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REGISTRATION NO. 33-98530
RULE 424(b)(5)
SUPPLEMENT
TO PROSPECTUS, DATED NOVEMBER 15, 1995
PHYCOR, INC.
$90,000,000
COMMON STOCK, COMMON STOCK WARRANTS AND DEBT SECURITIES
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The Prospectus, dated November 15, 1995 (the "Prospectus"), to which
this Supplement, dated May 16, 1996 is attached, relates to the offer by
PhyCor, Inc., a Tennessee corporation (the "Company"), of shares of the
Company's Common Stock, no par value ("Common Stock"), warrants to purchase
Common Stock ("Common Stock Warrants") and the shares of Common Stock issued
thereunder upon the exercise of such Common Stock Warrants, or debt securities
("Debt Securities") and the shares of Common Stock issued thereunder upon the
conversion thereof, with a collective aggregate offering price of up to
$90,000,000 on terms to be determined at the time of any such offering. The
Company may offer Common Stock, Common Stock Warrants, or Debt Securities
(collectively, "Securities") from time to time in connection with the
acquisitions of the assets or stock of (i) individual physician practices, (ii)
single and multi-specialty medical clinics and (iii) related businesses,
including, but not limited to, management services organizations, consulting
firms and other physician management companies. The consideration for the
acquisition of the assets or stock of such entities may consist of cash, the
assumption of liabilities, Securities, or any combination thereof, as
determined pursuant to arms-length negotiations between the Company and the
sellers of the assets or stock to be acquired.
This Supplement relates to the proposed issuance of a Common Stock
Warrant to purchase an aggregate of 33,472 shares of Common Stock (the
"Warrant") to Carolina Primary Care, L.L.C., a South Carolina limited liability
company ("CPC") as partial consideration for the acquisition by the Company of
substantially all of the operating assets of CPC. Terms defined in the
Prospectus have the same meaning in this Supplement unless the context
otherwise required.
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
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The date of this Supplement is May 16, 1996.
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Terms of the Acquisition
Pursuant to an Asset Purchase Agreement, dated as of April 1, 1996, the
Company acquired substantially all of the operating assets of CPC. In partial
consideration therefor, the Company issued the Warrant to CPC.
In connection with the acquisition of the assets of CPC, CPC entered
into a service agreement (the "Service Agreement"), effective as of April 1,
1996, with PhyCor of Columbia, Inc., a Tennessee corporation
("PhyCor-Columbia"). Pursuant to the Service Agreement, PhyCor-Columbia will
provide CPC with equipment and facilities used in the medical practice of CPC,
manage CPC operations and employ CPC's non-medical professional personnel in
exchange for a service fee. The Service Agreement will operate for a term of
40 years and may only be terminated in limited circumstances.
The Warrant provides that upon exercise, CPC may purchase an aggregate
of 33,472 shares of Common Stock (the "Warrant Shares") at an exercise price of
$44.813 per share. CPC may exercise the Warrant as follows: 33 1/3% of the
Warrant Shares may be purchased on or after April 1, 1999, 33 1/3% of the
Warrant Shares may be purchased on or after April 1, 2000 and 33 1/3% of the
Warrant Shares may be purchased on or after April 1, 2001. The Warrant will
expire in accordance with its terms on April 1, 2002. Notwithstanding the
foregoing however, the Warrant shall not be exercisable by CPC if, at the time
of exercise, (i) the Service Agreement is not in full force and effect or (ii)
CPC has given notice of termination thereunder.
