<PAGE> 1
FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION NO. 33-98528
SUPPLEMENT
TO PROSPECTUS, DATED MAY 3, 1996
PHYCOR, INC.
3,000,000 SHARES
COMMON STOCK
-----------------------------
The Prospectus, dated May 3, 1996 (the "Prospectus"), to which
this Supplement, dated August 6, 1996, is attached (the "Supplement"), relates
to the resale by the holders thereof of up to 3,000,000 shares of the Company's
Common Stock, no par value per share ("Common Stock"), issued upon the
conversion of subordinated convertible notes issued or to be issued by the
Company without registration under the Securities Act of 1933, as amended (the
"Act") in connection with the acquisition of the assets of (i) single and
multi-specialty medical clinics, (ii) the assets of individual physician
practices and (iii) the assets of related businesses, including, but not
limited to, management services organizations, consulting firms and other
physician management companies. In addition, this Prospectus also relates to
the resale by certain holders of Common Stock issued upon the exercise of
options granted by the Company prior to the adoption by the Company of its
stock incentive plans and warrants issued as consideration for (i) consulting
or other services provided or to be provided to the Company and (ii) the
execution of a management or service agreement with the Company or an
affiliate.
Pursuant to an Asset Purchase Agreement, effective as of July
1, 1995 (the "Purchase Agreement"), PhyCor of Mesa, Inc., a Tennessee
corporation and wholly-owned subsidiary of the Company ("PhyCor-Mesa"),
acquired substantially all of the operating assets of Casa Blanca Clinic, Ltd.,
an Arizona professional corporation (the "Clinic"). In connection with this
transaction, the Company issued a 7.0% Subordinated Convertible Note in the
principal amount of $617,237 (the "Purchase Note") to the Clinic. On June 28,
1996, the Clinic converted the Purchase Note, in accordance with its terms,
into an aggregate of 39,592 shares of Common Stock. Following the conversion
of the Purchase Note, the Clinic sold 36,509 shares of Common Stock pursuant to
a Supplement to the Prospectus, dated July 10, 1996 and an Amendment to
Prospectus Supplement, dated August 6, 1996. The remaining 3,083 shares of
Common Stock (the "Resale Shares") were distributed to Alan Y.M. Chang, one of
the Clinic's existing shareholders (the "Physician"), on a pro rata basis.
Terms defined in the Prospectus have the same meaning in this
Supplement unless the context otherwise requires. All share numbers used
herein give effect to a three-for-two stock split of the Common Stock effected
on June 14, 1996 in the form of a 50% stock dividend.
THIS SUPPLEMENT INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE
NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON
WRITTEN OR ORAL REQUEST, AT NO CHARGE, FROM THE COMPANY. REQUESTS SHOULD BE
DIRECTED TO PHYCOR, INC., 30 BURTON HILLS BOULEVARD, SUITE 400, NASHVILLE,
TENNESSEE 37215, ATTENTION: N. CAROLYN FOREHAND, VICE PRESIDENT AND GENERAL
COUNSEL.
-----------------------------
The date of this Supplement is August 6, 1996.
<PAGE> 2
Selling Shareholders
The Physician is licensed to practice medicine pursuant to the
laws of the State of Arizona and practiced medicine through the Clinic prior to
the transaction noted above. The Company, through PhyCor-Mesa, acquired
substantially all of the assets of the Clinic pursuant to the Purchase
Agreement. In connection therewith, the Company issued the Purchase Note to
the Clinic in a transaction exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Act"), and on June 28, 1996, the
Clinic converted the Purchase Note, in accordance with its terms, into an
aggregate of 39,592 shares of Common Stock. Of these shares, 36,509 shares
were resold by the Clinic pursuant to a Supplement to the Prospectus, dated
July 10, 1996 and an Amendment to Prospectus Supplement, dated August 6, 1996.
The Resale Shares were then distributed to the Physician on a pro rata basis.
The Resale Shares may be resold by the Physician through a registered
broker-dealer in accordance with the terms of the Prospectus.
Plan of Offering
This Supplement relates to the reoffering, from time to time,
of the Resale Shares through a registered broker-dealer. The resale of the
Resale Shares will be effected through a registered broker-dealer in private or
block transactions in the over-the-counter market (including The Nasdaq Stock
Market's National Market) or otherwise at fixed prices which may be changed, at
market prices prevailing at the time of the sale, at prices related to such
prevailing market price, or at negotiated prices. The broker-dealer may effect
such transactions by selling the Resale Shares to or through other
broker-dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the purchasers of the Resale Shares
for whom such broker-dealers may act as agent or to whom they may sell as
principal, or both (which compensation as to a particular broker-dealer might
be in excess of customary commissions). As a result of the reoffering of the
Resale Shares pursuant to the Prospectus, as supplemented hereby, the Company
and the respective broker-dealer may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Act.
2
