143.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
Of the 18,417,653 shares of the Issuer's Common Stock
beneficially owned by Dr. Scott, an aggregate of 6,757,280 shares
(the "Pledged Shares") are pledged to certain lending
institutions to secure various borrowings made by Scott Medical.
None of such borrowings were made for the purpose of acquiring
shares of Common Stock or other securities of the Issuer. In the
event of a default on any loan secured by the Pledged Shares, the
lending institution is entitled to exercise voting power with
respect to the Pledged Shares securing such loan. In addition,
in the event of a default on any loan secured by the Pledged
Shares, the lending institution has the rights of a secured party
under the Uniform Commercial Code with respect to the disposition
of the Pledged Shares securing such loan.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1: Joint Filing Agreement of Steven M.
Scott, M.D., Scott Medical Partners,
L.P., The Signal Fund, L.P., The Steven
M. Scott Family Limited Partnership,
Century American Insurance Company, The
Scott Family Foundation, Inc. and S&WLP,
pursuant to Rule 13d-1(f).
Exhibit 2: Certificate of Designations, Preferences and
Rights of Series A Convertible Preferred
Stock of Coastal Physician Group, Inc.
Exhibit 3: Certificate of Designations, Preferences and
Rights of Series B Convertible Preferred
Stock of Coastal Physician Group, Inc.
Exhibit 4: Certificate of Designations, Preferences and
Rights of Series C Convertible Preferred
Stock of Coastal Physician Group, Inc.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
June 19, 1997
/s/ Steven M. Scott, M.D.
----------------------------------------------
Steven M. Scott, M.D.
SCOTT MEDICAL PARTNERS, L.P.
By: /s/ Steven M. Scott, M.D.
----------------------------------------------
Name: Steven M. Scott, M.D.
Title: General Partner
THE SIGNAL FUND, L.P.
By: /s/ David B. Plyler
----------------------------------------------
Name: David B. Plyler
Title: General Partner
THE STEVEN M. SCOTT FAMILY LIMITED
PARTNERSHIP
By: /s/ Steven M. Scott, M.D.
----------------------------------------------
Name: Steven M. Scott, M.D.
Title: General Partner
CENTURY AMERICAN INSURANCE COMPANY
By: /s/ Bertram E. Walls, M.D.
----------------------------------------------
Name: Bertram E. Walls, M.D.
Title: Chairman of the Board of Directors
THE SCOTT FAMILY FOUNDATION, INC.
By: /s/ Steven M. Scott, M.D.
----------------------------------------------
Name: Steven M. Scott, M.D.
Title: President
S&WLP
By: /s/ Bertram E. Walls, M.D.
----------------------------------------------
Name: Bertram E. Walls, M.D.
Title: General Partner
Schedule A
Information Concerning Directors and Officers of
Century American Insurance Company
BERTRAM E. WALLS, M.D. - Chairman of the Board, Chief
Executive Officer, Director
(a) Business Address: Century American Insurance Co.
2828 Croasdaile Drive
Durham, North Carolina 27705
(b) Principal Occupation Chairman of the Board, Chief
or Employment: Executive Officer and Director of
Century American Insurance Company;
Member of the Board of Directors
of Coastal Physician Group, Inc.
(c) Citizenship: United States
DAVID A. LONG - Vice-President, Director
(a) Business Address: Century American Insurance Co.
2828 Croasdaile Drive
Durham, North Carolina 27705
(b) Principal Occupation Vice-President and Director
or Employment: of Century American Insurance
Company
(c) Citizenship: United States
DANIEL C. RYON - Vice-President, Director
(a) Business Address: Century American Insurance Co.
2828 Croasdaile Drive
Durham, North Carolina 27705
(b) Principal Occupation Vice-President and Director
or Employment: of Century American Insurance
Company
(c) Citizenship: United States
JO L. CONROY - Vice-President, Director
(a) Business Address: Century American Insurance Co.
2828 Croasdaile Drive
Durham, North Carolina 27705
(b) Principal Occupation Vice-President and Director of
or Employment: Century American Insurance Company
(c) Citizenship: United States
DANIEL D. HITE - Assistant Treasurer, Director
(a) Business Address: Century American Insurance Co.
2828 Croasdaile Drive
Durham, North Carolina 27705
(b) Principal Occupation Executive Vice-President of Polk &
or Employment: Sullivan Group, Inc.
(c) Citizenship: United States
MITCHELL W. PERRY - Secretary, Treasurer, Vice-President, Director
(a) Business Address: Century American Insurance Co.
2828 Croasdaile Drive
Durham, North Carolina 27705
(b) Principal Occupation Secretary, Treasurer, Vice-President
or Employment: and Director of Century American
Insurance Company
(c) Citizenship: United States
BILLY R. SOLESBEE - Executive Vice-President, Director
(a) Business Address: Century American Insurance Co.
2828 Croasdaile Drive
Durham, North Carolina 27705
(b) Principal Occupation Executive Vice-President of Coastal
or Employment: Physician Services, Inc.;
Executive Vice-President and
Director of Century American
Insurance Company
(c) Citizenship: United States
Exhibit 1
Joint Filing Agreement
In accordance with Rule 13d-1(f) under the Securities
Exchange Act of 1934, as amended, the persons named below agree
to the joint filing on behalf of each of them of a statement on
Schedule 13D (including any amendments thereto) with respect to
the common stock, par value $.01 per share, of Coastal Physician
Group, Inc., a Delaware corporation, and further agree that this
Joint Filing Agreement be included as an exhibit to such joint
filings. In evidence thereof, the undersigned parties, each
being duly authorized, hereby execute this Agreement on the 19th
day of June, 1997.
/s/ Steven M. Scott, M.D.
----------------------------------------------
Steven M. Scott, M.D.
SCOTT MEDICAL PARTNERS, L.P.
By: /s/ Steven M. Scott, M.D.
----------------------------------------------
Name: Steven M. Scott, M.D.
Title: General Partner
THE SIGNAL FUND, L.P.
By: /s/ David B. Plyler
----------------------------------------------
Name: David B. Plyler
Title: General Partner
THE STEVEN M. SCOTT FAMILY LIMITED
PARTNERSHIP
By: /s/ Steven M. Scott, M.D.
----------------------------------------------
Name: Steven M. Scott, M.D.
Title: General Partner
CENTURY AMERICAN INSURANCE COMPANY
By: /s/ Bertram E. Walls, M.D.
----------------------------------------------
Name: Bertram E. Walls, M.D.
Title: Chairman of the Board of Directors
THE SCOTT FAMILY FOUNDATION, INC.
By: /s/ Steven M. Scott, M.D.
----------------------------------------------
Name: Steven M. Scott, M.D.
Title: President
S&WLP
By: /s/ Bertram E. Walls, M.D.
----------------------------------------------
Name: Bertram E. Walls, M.D.
Title: General Partner
Exhibit 2
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 12:00 PM
01/22/1997
971022073 - 2294364
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF SERIES A CONVERTIBLE PREFERRED STOCK OF
COASTAL PHYSICIAN GROUP, INC.
COASTAL PHYSICIAN GROUP, INC., a corporation organized under
and existing under the General Corporation Law of the State of
Delaware (the "Company"),
DOES HEREBY CERTIFY:
That, pursuant to authority conferred upon the Board of
Directors by the Amended and Restated Certificate of
Incorporation of the Company, and pursuant to the provisions of
Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors, at a meeting duly held on
January 21, 1997, adopted a resolution providing for the
designations, preferences and relative, participating, optional
or other rights, and the qualifications, limitations or
restrictions thereof, of the Series A Convertible Preferred
Stock, which resolution is as follows:
RESOLVED, that pursuant to the authority granted to and
vested in the Board of Directors of the Company in accordance
with the provisions of the Amended and Restated Certificate of
Incorporation, the Board of Directors hereby creates a series of
convertible preferred stock, with a par value of $0.01 per share,
of the Company and hereby states the designation and number of
shares, and fixes the relative rights, preferences and limitation
thereof (in addition to the provisions in the Amended and
Restated Certificate of Incorporation that are applicable to the
preferred stock of all series) as follows:
Series A Convertible Preferred Stock
Section 1. Designation and Amount. The shares of such
series shall be designated as Series A Convertible Preferred
Stock, with a par value of $0.01 per share (the "Series A
Convertible Preferred Stock"), and the number of shares
constituting such series shall be forty-seven thousand five
hundred (47,500).
Section 2. Dividends. The holders of shares of Series A
Convertible Preferred Stock shall be entitled to receive
dividends, when, as and if declared by the Board of Directors or
a duly authorized committee thereof, out of funds legally
available for the payment of dividends. The amount of dividends
payable in respect of each share of Series A Convertible
Preferred Stock shall be equal to the result obtained by
multiplying (a) the number of a (including fractions) of the
Company's Common Stock, $0.01 par value per share (the "Common
Stock"), into which such share of Series A Convertible Preferred
Stock is then convertible in accordance with Section 4 hereof
(whether or not a Trigger Date (as defined in Section 4K hereof)
has yet occurred) by (b) the amount of dividends declared and
paid on each share of the Common Stock. No dividend shall be
paid or declared on any share of a Common Stock, unless a
dividend, payable in the same consideration and manner, is
simultaneously paid or declared, as the case may be, on each
share of Series A Convertible Preferred Stock in an amount
determined as set forth above nor shall any dividend be paid or
declared on any share of Series A Convertible Preferred Stock
unless a dividend, payable in the same consideration and manner,
is simultaneously paid or declared, as the case may be, on each
share of the Common Stock, in each case without preference or
priority of any kind. For purposes of this Section 2, the term
"dividends" shall include any pro rata distribution by the
Company of cash, property, securities (including, but not limited
to, rights, warrants or options) or other property or assets to
the holders of the Common Stock, whether or not paid out of
capital, surplus or earnings.
Section 3. Liquidation Preferences. Upon any
liquidation, dissolution or winding up of the Company, no
distribution shall be made to the holders of shares of stock
ranking junior to the Series A Convertible Preferred Stock
unless, prior thereto, the holders of shares of Series A
Convertible Preferred Stock shall have received $36 per share.
Following the payment of the full amount of such liquidation
preference, no additional distributions shall be made to the
holders of shares of Series A Convertible Preferred Stock. If,
upon any liquidation, dissolution or winding up of the Company,
the assets of the Company, or proceeds thereof, distributable
among the holders of shares of Series A Convertible Preferred
Stock or any capital stock ranking on a par with the Series A
Convertible Preferred Stock upon liquidation, dissolution or
winding up of the Company, shall be insufficient to pay in full
the preferential amounts to which such stock would be entitled,
then such assets, or the proceeds thereof, shall be distributable
among such holders ratably in accordance with the respective
amounts which would be payable on such shares if all amounts
payable thereon were payable in full.
Section 4. Conversion Rights, Antidilution Provisions.
A. Following the Trigger Date (as defined in subparagraph K
of this Section 4), shares of the Series A Convertible Preferred
Stock shall be convertible, in whole or in part, at the option of
either the holder or the Company, into Common Stock, at any time
or from time to time, subject to the following terms and
conditions. The Series A Convertible Preferred Stock shall not
be convertible into any shares of Common Stock unless and until
the Trigger Date has occurred.
B. Following the Trigger Date, the shares of a Series A
Convertible Preferred Stock shall be convertible at the principal
executive offices of the Company, and at such other office or
offices, if any, as the Board of Directors may designate, into
fully paid and nonassessable shares of Common Stock of the
Company, at an initial conversion rate of ten (10) shares of
Common Stock for each share of Series A Convertible Preferred
Stock, subject to adjustment as described in this Section 4.
C. In order to convert shares of the Series A Convertible
Preferred Stock into Common Stock, the holder thereof shall
surrender, after the Trigger Date, at any office hereinabove
mentioned the certificate or certificates therefor, duty endorsed
or assigned to the Company or in blank, and give written notice
to the Company at such office that such holder elects to convert
such shares. Shares of the Series A Convertible Preferred Stock
shall be deemed to have been converted immediately prior to the
close of business on the day of the surrender of such shares for
conversion in accordance with the foregoing provisions, and the
or person or persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes
as the record holder or holders of such Common Stock at such
time. As promptly as practicable on or after conversion date,
the Company shall issue and shall deliver at such office a
certificate or certificates for the number of full shares of
Common Stock issuable upon such conversion, together with payment
in lieu of any fraction of a share, as hereinafter provided, to
the person or persons entitled to receive the same.
D. At any time after the Trigger Date the Company, by
written notice to any or all holders of the Series A Convertible
Preferred Stock, may require such holder or holders to convert,
in whole or in part, the Series A Convertible Preferred Stock
into Common Stock. Within thirty days after the receipt of such
written notice, the holder or holders thereof shall cause that
number of shares of Series A Convertible Preferred Stock as
specified in such written notice to be converted into Common
Stock in the manner described in, and subject to the provisions
of, subparagraph C of this Section 4.
E. If at any time the Company shall subdivide or combine
its outstanding shares of Common Stock into a different number of
shares of Common Stock, each share of Series A Convertible
Preferred Stock shall thereafter be convertible into the same
number of shares of Common Stock to which the holder of such
shares of Series A Convertible Preferred Stock would thereafter
have been entitled had such shares of Series A Convertible
Preferred Stock been converted into Common Stock immediately
prior to the effective date of such subdivision or combination.
F. If there exists any capital reorganization or any
reclassification of a capital stock of the Company or
consolidation or merger of the Company with or into another
corporation or entity, each share of Series A Convertible
Preferred Stock shall thereafter be convertible into, in lieu of
Common Stock, the same kind and amounts of securities or other
assets, or both, which were issuable or distributable to the
holders of shares of outstanding Common Stock of the Company upon
such reorganization, reclassification, consolidation or merger in
respect of that number of shares of Common Stock into which such
share of Series A Convertible Preferred Stock would have been
converted had such share of Series A Convertible Preferred Stock
been converted into Common Stock immediately prior to such
reorganization, reclassification, consolidation or merger.
G. Upon any event described in subparagraphs E and F of
this Section 4, the Company shall promptly mail to each holder of
Series A Convertible Preferred Stock a notice which shall
describe such event and the change in the number of shares or
other assets or securities issuable upon the conversion of Series
A Convertible Preferred Stock, setting forth in reasonable detail
the method of calculation and the facts upon which the
calculation is based.
H. The Company shall at all times reserve and keep
available, free from pre-emptive rights, out of its authorized
but unissued Common Stock, for the purpose of effecting the
conversion of the Series A Convertible Preferred Stock, the full
number of a Common Stock then issuable upon the conversion of all
shares of Series A Convertible Preferred Stock then outstanding
and shall take all such action and obtain all such permits or
orders as may be necessary to enable the Company lawfully to
issue such Common Stock upon such conversion.
I. No fractional shares of Common Stock shall be issued
upon conversion, but, instead of any fraction of a share which
would otherwise be issuable, the Company shall pay a cash
adjustment in respect of such fraction.
J. The Company will pay any and all taxes (excluding
federal, state and local income taxes) that may be payable in
respect of the issue or delivery of shares of Common Stock in
conversion of the Series A Convertible Preferred Stock pursuant
hereto. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved
in the issue and delivery of shares of Common Stock in a name
other than in which the shares of Series A Convertible Preferred
Stock so converted were registered, and no such issue or delivery
shall be made unless and until the person requiring such issue
has paid to the Company the amount of any such tax, or has
established to the satisfaction of the Company that such tax has
been paid.
K. As used herein, the term "Trigger Date" means the date
of the certification of the vote of stockholders of the Company
held at any annual or special meeting of stockholders of the
Company at which a quorum is present and at which the issuance of
Common Stock upon conversion of the Series A Convertible
Preferred Stock is approved by the holders of a majority of the
shares of Common Stock voted at such meeting, provided that the
total vote cast on the proposal represents over 50% in interest
of all securities entitled to vote on the proposal.
Section 5. No Redemption. The Series A Convertible
Preferred Stock shall not be redeemable.
Section 6. Voting Rights. The holders of the Series A
Convertible Preferred Stock shall be entitled to that number of
votes per share of Series A Convertible Preferred Stock equal to
the number of shares of Common Stock into which such shares of
Series A Convertible Preferred Stock is then convertible in
accordance with Section 4 hereof (whether or not the Trigger Date
has yet occurred) at all meetings of stockholders of the Company;
provided that shares of the Series A Convertible Preferred Stock
shall not be entitled to vote on the approval of the issuance of
Common Stock upon conversion of the Series A Convertible
Preferred Stock referred to in subparagraph K of Section 4.
Section 7. Exchange. Certificates representing shares
of the Series A Convertible Preferred Stock and, if converted in
accordance with the terms and conditions hereof, after conversion
thereof into Common Stock, certificates representing such shares,
shall be exchangeable at the option of the holder, for a new
certificate or certificates of the same or different
denominations representing in the aggregate the same number of
shares of Series A Convertible Preferred Stock or shares of
Common Stock, as the case may be.
Section 8. Shares to be Retired. All shares of Series A
Convertible Preferred Stock which are converted into Common
Stock will revert to the status of authorized but unissued shares
of preferred stock of the Company but shall not thereafter be
reissued as shares of Series A Convertible Preferred Stock.
IN WITNESS WHEREOF, the Company has caused this Certificate
to be duly executed on its behalf by its undersigned President
and Chief Executive Officer and attested to by its Secretary this
21st day of January, 1997.
/s/ Henry J. Murphy
------------------------------------
Name: Henry J. Murphy
Title: President and Chief Executive
Officer
[Corporate Seal]
ATTEST:
/s/ Ray A. Spillman
---------------------------
Name: Ray A. Spillman
Title: Secretary
Exhibit 3
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 12:01 PM
01/22/1997
971022074 - 2294364
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF SERIES B CONVERTIBLE PREFERRED STOCK
OF
COASTAL PHYSICIAN GROUP, INC.
COASTAL PHYSICIAN GROUP, INC., a corporation organized under
and existing under the General Corporation Law of the State of
Delaware (the "Company").
DOES HEREBY CERTIFY:
That, pursuant to authority conferred upon the Board of
Directors by the Amended and Restated Certificate of
Incorporation of the Company, and pursuant to the provisions of
Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors, at a meeting duly held on
January 21, 1997, adopted a resolution providing for the
designations, preferences and relative, participating, optional
or other rights, and the qualifications, limitations or
restrictions thereof, of the Series B Convertible Preferred
Stock, which resolution is as follows:
RESOLVED, that pursuant to the authority granted to and
vested in the Board of Directors of the Company in accordance
with the provisions of the Amended and Restated Certificate of
Incorporation, the Board of Directors hereby creates a series of
convertible preferred stock, with a par value of $0.01 per share,
of the Company and hereby states the designation and number of
shares, and fixes the relative rights, preferences and limitation
thereof (in addition to the provisions in the Amended and
Restated Certificate of Incorporation that are applicable to the
preferred stock of all series) as follows:
Series B Convertible Preferred Stock
Section 1. Designation and Amount. The shares of such
series shall be designated as Series B Convertible Preferred
Stock, with a par value of $0.01 per share (the "Series B
Convertible Preferred Stock"), and the number of shares
constituting such series shall be thirty-two thousand five
hundred (32,500).
Section 2. Dividends. The holders of shares of Series B
Convertible Preferred Stock shall be entitled to receive
dividends, when, as and if declared by the Board of Directors or
a duly authorized committee thereof, out of funds legally
available for the payment of dividends. The amount of dividends
payable, in respect of each share of Series B Convertible
Preferred Stock shall be equal to the result obtained by
multiplying (a) the number of shares (including fractions) of the
Company's Common Stock, $0.01 par value per share, (the "Common
Stock"), into which such share of Series B Convertible Preferred
Stock is then convertible in accordance with Section 4 hereof
(whether or not a Trigger Date (as defined in Section 4K hereof)
has yet occurred) by (b) the amount of dividends declared and
paid on each share of the Common Stock. No dividend shall be
paid or declared on any share of a Common Stock, unless a
dividend, payable in the same consideration and manner, is
simultaneously paid or declared, as the case the Series B
Convertible Preferred Stock in an amount determined as set forth
above nor shall any dividend be paid or declared on any share of
Series B Convertible Preferred Stock unless a dividend, payable
in the same consideration and manner, is simultaneously paid or
declared, as the case may be, on each share of Series B
Convertible Preferred Stock in an amount determined as set forth
above nor shall any dividend be paid or declared on any share of
Series B Convertible Stock unless a dividend, payable in the same
consideration and manner, is simultaneously paid or declared, as
the case may be, on each share of the Common Stock, in each case
without preference or priority of any kind. For purposes of this
Section 2, the term "dividends" shall include any pro rata
distribution by the Company of cash, property, securities
(including, but not limited to, rights, warrants or options) or
other property or assets to the holders of the Common Stock,
whether or not paid out of capital, surplus or earnings.
Section 3. Liquidation Preferences. Upon any
liquidation, dissolution or winding up of the Company, no
distribution shall be made to the holders of shares of stock
ranking junior to the Series B Convertible Preferred Stock
unless, prior thereto, the holders of shares of Series B
Convertible Preferred Stock shall have received $30 per share.
Following the payment of the full amount of such liquidation
preference, no additional distributions shall be made to the
holders of shares of Series B Convertible Preferred Stock or any
capital stock ranking on a par with the Series B Convertible
Preferred Stock. If, upon any liquidation, dissolution or
winding up of the Company, the assets of the Company, or proceeds
thereof, distributable among the holders of the shares of Series
B Convertible Preferred Stock upon liquidation, dissolution or
winding up of the Company, shall be insufficient to pay in full
the preferential amounts to which such stock would be entitled,
then such assets, or the proceeds thereof, shall be distributable
among such holders ratably in accordance with the respective
amounts which would be payable on such shares if all amounts
payable thereon were payable in full.
Section 4. Conversion Rights, Antidilution Provisions.
A. Following the Trigger Date (as defined in subparagraph
K of this Section 4), shares of the Series B Convertible
Preferred Stock shall be convertible, in whole or in part, at the
option of either the holder or the Company, into Common Stock, at
any time or from time to time, subject to the following terms and
conditions. The Series B Convertible Preferred Stock shall not
be convertible into any shares of Common Stock unless and until
the Trigger Date has occurred.
B. Following the Trigger Date, the shares of a Series B
Convertible Preferred Stock shall be convertible at the principal
executive offices of the Company, and at such other office or
offices, if any, as the Board of Directors may designate, into
fully paid and nonassessable shares of Common Stock of the Common
Stock of the Company, at an initial conversion rate of ten (10)
shares of Common Stock for each share of Series B Convertible
Preferred Stock, subject to adjustment as described in this
Section 4.
C. In order to convert shares of the Series B Convertible
Preferred Stock into Common Stock, a holder thereof shall
surrender, after the Trigger Date, at any office hereinabove
mentioned the certificate or certificates therefor, duty endorsed
or assigned to the Company or in blank, and give written notice
to the Company at such office that such holder elects to convert
such shares. Shares of the Series B Convertible Preferred Stock
shall be deemed to have been converted immediately prior to the
close of business on the day of the surrender of such shares for
conversion in accordance with the foregoing provisions, and the
person or persons entitled to receive the Common Stock issuable
upon such conversion shall be treated for all purposes as the
record holder or holders of such Common Stock at such time. As
promptly as practicable on or after conversion date, the Company
shall issue and shall deliver at such office a certificate or
certificates for the number of full shares of Common Stock
issuable upon such conversion, together with payment in lieu of
any fraction of a share, as hereinafter provided, to the person
or persons entitled to receive the same.
D. At any time after the Trigger Date the Company, by
written notice to any or all holders of the Series B Convertible
Preferred Stock, may require such holder or holders to convert,
in whole or in part, the Series B Convertible Preferred Stock
into Common Stock. Within thirty days after the receipt of such
written notice, the holder or holders thereof shall cause that
number of shares of Series B Convertible Preferred Stock as
specified in such written notice to be converted into Common
Stock in the manner described in, and subject to the provisions
of, subparagraph C of this Section 4.
E. If at any time the Company shall subdivide or combine
its outstanding shares of Common Stock into a different number of
shares of Common Stock, each share of Series B Convertible
Preferred Stock shall thereafter be convertible into the same
number of shares of Common Stock to which the holder of such
shares of Series B Convertible Preferred Stock would thereafter
have been entitled had such shares of Series B Convertible
Preferred Stock been converted into Common Stock immediately
prior to the effective date of such subdivision or combination.
F. If there exists any capital reorganization or any
reclassification of a capital stock of the Company or
consolidation or merger of the Company with or into another
corporation or entity, each share of Series B Convertible
Preferred Stock shall thereafter be convertible into, in lieu of
Common Stock, the same kind and amounts of securities or other
assets, or both, which were issuable or distributable to the
holders of shares of outstanding Common Stock of the Company upon
such reorganization, reclassification, consolidation or merger in
respect of that number of shares of Common Stock into which such
share of Series B Convertible Preferred Stock would have been
converted had such share of Series B Convertible Preferred Stock
been converted into Common Stock immediately prior to such
reorganization, reclassification, consolidation or merger.
G. Upon any event described in subparagraphs E and F of
this Section 4, the Company shall promptly mail to each holder of
Series B Convertible Preferred Stock a notice which shall
describe such event and the change in the number of shares or
other assets or securities issuable upon the conversion of Series
B Convertible Preferred Stock setting forth in reasonable detail
the method of calculation and the facts upon which the
calculation is based.
H. The Company shall at all times reserve and keep
available, free from pre-emptive rights, out of its authorized
but unissued Common Stock, for the purpose of effecting the
conversion of the Series B Convertible Preferred Stock, the full
number of Shares of Common Stock then issuable upon the
conversion of all shares of Series B Convertible Preferred Stock
then outstanding and shall take all such action and obtain all
such permits or orders as may be necessary to enable the Company
lawfully to issue such Common Stock upon such conversion.
I. No fractional shares of Common Stock shall be issued
upon conversion, but, instead of any fraction of a share which
would otherwise be issuable, the Company shall pay a cash
adjustment in respect of such fraction.
J. The Company will pay any and all taxes (excluding
federal, state and local income taxes) that may be payable in
respect of the issue or delivery of shares of Common Stock in
conversion of the Series B Convertible Preferred Stock pursuant
hereto. The Company shall not, however, be required to pay any
tax which may be payable in respect of any transfer involved in
the issue and delivery of shares of Common Stock in a name other
than in which the shares of Series B Convertible Preferred Stock
so converted were registered, and no such issue or delivery shall
be made unless and until the person requiring such issue has paid
to the Company the amount of any such tax, or has established to
the satisfaction of the Company that such tax has been paid.
K. As used herein, the term "Trigger Date" means the date
of the certification of the vote of stockholders of the Company
held at any annual or special meeting of stockholders of the
Company at which a quorum is present and at which the issuance of
Common Stock upon conversion of the Series B Convertible
Preferred Stock is approved by the holders of a majority of the
shares of Common Stock voted at such meeting, provided that the
total vote cast on the proposal represents over 50% in interest
of all securities entitled to vote on the proposal.
Section 5. No Redemption. The Series B Convertible
Preferred Stock shall not be redeemable.
Section 6. Voting Rights. The holders of the Series B
Convertible Preferred Stock shall be entitled to that number of
votes per share of Series B Convertible Preferred Stock equal to
the number of shares of Common Stock into which such shares of
Series B Convertible Preferred Stock is then convertible in
accordance with Section 4 hereof (whether or not the Trigger Date
has yet occurred) at all meetings of stockholders of the Company;
provided that shares of the Series B Convertible Preferred Stock
shall not be entitled to vote on the approval of the issuance of
Common Stock upon conversion of the Series B Convertible
Preferred Stock referred to in subparagraph K of Section 4.
Section 7. Exchange. Certificates representing shares
of the Series B Convertible Preferred Stock and, if converted in
accordance with the terms and conditions hereof, after conversion
thereof into Common Stock, certificates representing such shares,
shall be exchangeable at the option of the holder, for a new
certificate or certificates of the same or different
denominations representing in the aggregate the same number of
shares of Series B Convertible Preferred Stock or shares of
Common Stock, as the case may be.
Section 8. Shares to be Retired. All shares of Series B
Convertible Preferred Stock which are converted into Common
Stock will revert to the status of authorized but unissued shares
of preferred stock of the Company but shall not thereafter be
reissued as shares of Series B Convertible Preferred Stock.
IN WITNESS WHEREOF, the Company has caused this Certificate
to be duly executed on its behalf by its undersigned President
and Chief Executive Officer and attested to by its Secretary this
21st day of January, 1997.
/s/ Henry J. Murphy
------------------------------------
Name: Henry J. Murphy
Title: President and Chief Executive
Officer
[Corporate Seal]
ATTEST:
/s/ Ray A. Spillman
----------------------------
Name: Ray A. Spillman
Title: Secretary
Exhibit 3 Cont.
AMENDMENT TO CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF SERIES B CONVERTIBLE PREFERRED STOCK
OF
COASTAL PHYSICIAN GROUP, INC.
COASTAL PHYSICIAN GROUP, INC., a corporation organized under
and existing under the General Corporation Law of the State of
Delaware (the "Company"),
DOES HEREBY CERTIFY:
That, pursuant to authority conferred upon the Board of
Directors by the Amended and Restated Certificate of
Incorporation of the Company, and pursuant to the provisions of
Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors, at a meeting duly held on
January 30, 1997, adopted a resolution increasing the number of
shares constituting the Series B Convertible Preferred Stock,
which resolution is as follows:
WHEREAS, the Board of Directors of the Company (the "Board
of Directors") has previously adopted a resolution creating a
class of Series B Convertible Preferred Stock, with a par value
of $.01 per share (the "Series B Convertible Preferred Stock"),
consisting of thirty-two thousand five hundred (32,500) shares,
and now wishes to increase the number shares constituting the
Series B Convertible Preferred Stock to thirty-three thousand
(33,000) shares.
NOW, THEREFORE, BE IT RESOLVED, that pursuant to the
authority granted to and vested in the Board of Directors in
accordance with the provisions of the Amended and Restated
Certificate of Incorporation, the Board of Directors hereby
increases the number of shares constituting the Series B
Convertible Preferred Stock from thirty-two thousand five hundred
(32,500) to thirty-three thousand (33,000).
IN WITNESS WHEREOF, the Company has caused this Certificate
to be duly executed on its behalf by its undersigned President
and Chief Executive Officer and attested to by its Secretary this
21st day of February, 1997.
/s/ Henry J. Murphy
--------------------------------
Name: Henry J. Murphy
Title: President and Chief
Executive Officer
[Corporate Seal]
ATTEST:
/s/ Ray A. Spillman
--------------------------
Name: Ray A. Spillman
Title: Secretary
Exhibit 4
COASTAL PHYSICIAN GROUP, INC.
RESOLUTIONS DESIGNATING
SERIES C CONVERTIBLE PREFERRED STOCK
WHEREAS, the Board of Directors, pursuant to the authority
conferred upon the Board of Directors by the Amended and Restated
Certificate of Incorporation of the Company, and pursuant to the
provisions of Section 151 of the General Corporation Law of the
State of Delaware, desires to adopt resolutions provided for the
designation, preference and relative, participating, optional or
other rights, and the qualifications, limitations or restrictions
thereof, of the Series C Convertible Preferred Stock;
NOW, THEREFORE, BE IT
RESOLVED, that pursuant to the authority granted to and
vested in the Board of Directors of the Company in accordance
with the provisions of the Amended and Restated Certificate of
Incorporation, the Board of Directors hereby creates a series of
convertible preferred stock, with a par value of $0.01 per share,
of the Company and hereby states the designation and number of
shares, and fixes the relative rights, preferences and limitation
thereof (in addition to the provisions in the Amended and
Restated Certificate of Incorporation that are applicable to the
preferred stock of all series) as follows:
Series C Convertible Preferred Stock
Section 1. Designation and Amount. The shares of such
series shall be designated as Series C Convertible Preferred
Stock with a par value of $0.01 per share (the "Series C
Convertible Preferred Stock"), and the number of shares
constituting such series shall be one million two hundred
thousand (1,200,000).
Section 2. Dividends. The holders of shares of Series C
Convertible Preferred Stock shall be entitled to receive
dividends, when, as and if declared by the Board of Directors or
a duly authorized committee thereof, out of funds legally
available for the payment of dividends. The amount of dividends
payable in respect of each share of Series C Convertible
Preferred Stock shall be equal to the result obtained by
multiplying (a) the number of shares (including fractions) of the
Company's Common Stock, $0.01 par value per share (the "Common
Stock"), into which such share of Series C Convertible Preferred
Stock is then convertible in accordance with Section 4 hereof
(whether or not the Trigger Date (as defined in Section 4K
hereof) has yet occurred) by (b) the amount of dividends declared
and paid on each share of the Common Stock. No dividend shall be
paid or declared on any share of the Common Stock, unless a
dividend, payable in the same consideration and manner is
simultaneously paid or declared, as the case may be, on each
share of Series C Convertible Preferred Stock in an amount
determined as set forth above nor shall any dividend be paid or
declared on any share of Series C Convertible Preferred Stock
unless a dividend, payable in the same consideration and manner,
is simultaneously paid or declared, as the case may be, on each
share of the Common Stock, in each case without preference or
priority of any kind. For purposes of this Section 2, the term
"dividends" shall include any pro rata distribution by the
Company of cash, property, securities (including, but not limited
to, rights, warrants or options) or other property or assets to
the holders of the Common Stock, whether or not paid out of
capital, surplus or earnings.
Section 3. Liquidation Preferences. Upon any
liquidation, dissolution or winding up of the Company, no
distribution shall be made to the holders of shares of stock
ranking junior to the Series C Convertible Preferred Stock
unless, prior thereto, the holders of shares of Series C
Convertible Preferred Stock shall have received an amount equal
to $10.00 per share. Following the payment of the full amount of
such liquidation preference, no additional distributions shall be
made to the holders of shares of Series C Convertible Preferred
Stock. If, upon any liquidation, dissolution or winding up of
the Company, the assets of the Company, or proceeds thereof,
distributable among the holders of shares of Series C Convertible
Preferred Stock or any capital stock ranking on a par with the
Series C Convertible Preferred Stock upon liquidation,
dissolution or winding up of the Company, shall be insufficient
to pay in full the preferential amounts to which such stock would
be entitled, then such assets, or the proceeds thereof, shall be
distributable among such holders ratably in accordance with the
respective amounts which would be payable on such shares if all
amounts payable thereon were payable in full.
Section 4. Convertible Rights, Antidilution Provisions.
A. Following the Trigger Date (as defined in subparagraph
K of this Section 4), shares of the Series C Convertible
Preferred Stock shall be convertible, in whole or in part, at the
option of either the holder or the Company, into Common Stock, at
any time or from time to time, subject to the following terms and
conditions. The Series C Convertible Preferred Stock shall not
be convertible into any shares of Common Stock unless and until
the Trigger Date has occurred.
B. Following the Trigger Date, the shares of the Series C
Convertible Preferred Stock shall be convertible at the principal
executive offices of the Company, and at such other office or
offices, if any, as the Board of Directors may designate, into
fully paid and nonassessable shares of Common Stock of the
Company, at an initial conversion rate of ten (10) shares of
Common Stock for each share of Series C Convertible Preferred
Stock, subject to adjustment as described in this Section 4.
C. In order to convert shares of the Series C Convertible
Preferred Stock into Common Stock, the holder thereof shall
surrender, after the Trigger Date, at any office hereinabove
mentioned the certificate or certificates therefor, duly endorsed
or assigned to the Company or in blank, and give written notice
to the Company at such office that such holder elects to convert
such shares. Shares of the Series C Convertible Preferred Stock
shall be deemed to have been converted immediately prior to the
close of business on the day of the surrender of such shares for
conversion in accordance with the foregoing provisions, and the
person or persons entitled to receive the Common Stock issuable
upon such conversion shall be treated for all purposes as the
record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the conversion date, the
Company shall issue and shall deliver at such office a
certificate or certificates for the number of full shares of
Common Stock issuable upon such conversion, together with payment
in lieu of any fraction of a share, as hereinafter provided, to
the person or persons entitled to receive the same.
D. At any time after the Trigger Date the Company, by
written notice to any or all holders of the Series C Convertible
Preferred Stock, may require such holder or holders to convert,
in whole or in part, the Series C Convertible Preferred Stock
into Common Stock. Within thirty days after the receipt of such
written notice, the holder or holders thereof shall cause that
number of shares of Series C Convertible Preferred Stock as
specified in such written notice to be converted into Common
Stock in the manner described in, and subject to the provisions
of, subparagraph C of this Section 4.
E. If at any time the Company shall subdivide or combine
its outstanding shares of Common Stock into a different number of
shares of Common Stock, each share of Series C Convertible
Preferred Stock shall thereafter be convertible into the same
number of shares of Common Stock to which the holder of such
shares of Series C Convertible Preferred Stock would thereafter
have been entitled had such shares of Series C Convertible
Preferred Stock been converted into Common Stock immediately
prior to the effective date of such subdivision or combination.
F. If there occurs any capital reorganization or any
reclassification of the capital stock of the Company or
consolidation or merger of the Company with or into another
corporation or entity, each share of Series C Convertible
Preferred Stock shall thereafter be convertible into, in lieu of
Common Stock, the same kind and amounts of securities or other
assets, or both, which were issuable or distributable to the
holders of shares of outstanding Common Stock of the Company upon
such reorganization, reclassification, consolidation or merger in
respect of that number of shares of Common Stock into which such
shares of Series C Convertible Preferred Stock would have been
converted had such share of Series C Convertible Preferred Stock
been converted into Common Stock immediately prior to such
reorganization, reclassification, consolidation or merger.
G. Upon any event described in subparagraphs E and F of
this Section 4, the Company shall promptly mail to each holder of
Series C Convertible Preferred Stock a notice which shall
describe such event and the change in the number of shares or
other assets or securities issuable upon the conversion of Series
C Convertible Preferred Stock, setting forth in reasonable detail
the method of calculation and the facts upon which such
calculation is based.
H. The Company shall at all times reserve and keep
available, free from pre-emptive rights, out of its authorized
but unissued Common Stock, for the purpose of effecting the
conversion of the Series C Convertible Preferred Stock, the full
number of shares of Common Stock then issuable upon the
conversion of all shares of Series C Convertible Preferred Stock
then outstanding and shall take all such action and obtain all
such permits or orders as may be necessary to enable the Company
lawfully to issue such Common Stock upon such conversion.
I. No fractional shares of Common Stock shall be issued
upon conversion, but, instead of any fraction of a share which
would otherwise be issuable, the Company shall pay a cash
adjustment in respect of such fraction.
J. The Company will pay any and all taxes (excluding
federal, state and local income taxes) that may be payable in
respect of the issue or delivery of shares of Common Stock upon
conversion of the Series C Convertible Preferred Stock pursuant
hereto. The Company shall not, however, be required to pay any
tax which may be payable in respect of any transfer involved in
the issue and delivery of shares of Common Stock in a name other
than that in which the shares or Series C Convertible Preferred
Stock so converted registered, and no such issue or delivery
shall be made unless and until the person requiring such issue
has paid to the Company the amount of any such tax, or has
established to the satisfaction of the Company that such tax has
been paid.
K. As used herein, the term "Trigger Date" means the date
of the certification of the vote of stockholders of the Company
held at any annual or special meeting of stockholders of the
Company at which a quorum is present and at which the issuance of
Common Stock upon conversion of the Series C Convertible
Preferred Stock is approved by the holders of a majority of the
shares of Common Stock voted at such meeting, provided that the
total vote cast on the proposal represents over 50% in interest
of all securities entitled to vote on the proposal.
Section 5. No Redemption. The Series C Convertible
Preferred Stock shall not be redeemable.
Section 6. Voting Rights. The holders of the Series C
Convertible Preferred Stock shall be entitled to that number of
cotes per share of Series C Convertible Preferred Stock equal to
the number of shares of Common Stock into which such shares of
Series C Convertible Preferred Stock is then convertible in
accordance with Section 4 hereof (whether or not the Trigger Date
has yet occurred) at all meetings of stockholders of the Company;
provided that shares of the Series C Convertible Preferred Stock
shall not be entitled to vote on the approval of the issuance of
Common Stock upon conversion of the Series C Convertible
Preferred Stock referred to in subparagraph K of Section 4.
Section 7. Exchange. Certificates representing shares
of the Series C Convertible Preferred Stock and, if converted in
accordance with the terms and conditions hereof, after conversion
thereof into Common Stock, certificates representing such shares,
shall be exchangeable, at the option of the holder, for a new
certificate or certificates of the same or different
denominations representing in the aggregate the same number of
shares of Series C Convertible Preferred Stock or shares of
Common Stock, as the case may be.
Section 8. Shares to be Retired. All shares of Series C
Convertible Preferred Stock which are converted into Common Stock
shall revert to the status of authorized but unissued shares of
preferred stock of the Company but shall not thereafter be
reissued as shares of Series C Convertible Preferred Stock.
