<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 3)
Under the Securities Exchange Act of 1934
PhyCor, Inc.
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(Name of Issuer)
Common Stock, no par value
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(Title of Class of Securities)
71940F10
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(CUSIP Number of Class of Securities)
Patrick T. Hackett
E.M. Warburg, Pincus & Co., LLC
466 Lexington Avenue
New York, New York 10017
(212) 878-0600
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copies to:
Steven J. Gartner, Esq.
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019-6099
(212) 728-8000
March 8, 1999
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(Date of Event which Requires
Filing of this Schedule)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following: [ ]
<PAGE>
SCHEDULE 13D
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CUSIP No. 71940F10 Page 2 of 10 Pages
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- ----------- --------------------------------------------------------------------
1 NAME OF REPORT PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Warburg, Pincus Equity Partners, L.P. I.D. #13-3986317
- ----------- --------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------- --------- ------------------------------------------------
7 SOLE VOTING POWER
7,387,000
--------- ------------------------------------------------
NUMBER OF SHARES 8 SHARED VOTING POWER
BENEFICIALLY OWNED
BY EACH REPORTING 0
PERSON WITH
--------- ------------------------------------------------
9 SOLE DISPOSITIVE POWER
7,387,000
--------- ------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- ----------- --------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
7,387,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ----------- --------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.7%
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14 TYPE OF REPORTING PERSON*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
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CUSIP No. 71940F10 Page 3 of 10 Pages
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1 NAME OF REPORT PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Warburg, Pincus & Co. I.D. #13-6358475
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
N/A
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- ----------- --------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- --------------------- --------- ------------------------------------------------
7 SOLE VOTING POWER
7,488,387
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NUMBER OF SHARES 8 SHARED VOTING POWER
BENEFICIALLY OWNED
BY EACH REPORTING 0
PERSON WITH
--------- ------------------------------------------------
9 SOLE DISPOSITIVE POWER
7,488,387
--------- ------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- ----------- --------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
7,488,387
- ----------- --------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ----------- --------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.8%
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14 TYPE OF REPORTING PERSON*
PN
- ----------- --------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
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CUSIP No. 71940F10 Page 4 of 10 Pages
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1 NAME OF REPORT PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
E.M. Warburg, Pincus & Co., LLC I.D. #13-3536050
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- ---------- ---------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- ---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
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7 SOLE VOTING POWER
7,387,000
--------- ------------------------------------------------
NUMBER OF SHARES 8 SHARED VOTING POWER
BENEFICIALLY OWNED
BY EACH REPORTING 0
PERSON WITH
--------- ------------------------------------------------
9 SOLE DISPOSITIVE POWER
7,387,000
--------- ------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- ---------- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
7,387,000
- ---------- ---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.7%
- ---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- ---------- ---------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
This Amendment No. 3 amends the Schedule 13D filed on December 28, 1998
(the "Initial Filing"), as amended by Amendment No. 1 to the Schedule 13D filed
on January 4, 1999 and Amendment No. 2 to the Schedule 13D filed on January 13,
1999 (collectively with the Initial Filing, the "Schedule 13D"), on behalf of
Warburg, Pincus Equity Partners, L.P., a Delaware limited partnership ("WPEP"),
Warburg, Pincus & Co., a New York general partnership ("WP"), and E.M. Warburg,
Pincus & Co., LLC, a New York limited liability company ("EMW").
Unless otherwise indicated herein, each capitalized term used but not
defined herein shall have the meaning assigned to such term in the Initial
Filing.
Item 3
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Item 3 of the Schedule 13D is hereby amended and restated in its entirety
to read as follows:
The total amount of funds required by WPEP to purchase the Common Stock was
$42,809,067, and was furnished from the working capital of WPEP.
Item 4
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Item 4 of the Schedule 13D is hereby amended by adding the following:
Page 5 of 10 Pages
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On March 8, 1999, WPEP entered into an agreement with the Company (the
"Standstill Agreement") pursuant to which the Company confirmed that its Board
of Directors (the "Board") had taken all actions necessary to approve (as
contemplated by Tenn. Code. Ann. Section 48-103-205, as in effect on March 8,
1999), subject to the terms of the Standstill Agreement, the acquisition by WPEP
or certain related partnerships (collectively, "Warburg") of up to 14.99% of the
outstanding shares of Common Stock, including any shares of Common Stock
beneficially owned by Warburg as of March 8, 1999.
Under the Standstill Agreement, Warburg and WP, the sole general partner of
Warburg, agree that, for a period of two years from March 8, 1999, neither
Warburg nor any entity as to which Warburg is the beneficial owner of 50% or
more of the voting securities or as to which Warburg has the right to appoint
the majority of the directors or persons exercising similar authority, will,
directly or indirectly, and WP will not, for its own account, without the prior
written consent of the Board: (a) acquire any voting securities or direct or
indirect rights to acquire any voting securities of the Company in excess of
14.99% of number of shares of Common Stock then outstanding; (b) make, or in any
way participate, directly or indirectly, in any "solicitation" of "proxies" to
vote (as such terms are used in the rules under the Exchange Act), or seek to
advise or influence any person or entity with respect to the voting of any
voting
Page 6 of 10 Pages
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securities of the Company; (c) make any public announcement with respect to any
transaction or proposed or contemplated transaction between the Company or any
of its security holders and Warburg, including, without limitation, any tender
or exchange offer, merger or other business combination or acquisition of a
material portion of the assets of the Company; or (d) disclose any intention,
plan or arrangement regarding any of the matters referred to in clauses (a), (b)
or (c). The foregoing summary of the Standstill Agreement is qualified in its
entirety by reference to the Standstill Agreement, a copy of which is set forth
as Exhibit 2 and is incorporated herein by reference.
Item 5
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Paragraph (a) of Item 5 of the Schedule 13D is hereby amended and restated
in its entirety to read as follows:
As of March 8, 1999, WPEP and EMW beneficially owned 7,387,000 shares of
Common Stock. As of March 8, 1999, WP beneficially owned 7,488,387 shares of
Common Stock. Of the shares beneficially owned by WP, 101,387 are shares held by
advisory accounts managed by Warburg Pincus Asset Management, Inc. ("WPAM") on a
discretionary basis. WPAM is controlled by WP. These shares were received as
distributions to certain investment advisory accounts from unaffiliated entities
in which such accounts were invested. By reason of their respective
relationships with WPEP, each of the Reporting Entities may be deemed under Rule
13d-3 under the Exchange Act to own beneficially all of the shares of Common
Stock
Page 7 of 10 Pages
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which WPEP beneficially owns. As of March 8, 1999, 7,387,000 shares of Common
Stock represented approximately 9.7% of the outstanding shares of Common Stock,
based on the 76,154,048 shares of Common Stock outstanding as of November 13,
1998, as reported by the Company in their Quarterly Report on Form 10-Q for the
quarter ended September 30, 1998. As of March 8, 1999, the 7,488,387 of Common
Stock beneficially owned by WP represented approximately 9.8% of the outstanding
shares of Common Stock.
Paragraph (b) of Item 5 of the Schedule 13D is hereby amended and restated
in its entirety to read as follows:
Each of the Reporting Entities has sole power to dispose or to direct the
disposition with respect to the 7,387,000 shares and all shares acquired by
WPEP. As controlling shareholder of WPAM, WP has the power to dispose or to
direct the disposition with respect to the 101,387 shares of Common Stock held
by WPAM.
Item 6
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Item 6 of the Schedule 13D is hereby amended by adding the following:
The information set forth in the last two paragraphs of Item 4 is
incorporated herein by reference.
Item 7
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Item 7 of the Schedule 13D is hereby amended to add the following:
Page 8 of 10 Pages
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2. Standstill Agreement, dated March 8, 1999, between WPEP and the Company.
Schedule I hereto sets forth a list of open market purchases of Common Stock
made by the Reporting Entities not previously reported.
9 of 10 Pages
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SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
Dated: March 8, 1999 WARBURG, PINCUS EQUITY
PARTNERS, L.P.
By: Warburg, Pincus & Co.,
General Partner
By: /s/ Reuben S. Leibowitz
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Reuben S. Leibowitz
Partner
Dated: March 8, 1999 WARBURG, PINCUS & CO.
By: /s/ Reuben S. Leibowitz
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Reuben S. Leibowitz
Partner
Dated: March 8, 1999 E.M. WARBURG, PINCUS & CO., LLC
By: /s/ Reuben S. Leibowitz
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Reuben S. Leibowitz
Member
10 of 10 Pages
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<TABLE>
Schedule I
Recent Purchases of the Common Stock
of PhyCor, Inc.
<CAPTION>
Name of Number of Price Per Date
Purchaser Shares Purchased Share of Trade
- --------- ---------------- ----- --------
<S> <C> <C> <C>
WPEP 25,000 $7.5000 1/13/99
WPEP 150,000 $7.0625 1/29/99
</TABLE>
S-1
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EXHIBIT INDEX
Exhibit Title
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Exhibit 99 Standstill Agreement
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(Letterhead of Warburg, Pincus Equity Partners, L.P.)
March 8, 1999
PhyCor, Inc.
30 Burton Hills Boulevard, 4th Floor
Nashville, TN 37215
Gentlemen:
We have requested that the Board of Directors of PhyCor, Inc. (the "Company")
consent to the acquisition of additional equity securities of the Company by
Warburg, Pincus Equity Partners, L.P. or certain related partnerships
(collectively, "Warburg"), and that such acquisitions be approved under the
Tennessee Business Combination Act (the "Combination Act"). The purpose of this
letter is to set forth our agreement with respect to these matters.
1. The Company hereby confirms that its Board of Directors (the "Board")
has taken all actions necessary to approve (as contemplated by Tenn. Code Ann.
Section 48-103-205, as in effect on date hereof), subject to the terms of this
letter, the acquisition of up to 14.99% of the outstanding shares of Common
Stock of the Company ("Common Stock"), including any shares of Common Stock
beneficially owned by Warburg as of the date hereof ("Permitted Acquisitions").
2. In consideration of the actions taken by the Board to render the
Combination Act inapplicable to Permitted Acquisitions, Warburg and Warburg,
Pincus & Co., the sole general partner of Warburg ("WP"), hereby agree that, for
a period of two years from the date of this Agreement, neither Warburg nor any
Controlled Subsidiary (as defined below) will, directly or indirectly, and WP
will not, for its own account, without the prior written consent of the Board:
(a) acquire any voting securities or direct or indirect rights to acquire
any voting securities of the Company in excess of 14.99% of number of
shares of Common Stock then outstanding;
<PAGE>
(b) make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" to vote (as such terms are used in the
rules under the Securities Exchange Act of 1934), or seek to advise or
influence any person or entity with respect to the voting of any
voting securities of the Company;
(c) make any public announcement with respect to any transaction or
proposed or contemplated transaction between the Company or any of its
security holders and Warburg, including, without limitation, any
tender or exchange offer, merger or other business combination or
acquisition of a material portion of the assets of the Company; or
(d) disclose any intention, plan or arrangement regarding any of the
matters referred to in clauses (a), (b) or (c).
For purposes hereof, "Controlled Subsidiary" means any entity as to which
Warburg is the beneficial owner of 50% or more of the voting securities or as to
which Warburg has the right to appoint a majority of the directors or persons
exercising similar authority.
Warburg and WP acknowledge that money damages would not be sufficient remedy for
any breach of this Agreement by it and that in addition to all other remedies
the Company shall be entitled to specific performance and injunctive and other
equitable relief as a remedy for any such breach, and Warburg and WP further
agree to waive any requirement for the securing or posting of any bond in
connection with such remedy.
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York, without giving effect to its principles or rules
regarding conflicts of laws.
All modifications of, waivers of and amendments to this Agreement must be in
writing and signed on behalf of Warburg, WP and the Company.
-2-
<PAGE>
Please confirm your agreement with the foregoing by signing where indicated
below and returning to the undersigned a copy of this Agreement.
Very truly yours,
WARBURG, PINCUS EQUITY PARTNERS, L.P.
By: Warburg, Pincus & Co.,
General Partner
By: /s/ Joel Ackerman
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WARBURG, PINCUS & CO.
By: /s/ Joel Ackerman
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Accepted and Agreed as of
the date first written above:
PHYCOR, INC.
By: /s/ John K. Crawford
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