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REGISTRATION NO. 33-66210
RULE 424(b)(5)
SECOND AMENDED SUPPLEMENT
TO PROSPECTUS, DATED AUGUST 28, 1996
PHYCOR, INC.
5,062,500 SHARES
COMMON STOCK
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The Prospectus, dated August 28, 1996 (the "Prospectus"), to which this
Second Amended Supplement, dated June 27, 1997, is attached (the "Second Amended
Supplement"), relates to an aggregate of up to 5,062,500 shares of Common Stock,
no par value per share (the "Common Stock") of PhyCor, Inc. (the "Company") to
be issued in transactions involving the acquisition of the assets or stock of
individual physician practices and single and multi-specialty medical clinics.
This Second Amended Supplement amends the Amended Supplement dated
September 8, 1995. This Second Amended Supplement relates to the proposed resale
by Casa Blanca Clinic, Ltd., an Arizona professional corporation (the "Clinic"),
of 39,592 shares of the Company's Common Stock issued to the Clinic upon the
conversion of two 7.0% Subordinated Convertible Notes (the "Purchase Notes").
The Company issued the Purchase Notes to the Clinic in connection with the
acquisition by PhyCor of Mesa, Inc., a Tennessee corporation and wholly-owned
subsidiary of the Company ("PhyCor-Mesa"), of certain assets of the Clinic
pursuant to an Asset Purchase Agreement between PhyCor and the Clinic effective
as of July 1, 1995 (the "Purchase Agreement").
In addition, this Second Amended Supplement also relates to the proposed
resale by Casa Blanca Clinic I, P.L.L.C, an Arizona professional limited
liability company and successor entity to the Clinic (the "PLLC"), of 435,255
shares of the Company's Common Stock issued to the PLLC upon the conversion of
one 7.0% Subordinated Convertible Note (the "Interim Note"). The Company issued
the Interim Note to the PLLC in consideration of the execution by the Clinic of
an Interim Management Agreement (the "Management Agreement") between the Company
and the Clinic and the affiliation of the physicians employed by the Clinic with
the PLLC as of the closing under the Purchase Agreement (the "Closing"). The
execution of the Interim Agreement was a condition precedent to the Closing.
Terms defined in the Prospectus have the same meaning in this Second
Amended Supplement unless the context requires otherwise. All share numbers give
effect to three-for-two stock splits of the Common Stock effected on September
15, 1995 and June 14, 1996 in the form of 50% stock dividends.
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The date of this Second Amended Supplement is June 27, 1997.
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THIS SECOND AMENDED 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 PHYCOR. 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 Shareholders
The Clinic, an Arizona professional corporation, operates a multi-specialty
medical clinic in Mesa, Arizona and maintains four satellite locations in the
area. The Clinic's principal office is located at 3921 East Baseline Road,
Gilbert, Arizona 85234.
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 Notes to the Clinic in a transaction exempt from the
registration requirements of the Securities Act of 1933, as amended (the "Act").
On September 7, 1995, the Clinic converted one of the Purchase Notes, in
accordance with its terms, into 356,022 shares of Common Stock. The Clinic
resold such shares pursuant to the Prospectus. On June 29, 1996, the Clinic
converted the other Purchase Note, in accordance with its terms, into 39,592
shares of Common Stock. Of such shares, 36,509 shares (the "Purchase Shares")
are to be resold by the Clinic in accordance with the terms of the Prospectus.
The remaining 3,083 shares were distributed to an existing shareholder of the
Clinic.
In connection with the acquisition of the assets of the Clinic, PhyCor-Mesa
entered into the Management Agreement with the Clinic. In consideration of the
execution of the Management Agreement and the affiliation of the physicians
employed by the Clinic with the PLLC as of the Closing, the Company issued the
Interim Note to the PLLC in a transaction exempt from the registration
requirements of the Act. On September 7, 1995, the PLLC converted the Interim
Note, in accordance with its terms, into 435,255 shares of PhyCor Common Stock
(the "Interim Shares"). Of the Interim Shares, 293,706 shares are to be resold
by the PLLC in accordance with the terms of the Prospectus and the remaining
141,549 shares were distributed to certain physicians affiliated with the PLLC.
Following the PLLC's resale of the Interim Shares and transfer to certain of its
physicians, the PLLC will hold no shares of the Company's Common Stock.
Pursuant to the Management Agreement, PhyCor-Mesa provided medical practice
management services to the Clinic for the period between July 1, 1995 and
September 1, 1995, the date on which PhyCor-Mesa and the PLLC entered into a
Service Agreement (the "Service Agreement"). As compensation for such services
provided pursuant to the Management Agreement, PhyCor-Mesa received a service
fee. Pursuant to the Service Agreement, PhyCor-Mesa provides the PLLC with the
equipment and facilities used in the medical practice of the PLLC, manages
Clinic operations and employs the PLLC's non-medical professional personnel in
exchange for a service fee. The Service Agreement is for a term of 40 years and
may only be terminated in limited circumstances.
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Plan of Distribution
This Second Amended Supplement relates to the reoffering of the Purchase
Shares by the Clinic and the Interim Shares by the PLLC. The Clinic and the PLLC
have designated Equitable Securities Corporation ("Equitable"), a registered
broker-dealer, as agent for the resale of the Purchase Shares and the Interim
Shares, respectively. The Purchase Shares and the Interim Shares will be sold in
private or block transactions in the over-the-counter market (including the
Nasdaq Stock Market (National Market)) 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 such shares on behalf of the Clinic and the
PLLC. The Clinic, the PLLC and/or Equitable may effect such transactions by
selling such 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, the PLLC, 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, the PLLC and/or Equitable and any
broker-dealers that act in connection with the sale of the shares being sold
hereby 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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