SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
(RULE 13D-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)
Coastal Physician Group, Inc.
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
19049510
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(CUSIP Number)
Steven M. Scott, M.D.
3711 Stoneybrook Drive
Durham, North Carolina 27705
(919)383-0355
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(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
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June 12, 1998
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(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(e), 13d-1(f) or 13d-1(g), check
the following box [ ].
Note: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are sent.
The information required on 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
NUMBER OF 7 SOLE VOTING POWER
SHARES 18,016,353 Common Shares
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 654,909 Common Shares
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 18,016,353 Common Shares
PERSON 10 SHARED DISPOSITIVE POWER
WITH 654,909 Common Shares
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
18,671,262 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)
49.1%
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, LLC
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
NUMBER OF 7,138,311 Common Shares
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0 Common Shares
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH 7,138,311 Common Shares
REPORTING 10 SHARED DISPOSITIVE POWER
PERSON 0 Common Shares
WITH
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,138,311 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)
18.8%
14 TYPE OF REPORTING PERSON
CO
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
NUMBER OF 7 SOLE VOTING POWER
SHARES 815,000 Common Shares
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0 Common Shares
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 815,000 Common Shares
PERSON 10 SHARED DISPOSITIVE POWER
WITH 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)
2.2%
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
NUMBER OF 7 SOLE VOTING POWER
SHARES 535,766 Common Shares
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0 Common Shares
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 535,766 Common Shares
PERSON 10 SHARED DISPOSITIVE POWER
WITH 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)
1.4%
14 TYPE OF REPORTING PERSON
PN
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Doctors Health Plan, 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
North Carolina
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,500,000 Common Shares
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0 Common Shares
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 1,500,000 Common Shares
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0 Common Shares
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,500,000 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)
4.0%
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
NUMBER OF 7 SOLE VOTING POWER
SHARES 39,110 Common Shares
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0 Common Shares
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 39,110 Common Shares
PERSON 10 SHARED DISPOSITIVE POWER
WITH 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
NUMBER OF 7 SOLE VOTING POWER
SHARES 119,143 Common Shares
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0 Common Shares
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 119,143 Common Shares
PERSON 10 SHARED DISPOSITIVE POWER
WITH 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 amends and supplements the Schedule 13D relating to
the beneficial ownership of Common Stock, par value $.01 per share (the
"Common Stock") of Coastal Physician Group, Inc., a Delaware corporation
(the "Issuer"), filed jointly with the Securities and Exchange Commission
by and on behalf of Steven M. Scott, M.D. ("Dr. Scott") and various
entities which may be deemed to be controlled by Dr. Scott. A Joint Filing
Agreement is attached hereto as Exhibit 1 with respect to the filing
parties. Except as disclosed herein there has been no change in the
information previously reported on Schedule 13D.
ITEM 2. IDENTITY AND BACKGROUND
Doctors Health Plan, Inc. ("DHP"), which is controlled by Dr. Scott,
has acquired shares of Common Stock from other entities controlled by Dr.
Scott, and accordingly, is included herein as a filing party. Certain
information concerning DHP is set forth below:
1. (a) Doctors Health Plan, Inc.
(b) 2828 Croasdaile Drive, Durham, North Carolina 27705
(c) Medical insurance company
(d) None of the officers or directors of DHP 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 DHP 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 North Carolina.
Dr. Scott is the sole owner of DHP Holdings, LLC, a North Carolina
limited liability company, which in turn, is the sole owner of DHP. The
names, business addresses, present principal occupations or employments and
citizenships of the directors and officers of DHP are set forth on Schedule
A hereto.
Century American Insurance Company previously was a reporting
person with respect to the Schedule 13D. Century American Insurance Company
is no longer affiliated with Dr. Scott and all shares of Common Stock which
it had previously owned are now owned by Scott Medical Partners, LLC.
Accordingly, Century American Insurance Company is no longer a reporting
person with respect to the Schedule 13D.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Dr. Scott currently may be deemed to be the beneficial owner of
18,671,262 shares, or 49.1%, 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 37,621,750 shares of
Common Stock. In addition, as described more fully below, Dr. Scott holds
the Issuer's $2,000,000 10% Convertible Debenture due July 1, 1998 (the
"Convertible Debenture") which, at Dr. Scott's option, is convertible at
maturity, in whole or in part, into shares of Common Stock and into shares
of the Issuer's Series D Convertible Preferred Stock, par value $.01 per
share (the "Series D Stock"), with the maximum number of shares of Common
Stock issuable in the event of conversion being equal to one percent of the
Issuer's outstanding Common Stock, or 376,217 shares of Common Stock. For
purposes of this Schedule 13D, it is assumed that Dr. Scott would exercise
his right to convert the Convertible Debenture, and that he would acquire
376,217 shares of Common Stock upon such conversion, although Dr. Scott has
made no determinations in this regard. Accordingly, it is assumed for all
purposes of this Schedule 13D that Dr. Scott is the beneficial owner of
such 376,217 shares of Common Stock and that such shares are to be added to
the 37,621,750 shares of Common Stock currently outstanding for a total of
37,997,967 shares of Common Stock outstanding.
Dr. Scott acquired the Convertible Debenture on May 1, 1998 from
Bertram E. Walls, M.D. ("Dr. Walls") by issuing to Dr. Walls a 10%
promissory note in the principal amount of $2,032,222.22. Dr. Walls is a
director of the Issuer, and is employed by certain entities controlled by
Dr. Scott.
Pursuant to the terms of the Convertible Debenture, in the event
of conversion Dr. Scott would be entitled to receive shares of Series D
Stock as well as shares of Common Stock. Each Series D Stock generally will
be entitled ten votes per share and, subject to the approval of the
Issuer's shareholders, is convertible into ten shares of the Issuer's
Common Stock.
The Convertible Debenture provides that the conversion price for each
share of Common Stock shall be the lower of (i) the average closing price
for shares of Common Stock on the New York Stock Exchange for the ten days
immediately prior to March 3, 1998 or (ii) the average closing price for
shares of Common Stock on the New York Stock Exchange for the ten trading
days immediately prior to the date of maturity of the Convertible
Debenture, and that the conversion price for each share of Series D Stock
shall be ten times the conversion price of the Common Stock. The average
closing price for shares of Common Stock during the ten trading days prior
to March 3, 1998 (February 17, 1998 through March 2, 1998) was $.85 per
share. If $.85 per share is, in fact, the conversion price, the Convertible
Debenture would be convertible into 376,217 shares of Common Stock and
197,672 shares of Series D Stock, which Series D Stock would be
convertible, upon stockholder approval, into 1,976,720 shares of Common
Stock. If the conversion price, as measured by the average closing price
for shares of Common Stock during the ten trading days prior to the date of
maturity of the Convertible Debenture, is less than $.85 per share, the
number of shares of Series D Stock issuable upon conversion of the
Convertible Debenture and, thus, the number of shares of Common Stock
issuable upon conversion of the Series D Stock, would increase. Dr. Scott
has no present intention of seeking approval of the Issuer's stockholders
for the conversion of the shares of Series D Stock and, accordingly, such
shares of Common Stock are not deemed to be beneficially owned by Dr. Scott
and are not included in this Schedule 13D as shares of Common Stock
beneficially owned by him.
From time to time Dr. Scott and certain entities controlled by him have
transferred to one another shares of Common Stock.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
On May 1, 1998, Dr. Scott acquired the Convertible Debenture from
Dr. Walls. See Item 3 above. On February 9, 1998, Dr. Scott transferred an
aggregate of 125,000 shares of Common Stock to his five children, in equal
portions, as a gift. Dr. Scott does not have any voting or dispositive
power with respect to such 125,000 shares of Common Stock gifted to his
children. Accordingly, Dr. Scott is not deemed to be the beneficial owner
of the shares of Common Stock gifted to his children and such shares are
not included in the 18,671,262 shares of Common Stock reported herein as
being beneficially owned by Dr. Scott.
As discussed above in Item 3, Dr. Scott currently may be deemed to
be the beneficial owner of 18,671,262 shares, or 49.1%, 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:
Percent of
Name of Person/Entity Shares Owned Outstanding
- ------------------------------ --------------------- -------------------
Dr. Scott 8,523,9321 22.4%
Scott Medical Partners, LLC 7,138,311 18.8%
DHP 1,500,000 4.0%
The Signal Fund, L.P. 815,000 2.2%
The Steven M. Scott
Family Limited Partnership 535,766 1.4%
The Scott Family Foundation, Inc 39,110 0.1%
S&WLP 119,143 0.3%
- -------------------------
1 Includes 376,217 shares of Common Stock issuable to Dr. Scott in the
event of conversion of the Convertible Debenture (see Item 3 above),
and 2,392 shares of Common Stock subject to an option exercisable
within 60 days. Does not include shares of Common Stock issuable upon
conversion of the Series D Stock. See Item 3 above. Does not include
10,000 shares of Common Stock owned by Dr. Scott's wife in a personal
IRA account. Dr. Scott expressly disclaims any beneficial ownership of
the shares of Common Stock (i) issuable upon conversion of the Series D
Stock and (ii) held in his wife's IRA account.
Of the 18,671,262 shares of Common Stock beneficially owned by Dr.
Scott, Dr. Scott (i) has sole voting power over 18,016,353 shares, (ii)
shares voting power over 654,909 shares with Dr. Walls, (iii) has sole
dispositive power over 18,016,353 shares, and (iv) shares dispositive power
over 654,909 shares with Dr. Walls.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1: Joint Filing Agreement of Steven M. Scott, M.D., Scott
Medical Partners, LLC,
The Signal Fund, L.P., The Steven M. Scott Family Limited
Partnership, DHP,
The Scott Family Foundation, Inc. and S&WLP, pursuant to
Rule 13d-1(f).
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 12, 1998
/s/ Steven M. Scott, M.D.
----------------------------------
Steven M. Scott, M.D.
SCOTT MEDICAL PARTNERS, LLC
By: /s/ Bertram E. Walls, M.D.
-------------------------------
Name: Bertram E. Walls, M.D.
Title: Manager
THE SIGNAL FUND, L.P.
By: /s/ Bertram E. Walls, M.D.
-------------------------------
Name: Bertram E. Walls, M.D.
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
DOCTORS HEALTH PLAN, INC.
By: /s/ Bertram E. Walls, M.D.
-------------------------------
Name: Bertram E. Walls, M.D.
Title: President
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 Doctors Health Plan, Inc.
BERTRAM E. WALLS, M.D. President, Chief Executive Officer
and Director
(a) Business Address: Doctors Health Plan, Inc.
2828 Croasdaile Drive
Durham, North Carolina 27705
(b) Principal Occupation President and Chief Executive Officer
or Employment: of Doctors Health Plan, Inc.; Member
of the Board of Directors of Coastal
Physician Group, Inc.
(c) CITIZENSHIP United States
ARTHUR CARLSON Director
(a) Business Address: Health Plan Southeast
3520 Thomasville Road
Suite 200
Tallahassee, Florida 32308
(b) Principal Occupation Chief Financial Officer of Health
or Employment: Plan Southeast
(c) CITIZENSHIP: United States
PATRICK McINTYRE Secretary
(a) Business Address: Doctors Health Plan, Inc.
2828 Croasdaile Drive
Durham, North Caroline 27705
(b) Principal Occupation Vice President Operations - Finance
or Employment:
(c) CITIZENSHIP United States
KELLEY CARTER Assistant Secretary
(a) Business Address: Doctors Health Plan, Inc.
2828 Croasdaile Drive
Durham, North Caroline 27705
(b) Principal Occupation Executive Assistant
or Employment:
(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 Amendment No. 2 to 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 12th day of
June, 1998.
/s/ Steven M. Scott, M.D.
----------------------------------
Steven M. Scott, M.D.
SCOTT MEDICAL PARTNERS, LLC
By: /s/ Bertram E. Walls, M.D.
-------------------------------
Name: Bertram E. Walls, M.D.
Title: Manager
THE SIGNAL FUND, L.P.
By: /s/ Bertram E. Walls, M.D.
-------------------------------
Name: Bertram E. Walls, M.D.
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
DOCTORS HEALTH PLAN, INC.
By: /s/ Bertram E. Walls, M.D.
-------------------------------
Name: Bertram E. Walls, M.D.
Title: President
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
