-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LJL0FibP4ZmMQw/rwIjyELbb2MmSDz43yiyFxy3V0CKl81Kd+FdSI6q1M8XmVTal YDIP37XfvHqJ+6s6PcIJ7g== 0000889812-96-001330.txt : 19960921 0000889812-96-001330.hdr.sgml : 19960921 ACCESSION NUMBER: 0000889812-96-001330 CONFORMED SUBMISSION TYPE: DFAN14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19960919 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: COASTAL PHYSICIAN GROUP INC CENTRAL INDEX KEY: 0000874787 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HELP SUPPLY SERVICES [7363] IRS NUMBER: 561379244 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DFAN14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-13460 FILM NUMBER: 96632305 BUSINESS ADDRESS: STREET 1: 2828 CROASDAILE DR CITY: DURHAM STATE: NC ZIP: 27705 BUSINESS PHONE: 9193830355 MAIL ADDRESS: STREET 1: 2828 CROASDAILE DR CITY: DURHAM STATE: NC ZIP: 27704 FORMER COMPANY: FORMER CONFORMED NAME: COASTAL HEALTHCARE GROUP INC DATE OF NAME CHANGE: 19930328 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SCOTT STEVEN M MD CENTRAL INDEX KEY: 0001018489 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: DFAN14A BUSINESS ADDRESS: STREET 1: 3711 STONEYBROOK DR CITY: DURHAM STATE: NC ZIP: 27705 MAIL ADDRESS: STREET 1: SCOTT STEVEN M MD STREET 2: 3711 STONEYBROOK DRIVE CITY: DURHAM STATE: NC ZIP: 27705 DFAN14A 1 ADDITIONAL PROXY SOLICITING MATERIALS Securities and Exchange Commission Washington, D.C. 20549 SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(A) of the Securities Exchange Act of 1934 Filed by the Registrant [ ] Filed by a Party other than the Registrant [X] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Definitive Proxy Statement [ ] Definitive Additional Materials [X] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 Coastal Physician Group, Inc. (Name of Registrant as Specified in its Charter) Steven M. Scott, M.D. (Name of Person Filing Proxy Statement) ------------------------------ Payment of Filing Fee (Check the appropriate box): [ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(j)(2). [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: N/A (2) Aggregate number of securities to which transaction applies: N/A (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): N/A (4) Proposed maximum aggregate value of transaction: N/A (5) Total fee paid: N/A [X] Fee previously paid with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount previously paid: (2) Form, Schedule or Registration Statement Number: (3) Filing Party: (4) Date Filed: STEVEN M. SCOTT, M.D. 3711 Stoneybrook Drive o Durham, North Carolina 27705 September 19, 1996 Dear Fellow Shareholder: With the Coastal Physician Group, Inc. Shareholders' Meeting now only about a week away, I am writing one last time to ask you to join with me in urging the Board of Directors to take prompt action to maximize the value of all of our Coastal shares. This Shareholders' Meeting on September 27 may be our last opportunity for a long time to let Coastal's Board and management know what we want them to do. Our message should be clear and unambiguous: o TAKE PROMPT ACTION TO MAXIMIZE SHAREHOLDER VALUE NOW. o GIVE IMMEDIATE CONSIDERATION TO SELLING COASTAL IN ITS ENTIRETY. o It's time for Coastal's management and Board to stop talking about "pursuing all available alternatives" -- something that could go on endlessly -- while management continues to be compensated handsomely. o Do whatever is necessary to REDUCE THE FINANCIAL BURDEN of paying up to a total of $6,000,000 A YEAR to Coastal's three senior officers -- all of whom sit on Coastal's Board of Directors -- and an outside consulting firm. LONG ON TALK -- SHORT ON ACTION When Coastal's management tells you "we are extremely pleased with our progress so far and we look forward to sharing our ongoing results with you in the weeks ahead" -- PRESUMABLY AFTER THE VOTE ON SEPTEMBER 27 -- I ask you to consider the following: 1. At a time when Coastal's management talks a lot about its various plans to sell assets, seek an equity infusion or even consider a sale of the entire company, THE FACT IS THAT COASTAL HAS BEEN WITHOUT AN OUTSIDE FINANCIAL ADVISOR SINCE MORGAN STANLEY & CO. RESIGNED ITS ENGAGEMENT IN MID-AUGUST -- MORE THAN FIVE WEEKS AGO. More than FOUR WEEKS have now gone by since Coastal publicly announced its intention to engage a new investment banker as its "lead financial advisor" to replace Morgan Stanley. 2. Since Coastal announced on July 9, 1996 its "comprehensive financial and strategic plan" to dispose of certain "non-strategic assets", IT HAS DISPOSED OF NO ASSETS, except that earlier this week Coastal announced it had entered into an agreement to sell certain assets of its Maryland clinic operations. This, in fact, is a transaction that was initiated in early 1996, long before Coastal announced its non-strategic asset disposition plan in early July -- and I believe it can hardly be char- acterized as an achievement of current management in furtherance of its asset divestiture plan. IN MY VIEW, THE MOST NOTABLE THING ABOUT THIS TRANSACTION IS HOW LONG IT HAS TAKEN FOR MANAGEMENT TO GET IT DONE. 3. On the last trading day before Coastal announced its pending sale of certain assets of the Maryland clinic operations, Coastal stock closed at $6 7/8. On September 16, 1996, the day of the announcement, Coastal stock fell by more than 5%. By September 18, 1996, Coastal stock declined even further to $5 7/8 -- A TOTAL DECLINE OF MORE THAN 14% IN THE THREE DAYS FOLLOWING THIS ANNOUNCEMENT. 4. In Coastal's September 16 press release, its President and Chief Executive Officer was quoted as stating: "We intend to continue on our aggressive path toward revitalizing the Company through the sale of certain assets, while simultaneously improving Coastal's core operations and evaluating strategic alternatives to maximize shareholder value." IT IS APPARENT TO ME THAT THE MARKETPLACE DID NOT REACT FAVORABLY TO THIS ANNOUNCEMENT THAT COASTAL IS CONTINUING TO PURSUE ITS PIECEMEAL ASSET SALE PROGRAM. While I fully expect to hear Coastal's management talk more about its various plans in the final days of this proxy contest, I see no evidence AT ALL that Coastal's Board and management are prepared to move forward to successfully maximize shareholder value once the September 27 Shareholders' Meeting has come and gone. IT'S TIME TO ACT NOW! In a recent letter to you, Coastal's management asserted "it's time to give our approach for Coastal a chance through the continuation of our comprehensive plan." I DON'T THINK THAT WE, AS SHAREHOLDERS, SHOULD RISK TAKING A CHANCE WHILE WE WAIT FOR MANAGEMENT'S FUTURE PLANS TO PLAY OUT OVER AN INDETERMINITE PERIOD OF TIME -- nor do I believe we can rely on management to show the will and determination to make the hard choices necessary to maximize the value of our investment now. 2 I have said repeatedly that I believe prompt action is needed, and that Coastal and its shareholders cannot wait while management pursues its non-strategic asset disposition plan. Here is what an independent publication, Mergers & Acquisitions Report, recently said in an article titled "TIME RUNNING OUT FOR COASTAL":* "Most analysts have stopped covering Coastal Physician Group Inc. as the company labors to overcome a variety of problems and raise funds to cover a big bank debt within the next four months. * * * The cessation of coverage reflects the deep problems faced by this diverse medical-services business, which is headquartered in Durham, N.C." I, too, believe that time may be running out for Coastal, and I and my two nominees believe that prompt consideration should be given to a sale of Coastal in its entirety. --------------- I know that during the past month you have received numerous mailings both from Coastal and from me. These letters are typical in a proxy contest, since it is you -- Coastal's shareholders -- who are being asked to make a key decision about the future of your investment in Coastal. It is also important for Coastal that this contest be brought to a conclusion and that the Shareholders' Meeting be held, as scheduled, on September 27, with no postponement or delay. Time is short and it is important that your shares be voted, no matter how many or how few shares you own. Please vote today on the enclosed BLUE proxy card. Once again, I thank you for your careful attention to the issues, and for your consideration and support throughout this proxy contest. Sincerely, /s/ Steven M. Scott, M.D. Steven M. Scott, M.D. - --------------- * Article by Mark S. Porter, Mergers & Acquisitions Report, Vol. 9, No. 38, September 16, 1996. Dr. Scott has neither sought nor obtained permission from the author or the publication for the use of such material in connection with his solicitation of proxies. 3 If your shares of Common Stock are held in the name of a bank or brokerage firm, only that firm can execute a proxy card on your behalf. Please contact the person responsible for your account and give instructions for a BLUE PROXY CARD TO BE VOTED FOR PROPOSALS 1, 2 AND 4 AND AGAINST PROPOSAL 3. Do not sign any white proxy card you may receive from Coastal, even as a protest vote against Coastal's Board and management. If you have questions or need assistance in voting your shares, please contact the firm assisting me in the solicitation of proxies: GEORGESON & COMPANY INC. WALL STREET PLAZA NEW YORK, NEW YORK 10005 TOLL FREE: 1-800-223-2064 BANKS & BROKERS CALL: 212-440-9800 4 DO NOT SIGN OR RETURN ANY WHITE PROXY CARD SENT TO YOU BY COASTAL'S MANAGEMENT OR BOARD OF DIRECTORS 1. Do NOT sign any white proxy cards even as a protest vote against Coastal's Board and management. Execution of a white proxy card will revoke any BLUE proxy card you previously sent to Dr. Scott. 2. You can vote 'FOR' Dr. Scott's two nominees ONLY on the BLUE proxy card. Checking the 'withhold authority' box on Coastal's white proxy card will NOT be counted as a vote in favor of Dr. Scott's nominees. 3. If you previously signed and returned a white proxy card, or think you may have done so, you have every right to change your mind. Only your latest date proxy card will count. You may revoke any earlier white proxy card returned to Coastal by signing, dating and mailing the enclosed BLUE proxy card in the postage-paid envelope provided. If you have questions or need assistance in voting your shares, please contact the firm assisting me in the solicitation of proxies: GEORGESON & COMPANY, INC. WALL STREET PLAZA NEW YORK, NEW YORK 10005 TOLL FREE: 1-800-223-2064 BANKS & BROKERS CALL: 212-440-9800 Steven M. Scott, M.D. September 19, 1996 -----END PRIVACY-ENHANCED MESSAGE-----