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REGISTRATION NO. 33-98528
RULE 424(b)(5)
AMENDMENT TO SUPPLEMENT
TO PROSPECTUS, DATED NOVEMBER 25, 1997
PhyCor, Inc.
3,000,000 Shares
Common Stock
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The Prospectus, dated November 25, 1997 (the "Prospectus"), to which
this Amendment to Supplement, dated December 18, 1997, is attached (the
"Supplement"), relates to the resale by the holders thereof (the "Selling
Shareholders") of up to 3,000,000 shares (the "Shares") of the Company's Common
Stock issued without registration under the Securities Act of 1933, as amended
(the "Securities Act"), in transactions not involving public offerings in
connection with the Company's affiliation and long-term relationships with
single- and multi-specialty medical clinics, individual physician practices and
related businesses, including, but not limited to, management services
organizations, consulting firms and other physician management companies. In
addition, the Prospectus also relates to the resale by certain Selling
Shareholders of Common Stock issued without registration under the Securities
Act in transactions not involving public offerings upon the exercise of (i)
options granted by the Company prior to the adoption by the Company of its stock
incentive plans; and (ii) stock purchase warrants issued, or to be issued from
time to time, in connection with financing activities, acquisitions and related
transactions, including, but not limited to, (A) warrants issued as
consideration for consulting or other services provided or to be provided to the
Company and the execution of a management or service agreement with the Company
or an affiliate and (B) warrants issued by the Company to holders of shares of
Common Stock of PhyCor Management Corporation, an entity in which the Company
owns a minority equity interest.
This Amendment to Supplement amends the Supplement to Prospectus
originally filed with the Securities and Exchange Commission on February 5,
1997. This Amendment to Supplement relates to the proposed resale of 97,170
shares of the Company's Common Stock by Northeast Arkansas Internal Medicine
Clinic, P.A., an Arkansas professional association (the "Clinic"). Such shares
were issued to the Clinic upon the partial conversion of a 7.0% Subordinated
Convertible Note in the aggregate principal amount of $1,925,736 (the
"Conversion Note"). The Company issued the Conversion Note and two additional
7.0% Convertible Subordinated Notes in the principal amount of $2,167,113
(collectively with the Conversion Note, the "Purchase Notes") to the Clinic in
connection with the acquisition by PhyCor of Northeast Arkansas, Inc., a
Tennessee corporation and wholly-owned subsidiary of the Company
("PhyCor-Arkansas"), of certain assets of the Clinic pursuant to an Asset
Purchase Agreement between PhyCor and the Clinic effective as of March 1, 1995
(the "Purchase Agreement").
Terms defined in the Prospectus have the same meaning in this Amendment
to Supplement unless the context requires otherwise. All share numbers used
herein give effect to a three-for-two stock split of the Common Stock effected
June 14, 1996 in the form of a 50% stock dividend.
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The date of this Amendment to Supplement is December 18, 1997.
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THIS AMENDMENT TO 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.
Selling Shareholder
The Clinic operates a multi-specialty medical clinic in Jonesboro, Arkansas
and maintains four satellite locations in the area. The Clinic's principal
office is located at 311 East Matthews, Jonesboro, Arkansas 72401.
The Company, through PhyCor-Arkansas, acquired substantially all of the
assets of the Clinic pursuant to the Purchase Agreement. In connection
therewith, the Company issued the Purchase Notes to the Clinic in a transaction
exempt from the registration requirements of the Act. On April 15, 1996, the
Clinic converted certain of the Purchase Notes, in accordance with their terms,
into an aggregate of 151,636 shares of PhyCor Common Stock. The Clinic resold
such shares pursuant to a Prospectus Supplement dated April 15, 1996. On October
21, 1996, the Clinic converted certain of the Purchase Notes, in accordance with
their terms, into an aggregate of 11,724 shares of PhyCor Common Stock. The
Clinic resold such shares pursuant to a Prospectus Supplement dated October 21,
1996. On January 24, 1997, the Clinic partially converted the Conversion Note,
in accordance with its terms, into an aggregate of 128,101 shares of Common
Stock. At such time, 14,112 of such shares were distributed to certain existing
shareholders of the Clinic on a pro rata basis based on such shareholders'
ownership of the Clinic. The Clinic resold 16,819 of the shares issued upon
conversion of the Note pursuant to a Prospectus Supplement dated January 29,
1997. The Clinic intends to resell the remaining 97,170 shares (the "Shares")
pursuant to the terms of the Prospectus and this Amendment to Supplement.
In connection with the acquisition of the assets of the Clinic,
PhyCor-Arkansas entered into a Service Agreement, effective as of March 1, 1995
(the "Service Agreement") with the Clinic. Pursuant to the Service Agreement,
PhyCor-Arkansas will provide the Clinic with the equipment and facilities used
in the medical practice of the Clinic, manage Clinic operations and employ the
Clinic's non-medical professional personnel in exchange for a service fee. The
Service Agreement will be for a term of 40 years and may only be terminated in
limited circumstances.
Plan of Distribution
This Amendment to Supplement relates to the reoffering of the Shares by the
Clinic. The Clinic has designated Equitable Securities Corporation
("Equitable"), a registered broker-dealer, as agent for the resale of the
Shares. The Shares will be sold in private or block transactions in the
over-the-counter market (including the Nasdaq Stock Market (National Market
System)) or otherwise at fixed prices which may be charged, at market prices
prevailing at the time of the sale, at prices related to such prevailing market
price, or at negotiated prices. Equitable has agreed to use its best efforts to
sell the Shares on behalf of the Clinic. The Clinic and/or Equitable may effect
such transactions by selling the Shares to or through other broker-dealers, and
such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Clinic, Equitable and/or the purchasers of
the 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
may be in excess of customary commissions). The Clinic and/or Equitable and any
broker-dealers that act in connection with the sale of the Shares may be deemed
to be an "underwriter" within the meaning of Section 2(11) of the Act, and any
commissions received by (or discounts allowed to) them and any profit on the
resale of the Shares as principal may be deemed to be underwriting discounts and
commissions.
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