NORTH CAROLINA                                                SECOND AMENDMENT
                                                                     TO
DURHAM COUNTY                                               EMPLOYMENT AGREEMENT

     THIS SECOND  AMENDMENT TO EMPLOYMENT  AGREEMENT (this  "Amendment") is made
and  entered  into  effective  the 1st  day of  September,  1999 by and  between
PHYAMERICA  PHYSICIAN  GROUP,  INC.,  f/k/a COASTAL  HEALTHCARE  GROUP,  INC., a
Delaware corporation ("Corporation"), and STEVEN M. SCOTT, M.D. ("Employee").

                               W I T N E S S E T H
                               -------------------

     WHEREAS,   Corporation  and  Employee  have  previously   entered  into  an
employment  agreement dated April 1, 1991, and an amendment  thereto dated April
1, 1994  (collectively,  the  "Employment  Agreement")  under which  Employee is
currently employed by Corporation; and

     WHEREAS,  Corporation  and Employee  desire to modify the existing terms of
employment of Employee to increase his annual salary;

     NOW,  THEREFORE,  for and in  consideration  of the  mutual  covenants  and
agreements  hereinafter  set forth,  the  receipt and  sufficiency  of which are
hereby acknowledged, the parties agree as follows:

     1. Paragraph 3(a) of the Employment Agreement shall be amended effective as
of September 1, 1999, to read as follows:

          (a) An  annual  salary of Five  Hundred  Thousand  Dollars  ($500,000)
     payable  in  twelve  equal  monthly  installments  in  accordance  with the
     Corporation's  payroll  policies.  The  annual  salary  shall  be  reviewed
     annually,  and  may be  increased  in the  discretion  of the  Compensation
     Committee of the Corporation's Board of Directors.

          2.  Except as  specifically  modified as set forth  above,  all of the
     remaining  terms,  conditions  and  covenants of the  Employment  Agreement
     between  Corporation  and Employee are hereby ratified and confirmed in all
     respects.

<PAGE>

IN WITNESS  WHEREOF,  Corporation has caused this Amendment to be executed under
its  seal  and by  its  duly  authorized  officers,  upon  the  approval  by the
Compensation Committee of the Board of Directors,  and Employee has hereunto set
his hand and seal as of the day and year first above written.

                                         PHYAMERICA PHYSICIAN GROUP, INC.

                                         By:________________________________

ATTEST:

----------------------
Secretary

[Corporate Seal]

                                         EMPLOYEE:

                                         _______________________________(SEAL)
                                         Steven M. Scott, M.D.

<PAGE>

NORTH CAROLINA

DURHAM COUNTY

     I,  __________________________________,  a Notary  Public of the  aforesaid
County and State,  do hereby  certify  that  _______________________  personally
appeared before me this day and acknowledged that (s)he is the ______________ of
PhyAmerica Physician Group, Inc., a Delaware corporation,  and that by authority
duly given and as an act of the corporation, the foregoing instrument was signed
in  its  name  by  its   ___________,   and  attested  by   herself/himself   as
____________________, and sealed with its common corporate seal.

     Witness my hand and notarial seal this ____ day of _____________, 1999.


                                         ----------------------------
                                                Notary Public

My Commission Expires:

----------------------


NORTH CAROLINA

DURHAM COUNTY

     I, _______________________________, a Notary Public of the aforesaid County
and State,  do hereby  certify that Steven M. Scott,  M.D.  personally  appeared
before me this day and acknowledged the execution of the foregoing instrument.

     Witness my hand and notarial seal this ____ day of _________, 1999.

                                         ------------------------------
                                                Notary Public

My Commission Expires:

----------------------