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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 23, 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 October 29,
1997. This Amendment to Supplement relates to the proposed resale by Burns
Clinic Medical Center, P.C., a Michigan professional corporation (the "Clinic"),
of 79,485 shares of the Company's Common Stock issued to the Clinic upon the
partial conversion of certain 7.0% Subordinated Convertible Notes with an
aggregate principal amount of $7,962,263 (collectively, the "Purchase Notes").
The Company issued the Purchase Notes to the Clinic in connection with the
acquisition by PhyCor of Northern Michigan, Inc., a Tennessee corporation and
wholly-owned subsidiary of the Company ("PhyCor-Michigan"), of certain assets of
the Clinic pursuant to an Asset Purchase Agreement between PhyCor and the Clinic
dated as of October 1, 1994 (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
on June 14, 1996 in the form of a 50% stock dividend and all prior stock
dividends.
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.
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The date of this Amendment to Supplement is December 23, 1997.
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Selling Shareholder
The Clinic operates a multi-specialty medical clinic in Petoskey,
Michigan and maintains seven satellite locations in the area. The Clinic's
principal office is located at 560 West Mitchell, Petoskey, Michigan 49770.
The Company, through PhyCor-Michigan, 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. From December 12, 1995 to
March 7, 1997, the Clinic partially converted certain of the Purchase Notes in
accordance with their terms into an aggregate of 542,164 shares of PhyCor Common
Stock. The Clinic resold such shares pursuant to the Prospectus and various
Prospectus Supplements. On October 20, 1997, the Clinic partially converted
certain of the Purchase Notes, in accordance with their terms, into an aggregate
of 79,485 shares of PhyCor Common Stock (the "Shares"). The Clinic intends to
resell the Shares in the over-the-counter market and through the writing of
options on the Shares in accordance with the terms of the Prospectus and this
Amendment to Supplement.
In connection with the acquisition of the assets of the Clinic,
PhyCor-Michigan entered into a Service Agreement, effective as of October 1,
1994 (the "Service Agreement") with the Clinic. Pursuant to the Service
Agreement, PhyCor-Michigan 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 is 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 BT Alex. Brown Incorporated ("BT Alex.
Brown"), 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 or through the writing of options. BT Alex. Brown has agreed to use its
best efforts to sell and write options on the Shares on behalf of the Clinic.
The Clinic and/or BT Alex. Brown 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, BT Alex. Brown 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 BT Alex. Brown 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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