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REGISTRATION NO. 33-98528
RULE 424(B)(5)
SUPPLEMENT TO PROSPECTUS,
DATED AUGUST 28, 1996
PHYCOR, INC.
3,000,000 SHARES
COMMON STOCK
__________________
The Prospectus, dated August 28, 1996 (the "Prospectus"), to
which this Supplement, dated January 2, 1997, 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, in
connection with the acquisition of the assets of single and multi-specialty
medical clinics, the assets of individual physician practices and 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.
This Supplement relates to the proposed resale by Boulder
Medical Center, P.C., a Colorado professional corporation (the "Clinic"), of
57,430 shares of the Company's Common Stock issued to the Clinic upon the
partial conversion of a 7.0% Subordinated Convertible Note (the "Purchase
Note"). The Company issued the Purchase Note to the Clinic in connection with
the acquisition by PhyCor of Boulder, Inc., a Tennessee corporation and
wholly-owned subsidiary of the Company ("PhyCor-Boulder"), of certain assets of
the Clinic pursuant to an Asset Purchase Agreement between PhyCor and the
Clinic effective as of October 1, 1994 (the "Purchase Agreement").
Terms defined in the Prospectus have the same meaning in this
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 on June
14, 1996 in the form of a 50% stock dividend, as well as all prior stock
dividends.
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 January 2, 1997.
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Selling Shareholder
The Clinic operates a multi-specialty medical clinic in
Boulder, Colorado and maintains two satellite locations in the area. The
Clinic's principal office is located at 2750 Broadway, Boulder, Colorado 80304.
The Company, through PhyCor-Boulder, acquired substantially
all of the assets of the Clinic pursuant to the Purchase Agreement and in
connection therewith, the Company issued the Purchase Note to the Clinic. From
January 4, 1996 to October 1, 1996, the Clinic partially converted the Purchase
Note, in accordance with its terms, into an aggregate of 239,377 shares. The
Clinic resold an aggregate of 168,614 of such shares pursuant to the Prospectus
and various Prospectus Supplements. The remaining shares were distributed on a
pro rata basis to certain of the Clinic's existing shareholders. On January 2,
1997, the Clinic partially converted the Purchase Note, in accordance with its
terms, into an aggregate of 63,624 shares of Common Stock. The Clinic intends
to resell 57,430 of such shares (the "Resale Shares") pursuant to the terms of
the Prospectus and this Prospectus Supplement. The remaining 6,194 shares will
be distributed on a pro rata basis to certain of the Clinic's existing
shareholders.
In connection with the acquisition of the assets of the
Clinic, PhyCor-Boulder entered into a Service Agreement, effective as of
October 1, 1994 (the "Service Agreement") with the Clinic. Pursuant to the
Service Agreement, PhyCor-Boulder provides the Clinic with the equipment and
facilities used in the medical practice of the Clinic, manages Clinic
operations and employs certain of the Clinic's non-medical professional
personnel in exchange for a service fee. The Service Agreement is in effect for
a term of 40 years and may only be terminated in limited circumstances.
Plan of Distribution
This Supplement relates to the resale of the Resale Shares by
the Clinic. The Clinic has designated Equitable Securities Corporation
("Equitable"), a registered broker-dealer, as agent for the resale of the
Resale Shares. The Resale Shares will be sold 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 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 Resale Shares on behalf of the Clinic. The Clinic and/or Equitable 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 Clinic, Equitable and/or 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 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 Resale Shares may be deemed to be an "underwriter" within the meaning of
Section 2(11) of the Securities Act of 1933, as amended, and any commissions
received by (or discounts allowed to) them and any profit on the resale of the
Resale Shares as principal may be deemed to be underwriting discounts and
commissions.
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