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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
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The Prospectus, dated August 28, 1996 (the "Prospectus"), to which this
Supplement, dated July 7, 1997, is attached (the "Supplement"), relates to the
resale by the holders thereof of up to an aggregate of 3,000,000 shares of
Common Stock, no par value per share (the "Common Stock"), of PhyCor, Inc. (the
"Company"), 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 (the "Act") in connection with the acquisition of the assets of
(i) single and multi-specialty medical clinics, (ii) the assets of individual
physician practices and (iii) 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.
On July 2, 1997, the Company issued an aggregate of 90,909 shares of Common
Stock to Carriere & Associates, P.A., a Florida professional association (the
"Clinic"), upon the conversion of a 7.0% Subordinated Convertible Note in the
principal amount of $1,400,000 (the "Purchase Note"). The Company issued the
Purchase Note to the Clinic in connection with the acquisition by PhyCor of
Jacksonville, Inc., a Tennessee corporation and wholly-owned subsidiary of the
Company ("PhyCor-Jacksonville"), of certain assets of the Clinic pursuant to an
Asset Purchase Agreement, dated as of June 1, 1995, among the Company,
PhyCor-Jacksonville, the Clinic and the sole shareholder of the Clinic (the
"Purchase Agreement").
Capitalized terms used in this Supplement shall have the meanings given to
them in the Prospectus, unless the context requires otherwise.
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 July 7, 1997.
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Selling Shareholder
PhyCor-Jacksonville acquired substantially all of the assets of the Clinic
pursuant to the Purchase Agreement. In connection therewith, the Company issued
the Purchase Note to the Clinic in a transaction exempt from the registration
requirements of the Act. On July 2, 1997, the Clinic converted the Purchase Note
in accordance with its terms, into an aggregate of 90,909 shares of Common Stock
(the "Shares"). The Clinic intends to resell the Shares in the over-the-counter
market in accordance with the terms of the Prospectus.
In connection with the acquisition of the assets of the Clinic, First Coast
Medical Group, P.A., a Florida professional association ("First Coast"), entered
into an Employment Agreement, effective as of June 1, 1995 (the "Employment
Agreement"), with the physician associated with the Clinic. First Coast operates
a multi-specialty medical clinic in Jacksonville, Florida and maintains 53
satellite locations in the area. First Coast's principal office is located at
111 Riverside Avenue, Suite 120, Jacksonville, Florida 32204. PhyCor-
Jacksonville provides First Coast with the equipment and facilities used in its
medical practice, manages First Coast's operations and employs First Coast's
non-medical personnel in exchange for a service fee.
Plan of Distribution
This Supplement relates to the reoffering of the Shares by the Clinic. The
Clinic has designated Robert W. Baird & Co., Inc. ("Robert W. Baird"), 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
market prices prevailing at the time of the sale, at prices related to such
prevailing market price, or at negotiated prices. Robert W. Baird has agreed to
use its best efforts to sell the Shares on behalf of the Clinic. The Clinic
and/or Robert W. Baird 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, Robert W.
Baird 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 Robert W. Baird 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.
