<PAGE>
                                                                     EXHIBIT 2.1

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK

-------------------------------x
                  In re         :
                                :
PHYCOR, INC., et al.,           :        Chapter 11
                                :        Case Nos.
                                :        (Jointly Administered)
                  Debtors.      :
                                :
                                :
-------------------------------x

                        AMENDED JOINT REORGANIZATION PLAN
                     OF PHYCOR, INC. AND DEBTOR SUBSIDIARIES

                                         SKADDEN, ARPS, SLATE, MEAGHER
                                           & FLOM LLP
                                         Kayalyn A. Marafioti
                                         Thomas J. Matz
                                         Mark M. Brown
                                         Four Times Square
                                         New York, New York  10036-6522
                                         (212) 735-3000

Dated:  New York, New York
        February 14, 2002

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                                TABLE OF CONTENTS
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                                  INTRODUCTION

                                   ARTICLE I

                     DEFINITIONS, RULES OF INTERPRETATION,
                            AND COMPUTATION OF TIME

A. Scope Of Definitions; Rules Of Construction.................................    1
B. Definitions.................................................................    1
C. Rules Of Interpretation.....................................................   10
D. Computation Of Time.........................................................   11

                                   ARTICLE II

                     CLASSIFICATION OF CLAIMS AND INTERESTS

A. Introduction................................................................   11
B. Unclassified Claims (not entitled to vote on the Plan)......................   11
   1.       Administrative Claims..............................................   11
   2.       Priority Tax Claims................................................   11
C. Unimpaired Classes Of Claims (deemed to have accepted the Plan and,
   therefore, not entitled to vote)............................................   11
   1.       Class 1:  Other Priority Claims....................................   11
   2.       Class 2a:  AmSouth Secured Claim...................................   11
   3.       Class 2b:  Other Secured Claims....................................   11
D. Impaired Classes Of Claims Or Interests.....................................   12
   1.       Class 3:  Convenience Claims.......................................   12
   2.       Class 4:  General Unsecured Claims.................................   12
   3.       Class 5:  Preferred Stock Interests................................   12
   4.       Class 6:  Common Stock Interests...................................   12
   5.       Class 7:  Shareholder Litigation Claims............................   12
   6.       Class 8:  Warrants Interests.......................................   12

                                   ARTICLE III

                        TREATMENT OF CLAIMS AND INTERESTS

A. Unclassified Claims.........................................................   12
   1.       Administrative Claims..............................................   12
   2.       Priority Tax Claims................................................   13
B. Unimpaired Classes Of Claims ...............................................   13
   1.       Class 1:  Other Priority Claims....................................   13
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   2.       Class 2a:  AmSouth Secured Claim...................................   13
   3.       Class 2b:  Other Secured Claims....................................   14
C. Impaired Classes Of Claims .................................................   14
   1.       Class 3:  Convenience Claims.......................................   14
   2.       Class 4:  General Unsecured Claims.................................   14
   3.       Class 5:  Preferred Stock Interests................................   15
   4.       Class 6:  Common Stock Interests...................................   15
   5.       Class 7:  Shareholder Litigation Claims............................   15
   6.       Class 8:  Warrants Interests.......................................   15

                                   ARTICLE IV

                      MEANS FOR IMPLEMENTATION OF THE PLAN

A. Substantive Consolidation...................................................   15
   1.       Consolidation Of The Chapter 11 Cases..............................   15
   2.       Substantive Consolidation Order....................................   16
B. Continued Corporate Existence...............................................   16
C. Amended And Restated Charter And By-laws....................................   16
D. Corporate Action............................................................   16
   1.       Cancellation Of Existing Securities And Agreements.................   16
E. Restructuring Transactions..................................................   17
   1.       New Securities.....................................................   17
F. Directors And Officers......................................................   17
G. Effectuating Documents; Further Transactions................................   18
H. Vesting Of Assets...........................................................   18
I. Preservation Of Rights Of Action; Settlement Of Litigation Claims...........   18
   1.       Preservation Of Rights Of Action...................................   18
   2.       Settlement Of Litigation Claims....................................   18
J. Creditors' Committee........................................................   18
K. Sources Of Cash For Plan Distributions......................................   19
L. Release Of Liens............................................................   19
M. Exemption From Certain Transfer Taxes.......................................   19

                                    ARTICLE V

                       ACCEPTANCE OR REJECTION OF THE PLAN

A. Classes Entitled To Vote....................................................   19
B. Acceptance By Impaired Classes..............................................   20
C. Cramdown....................................................................   20
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                                       ii
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                                   ARTICLE VI

                             SECURITIES TO BE ISSUED
                           IN CONNECTION WITH THE PLAN

A. Description Of Securities To Be Issued In Connection With the Plan..........   20

                                   ARTICLE VII

                       PROVISIONS GOVERNING DISTRIBUTIONS

A. Distributions For Claims Allowed As Of The Consummation Date................   20
B. Interest On Claims..........................................................   21
C. Distributions By Disbursing Agent...........................................   21
D. Delivery Of Distributions And Undeliverable Or Unclaimed Distributions......   21
   1.       Delivery Of Distributions In General...............................   21
   2.       Undeliverable And Unclaimed Distributions..........................   21
E. Record Date For Distributions...............................................   22
F. Means Of Cash Payment.......................................................   22
G. Withholding And Reporting Requirements......................................   22
H. Setoff......................................................................   23
I. Surrender Of Cancelled Debt Instruments Or Securities.......................   23
J. Fractional Dollars; De Minimis Distributions................................   23
K. Services Of Indenture Trustee, Agents, And Servicers........................   23
L. Instructions To Disbursing Agent............................................   24
M. Calculation Of Distribution Amounts Of New Securities.......................   24

                                  ARTICLE VIII

                        TREATMENT OF EXECUTORY CONTRACTS
                              AND UNEXPIRED LEASES

A. Rejected Contracts And Leases...............................................   24
B. Bar To Rejection Damages....................................................   25
C. Assumed Contracts And Leases................................................   25
D. Payments Related To Assumption Of Contracts And Leases......................   25
E. Certain Employment Contracts................................................   25
F. Compensation And Benefit Plans And Treatment Of Retirement Plan.............   26

                                   ARTICLE IX

                       PROCEDURES FOR RESOLVING DISPUTED,
                       CONTINGENT, AND UNLIQUIDATED CLAIMS

A. Objection Deadline; Prosecution Of Objections...............................   26
B. No Distributions Pending Allowance..........................................   27
C. Disputed Claims Reserve.....................................................   27
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D. Distributions After Allowance...............................................   27

                                    ARTICLE X

                      CONDITIONS PRECEDENT TO CONFIRMATION
                          AND CONSUMMATION OF THE PLAN

A. Conditions To Confirmation..................................................   28
B. Conditions To Consummation Date.............................................   28
C. Waiver Of Conditions........................................................   30

                                   ARTICLE XI

                          MODIFICATIONS AND AMENDMENTS

A. Authorization For Debtors To Modify And Amend The Plan......................   30

                                   ARTICLE XII

                            RETENTION OF JURISDICTION

A. Retention Of Exclusive Jurisdiction By The Bankruptcy Court.................   31

                                  ARTICLE XIII

                             EFFECTS OF CONFIRMATION

A. Binding Effect..............................................................   32
B. Discharge Of The Debtors....................................................   32
C. Injunction..................................................................   33
D. Debtor Releases ............................................................   33
E. Other Releases..............................................................   33

                                   ARTICLE XIV

                           COMPROMISES AND SETTLEMENTS

A. Authorization For Debtors To Compromise And Settle Claims...................   34
B. Class Action Settlement.....................................................   34

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                                       iv
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                                   ARTICLE XV

                            MISCELLANEOUS PROVISIONS

A. Bar Dates For Certain Claims................................................   35
   1.       Administrative Claims..............................................   35
   2.       Professional Fee Claims; Substantial Contribution Claims...........   35
   3.       Other Claims.......................................................   35
B. Payment Of Statutory Fees...................................................   35
C. Revocation, Withdrawal, Or Non-Consummation.................................   36
D. Severability Of Plan Provisions.............................................   36
E. Successors And Assigns......................................................   36
F. Plan Supplement.............................................................   36
G. Notices.....................................................................   37
H. Indemnification Obligations.................................................   38
I. Term Of Injunctions Or Stays................................................   38
J. Governing Law...............................................................   38
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                                        v
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                                TABLE OF EXHIBITS

Exhibit A     New Common Stock Terms

Exhibit B     Management Incentive Plan

Exhibit C     Schedule Of Executory Contracts And Unexpired Leases To Be Assumed

Exhibit D     Schedule Of Causes Of Action To Be Retained By Reorganized PhyCor

Exhibit E     Plan And Agreement Of Merger


                                       vi
<PAGE>

                                  INTRODUCTION

      PhyCor, Inc. ("PhyCor" or the "Company") and certain of its Debtor
Subsidiaries, debtors and debtors-in-possession (collectively, the "Debtors"),
hereby propose the following amended joint plan of reorganization (the "Plan").
Reference is made to the Disclosure Statement (as that term is defined herein),
distributed contemporaneously herewith, for a discussion of the Debtors'
history, businesses, properties, and operations, a summary and analysis of the
Plan, and certain related matters including, among others, the proposed
substantive consolidation of the Debtors' cases. The Debtors are proponents of
this Plan within the meaning of section 1129 of the Bankruptcy Code (as that
term is defined herein). Subject to certain restrictions and requirements set
forth in section 1127 of the Bankruptcy Code and Fed. R. Bankr. P. 3019, the
Debtors reserve the right to alter, amend, modify, revoke, or withdraw this Plan
prior to its substantial consummation.

                                    ARTICLE I

                      DEFINITIONS, RULES OF INTERPRETATION,
                             AND COMPUTATION OF TIME

A.    SCOPE OF DEFINITIONS; RULES OF CONSTRUCTION

      For purposes of this Plan, except as expressly provided or unless the
context otherwise requires, all capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in Article I of this Plan. Any term
used in this Plan that is not defined herein, but is defined in the Bankruptcy
Code or the Bankruptcy Rules, shall have the meaning ascribed to that term in
the Bankruptcy Code or the Bankruptcy Rules. Whenever the context requires, such
terms shall include the plural as well as the singular number, the masculine
gender shall include the feminine, and the feminine gender shall include the
masculine.1

B.    DEFINITIONS

      1.1 "Administrative Claim" means a Claim for payment of an administrative
expense of a kind specified in section 503(b), 507(a), or 1114(e)(2) of the
Bankruptcy Code and entitled to priority pursuant to section 507(a)(1) of the
Bankruptcy Code, including, but not limited to, (a) the actual, necessary costs
and expenses, incurred after the Petition Date, of preserving the Estates and
operating the businesses of the Debtors, including wages, salaries, or
commissions for services rendered after the commencement of the Chapter 11
Cases, (b) Professional Fee Claims, (c) all fees and charges assessed against
the Estates under chapter 123 of title 28, United States Code, and (d) all
Allowed Claims that are entitled to be treated as Administrative Claims pursuant
to a Final Order of the Bankruptcy Court under section 546(c)(2)(A) of the
Bankruptcy Code.

      1.2 "Allowed" means, when used in reference to a Claim within a particular
Class, an Allowed Claim of the type described in such Class.

      1.3 "Allowed Claim" means a Claim or any portion thereof (a) that has been
allowed by a Final Order, (b) that either (x) has been Scheduled as a
liquidated, non-contingent, undisputed Claim in an amount greater than zero in
any of the Debtors' Schedules, as the same may from time to time be amended in
accordance with the Bankruptcy Code, Bankruptcy Rules, or orders of the
Bankruptcy Court or (y) is the subject of a timely filed proof


                                       1
<PAGE>

of claim as to which either (i) no objection to its allowance has been filed
(either by way of objection or amendment to the Schedules) within the periods of
limitation fixed by the Bankruptcy Code or by any order of the Bankruptcy Court
or (ii) any objection to its allowance has been settled, waived through payment,
or withdrawn, or has been denied by a Final Order, or (c) that is expressly
allowed in a liquidated amount in the Plan; provided, however, that with respect
to an Administrative Claim, "Allowed Claim" means an Administrative Claim as to
which a timely request for payment has been made in accordance with Article IX.A
of this Plan (if such written request is required) or other Administrative
Claim, in each case as to which the Debtors (y) have not interposed a timely
objection or (z) have interposed a timely objection and such objection has been
settled, waived through payment, or withdrawn, or has been denied by a Final
Order.

      1.4 "Allowed Class . . . Claim" means an Allowed Claim in the particular
Class described.

      1.5 "Amended and Restated Charter and By-laws" means Reorganized PhyCor's
amended and restated charter and by-laws in effect under the laws of the State
of Tennessee, as amended pursuant to the Plan.

      1.6 "AmSouth Secured Claim" means the secured claim of AmSouth Bank based
on the terms of the Credit and Security Agreement between PhyCor, certain of its
debtor subsidiaries, and AmSouth Bank, dated as of October 9, 2001.

      1.7 "Ballots" means each of the ballot forms distributed with the
Disclosure Statement to holders of Impaired Claims entitled to vote under
Article II hereof in connection with the solicitation of acceptances of the
Plan.

      1.8 "Bankruptcy Code" means title 11 of the United States Code, 11 U.S.C.
Sections 101-1330, as in effect on the date hereof and as it may thereafter be
amended.

      1.9 "Bankruptcy Court" means the United States Bankruptcy Court for the
Southern District of New York or such other court as may have jurisdiction over
the Chapter 11 Cases.

      1.10 "Bankruptcy Rules" means, collectively, the Federal Rules of
Bankruptcy Procedure and the Official Bankruptcy Forms, as amended, the Federal
Rules of Civil Procedure, as amended, as applicable to the Chapter 11 Cases or
proceedings therein, and the Local Rules of the Bankruptcy Court, as applicable
to the Chapter 11 Cases or proceedings therein, as the case may be.

      1.11 "Bar Date" means the date(s), if any, designated by the Bankruptcy
Court as the last date for filing proofs of Claim (including Administrative
Claims other than Professional Fee Claims) against or Interests in the Debtors.

      1.12 "Benefit Plans" means all benefit plans, policies, and programs
sponsored by the Debtors, including, without limitation, all such benefits
plans, policies, and programs pertaining to wages, overtime pay, fees, salaries,
board of directors' fees and expenses, relocation assistance pay, holiday and
vacation pay, sick leave pay, other excused leave pay, workers' compensation
claims, reimbursable business expenses, the Debtors' group health care, COBRA,
the Debtors' employee life insurance, short-term and long-term employee
disability, 401(k) savings and retirement, severance, flexible spending
accounts, payments pursuant to garnishment orders, and miscellaneous other
benefits.


                                       2
<PAGE>

      1.13 "Business Day" means any day, excluding Saturdays, Sundays or "legal
holidays" (as defined in Fed. R. Bankr. P. 9006(a)), on which commercial banks
are open for business in New York, New York.

      1.14 "Case Interest Rate" means the federal judgment rate provided in 28
U.S.C. Section 1961 in effect on the Petition Date, compounded annually on each
anniversary of the Petition Date.

      1.15 "Cash" means lawful currency of the United States or equivalents
thereof.

      1.16 "Chapter 11 Case(s)" means, individually, the Chapter 11 case of any
of PhyCor or the Debtor Subsidiaries, and, collectively, the Chapter 11 cases of
PhyCor and the Debtor Subsidiaries.

      1.17 "Claim" means a claim against any Debtor, whether or not asserted, as
defined in section 101(5) of the Bankruptcy Code.

      1.18 "Class" means a category of holders of Claims or Interests, as
described in Article II below.

      1.19 "Class Action Settlement" means the settlement of the Shareholder
Litigation Claims as they pertain to the defendants other than KPMG.

      1.20 "Collateral" means any property or interest in property of the
Debtors' Estates subject to a Lien to secure the payment or performance of a
Claim, which Lien is not subject to avoidance under the Bankruptcy Code or
otherwise invalid under the Bankruptcy Code or applicable state law.

      1.21 "Common Stock" means the outstanding common stock of PhyCor,
authorized as of the Petition Date.

      1.22 "Common Stock Interest" means any Interest from or under the Common
Stock.

      1.23 "Confirmation" means entry by the Bankruptcy Court of the
Confirmation Order.

      1.24 "Confirmation Date" means the date of entry by the Bankruptcy Court
of the Confirmation Order.

      1.25 "Confirmation Hearing" means the hearing to consider confirmation of
the Plan under section 1128 of the Bankruptcy Code.

      1.26 "Confirmation Order" means the order entered by the Bankruptcy Court
confirming the Plan.

      1.27 "Consummation Date" means the Business Day on which all conditions to
the consummation of the Plan set forth in Article X.B hereof have been satisfied
or waived as provided in Article X.C hereof and which is the effective date of
the Plan.

      1.28 "Convenience Claim" means a Claim that would otherwise be classified
as a Class 4 General Unsecured Claim that is (a) $50,000 or less or (b) more
than $50,000 if the holder has elected, on a timely cast


                                       3
<PAGE>

Ballot, to reduce its Claim to $50,000 and accept the distribution set out in
Article III.C.1 hereof in full satisfaction, discharge, and release of such
Claim.

      1.29 "Creditor" means any Person who holds a Claim against a Debtor.

      1.30 "Creditors' Committee" means the official committee of unsecured
creditors appointed by the United States Trustee in these Chapter 11 Cases on
February 11, 2002, as it may be constituted from time to time.

      1.31 "Cure" means the distribution within a reasonable period of time
following the Consummation Date of Cash, or such other property as may be agreed
upon by the parties or ordered by the Bankruptcy Court, with respect to the
assumption of an executory contract or unexpired lease, pursuant to section
365(b) of the Bankruptcy Code, in an amount equal to all unpaid monetary
obligations, without interest, or such other amount as may be agreed upon by the
parties, under such executory contract or unexpired lease, to the extent such
obligations are enforceable under the Bankruptcy Code and applicable
non-bankruptcy law.

      1.32 "Debt Securities" means, collectively, the 4.5% Convertible
Subordinated Debentures and the Zero Coupon Notes.

      1.33 "Debt Securities Claim" means a Claim arising from one of the Debt
Securities.

      1.34 "Debtor(s)" means, individually, PhyCor or any of the Debtor
Subsidiaries and, collectively, PhyCor and the Debtor Subsidiaries.

      1.35 "Debtor Subsidiaries" means, collectively, First Physician Care,
Inc.; First Physician Care of Riverbend, Inc.; First Physician Care of South
Florida, Inc.; First Physician Care of Tampa Bay, Inc.; FPCNT, Inc.; IPA
Management Associates L.P. (d/b/a NAMM-Texas a/k/a NAMM-Houston); Manhattan
Physicians IPA No.1, Inc.; NAMM-Texas Investments, L.P.; North American Medical
Management, Inc.; Managed Care Management Associates, Inc.; North American
Medical Management - New York City, Inc.; PhyCor-Texas Gulf Coast, L.P.; PhyCor
Management Corporation; PhyCor Management Corporation- Florida, Inc. (f/k/a
NAMM-Florida, Inc.); PMC of Colorado, Inc.; PhyCor of Northern Michigan Medical
Management, Inc.; PhyCor of Charlotte, LLC; PhyCor of Coachella Valley, Inc.;
PhyCor of Conroe, L.P.; PhyCor of Corsicana, L.P.; PhyCor of Dallas, L.P.;
PhyCor of Denver, Inc.; FHS, Inc. (f/k/a Focus Health Services, P.C.); Front
Range Medical Management, Inc.; PhyCor of Fort Smith, Inc; PhyCor of Irving,
L.P.; PhyCor of Jacksonville, Inc.; PhyCor of Kentucky, LLC.; PhyCor of
Kingsport, Inc.; PhyCor-Lafayette, LLC; PhyCor of Mesa, Inc.; PhyCor of Minot,
Inc; PhyCor of Murfreesboro, Inc.; PhyCor of Northeast Arkansas, Inc.; PhyCor of
Northern California, Inc.; PhyCor of Northern Michigan, Inc.; PhyCor of Olean,
Inc.; PhyCor of Richmond, Inc.; PhyCor of Roanoke, Inc.; PhyCor of San Antonio,
L.P.; PhyCor of Vero Beach, Inc.; PhyCor of West Houston, L.P.; PhyCor of
Wichita Falls, L.P.; St. Petersburg Medical Clinic, Inc.; The Member
Corporation, Inc.; SynerPhy of Rome, Inc. (f/k/a PhyCor of Rome, Inc.); and
HPMdirect, Inc.

      1.36 "Debtor Subsidiary Interests" means, collectively, the issued and
outstanding shares of stock of the Debtor Subsidiaries, all of which are
directly or indirectly owned by PhyCor, as of the Petition Date.

      1.37 "Disallowed Claim" means a Claim, or any portion thereof, other than
a Claim or any portion thereof deemed Allowed under the Plan, that (a) has been
disallowed by a Final Order, (b) is Scheduled at zero


                                       4
<PAGE>

or as contingent, disputed, or unliquidated and as to which a Bar Date has been
established but no proof of claim has been filed or deemed timely filed with the
Bankruptcy Court pursuant to either the Bankruptcy Code or any Final Order of
the Bankruptcy Court or otherwise deemed timely filed under applicable law, (c)
is not Scheduled and as to which a Bar Date has been established but no proof of
claim has been filed or deemed timely filed with the Bankruptcy Court pursuant
to either the Bankruptcy Code or any Final Order of the Bankruptcy Court or
otherwise deemed timely filed under applicable law, or (d) is the subject of an
objection filed by the Debtors with the Bankruptcy Court, which objection has
not been withdrawn or overruled by a Final Order of the Bankruptcy Court.

      1.38 "Disbursing Agent" means Reorganized PhyCor or any party designated
by Reorganized PhyCor, in its sole discretion, to serve as a disbursing agent
under the Plan.

      1.39 "Disclosure Statement" means the written disclosure statement and/or
the summary plan and disclosure statement, as applicable, that relates to the
Plan, as approved by the Bankruptcy Court pursuant to section 1125 of the
Bankruptcy Code and Fed. R. Bankr. P. 3017, as such disclosure statement may be
amended, modified, or supplemented from time to time.

      1.40 "Disputed Claim" means, as applicable, any Claim not otherwise
Allowed or paid pursuant to the Plan or an order of the Bankruptcy Court (i)
which has been or hereafter is listed on the Schedules as unliquidated,
contingent, or disputed, and which has not been resolved by written agreement of
the parties or an order of the Bankruptcy Court, (ii) proof of which was
required to be filed by order of the Bankruptcy Court but as to which a proof of
Claim was not timely or properly filed, (iii) proof of which was timely and
properly filed and which has been or hereafter is listed on the Schedules as
unliquidated, disputed, or contingent, (iv) that is disputed in accordance with
the provisions of this Plan, or (v) as to which any Debtor has interposed a
timely objection or request for estimation in accordance with the Plan, the
Bankruptcy Code, the Bankruptcy Rules, and any orders of the Bankruptcy Court,
or is otherwise disputed by the Debtor in accordance with applicable law, which
objection, request for estimation, or dispute has not been withdrawn or
determined by a Final Order; provided, however, that for purposes of determining
whether a particular Claim is a Disputed Claim prior to the expiration of any
period of limitation fixed for the interposition by the Debtor of objections to
the allowance of Claims, any Claim that is not identified by the Debtor as an
Allowed Claim shall be deemed a Disputed Claim.

      1.41 "Disputed Claims Reserve" means the reserve established and
maintained by Reorganized PhyCor into which Reorganized PhyCor shall deposit the
amount of Cash or New Common Stock that would have been distributed by
Reorganized PhyCor on the Distribution Date to holders of (a) Disputed Claims,
(b) contingent liquidated Claims, if such Claims had been undisputed or
noncontingent Claims on the Distribution Date, pending (i) the allowance of such
Claims, (ii) the estimation of such Claims for purposes of allowance, or (iii)
the realization of the contingencies, and (c) unliquidated Claims, if such
Claims had been liquidated on the Distribution Date, such amount to be estimated
by the Bankruptcy Court or agreed upon by the Debtors and the Creditors'
Committee as sufficient to satisfy such unliquidated Claim upon such Claim's (x)
allowance, (y) estimation for purposes of allowance, or (z) liquidation, pending
the occurrence of such estimation or liquidation.

      1.42 "Distribution Date" means the date, occurring as soon as practicable
after the Consummation Date, upon which distributions from Reorganized PhyCor
are made to holders of Allowed Class 1, 2a, 2b, 3, and 4 Claims, provided,
however, that in no event shall the Distribution Date occur sooner than five
Business Days after the Consummation Date.


                                       5
<PAGE>

      1.43 "Distribution Record Date" means the record date for purposes of
making distributions under the Plan on account of Allowed General Unsecured
Claims, which date shall be the seventh Business Day following entry of the
Confirmation Order.

      1.44 "District Court" means the United States District Court for the
Middle District of Tennessee or such other court as may have jurisdiction over
the Shareholder Litigation Claims.

      1.45 "Estate(s)" means, individually, the estate of PhyCor or any of the
Debtor Subsidiaries, and, collectively, the estates of PhyCor and all of the
Debtor Subsidiaries, created under section 541 of the Bankruptcy Code.

      1.46 "Existing Securities" means, collectively, the 4.5% Convertible
Subordinated Debentures, Zero Coupon Notes, Common Stock, Preferred Stock, and
Warrants.

      1.47 "Face Amount" means (a) when used in reference to a Disputed or
Disallowed Claim, the full stated amount claimed by the holder of such Claim in
any proof of Claim timely filed with the Bankruptcy Court or otherwise deemed
timely filed by any Final Order of the Bankruptcy Court or other applicable
bankruptcy law, (b) when used in reference to an unliquidated Claim, the amount
of the Claim as estimated by the Bankruptcy Court pursuant to section 502(c) of
the Bankruptcy Code, and (c) when used in reference to an Allowed Claim, the
allowed amount of such Claim.

      1.48 "Final Order" means an order or judgment of the Bankruptcy Court, or
other court of competent jurisdiction, as entered on the docket in any Chapter
11 Case, the operation or effect of which has not been stayed, reversed, or
amended and as to which order or judgment (or any revision, modification, or
amendment thereof) the time to appeal or seek review or rehearing has expired
and as to which no appeal or petition for review or rehearing was filed or, if
filed, remains pending.

      1.49 "4.5% Convertible Subordinated Debenture Claim" means a Claim of a
holder of 4.5% Convertible Subordinated Debentures, arising from or under the
4.5% Convertible Subordinated Debentures.

      1.50 "4.5% Convertible Subordinated Debentures" means the 4.5% Convertible
Subordinated Debentures due February 15, 2003 and outstanding under the 4.5%
Convertible Subordinated Debentures Indenture, dated as of February 15, 1996.

      1.51 "General Unsecured Claim" means a Claim that is not an Administrative
Claim, Priority Tax Claim, Other Priority Claim, AmSouth Secured Claim, Other
Secured Claim, Convenience Claim, or Shareholder Litigation Claim.

      1.52 "Information Agent" means the balloting and noticing agent for the
Debtors whose retention was authorized by an order of the Bankruptcy Court dated
February 1, 2002.

      1.53 "Impaired . . ." means, when used with reference to a Claim or
Interest, a Claim or Interest that is impaired within the meaning of section
1124 of the Bankruptcy Code.


                                       6
<PAGE>

      1.54 "Indenture Trustee" means SunTrust Bank, Nashville, N.A., successor
to First American Trust Company, in its capacity as indenture trustee under the
4.5% Convertible Subordinated Debentures Indenture, dated as of February 15,
1996.

      1.55 "Intercompany Claim" means any Claim held by a Debtor against another
Debtor, including, without limitation, (a) any account reflecting intercompany
book entries by one Debtor with respect to any other Debtor, (b) any such Claim
not reflected in such book entries that is held by a Debtor against another
Debtor, and (c) any derivative Claim asserted by or on behalf of one Debtor
against another.

      1.56 "Interest" means (i) the interest of any holder of equity securities
of PhyCor represented by any issued and outstanding shares of common stock,
preferred stock, or other instrument evidencing a current ownership interest in
the Debtor, whether or not transferable and (ii) any option, warrant, or right,
contractual or otherwise, to acquire or receive any such interest.

      1.57 "Lien" means a charge against or interest in property to secure
payment of a debt or performance of an obligation.

      1.58 "Litigation Claims" means the claims, rights of action, suits, or
proceedings, whether in law or in equity, whether known or unknown, that any
Debtor or Estate may hold against any Person, including, but not limited to the
claims, rights of action, suits and proceedings described in Exhibit D attached
hereto, to be retained by Reorganized PhyCor pursuant to Article IV.I of this
Plan.

      1.59 "Management Incentive Options" means the stock grants and options to
be issued by Reorganized PhyCor to key employees pursuant to the Management
Incentive Plan.

      1.60 "Management Incentive Plan" means the management incentive plan
pursuant to which the Management Incentive Options will be issued, substantially
in the form attached hereto as Exhibit B.

      1.61 "Management Incentive Plan Participants" means those PhyCor employees
eligible to participate in the Management Incentive Plan, under the terms
thereof.

      1.62 "New Common Stock" means the shares of common stock of Reorganized
PhyCor authorized under Article IV.A hereof and the Amended Certificate of
Incorporation.

      1.63 "New Securities" means, collectively, the New Common Stock and
Management Incentive Options.

      1.64 "Noteholders' Committee" means the informal committee of holders of
approximately 59% principal value of 4.5% Convertible Subordinated Debentures,
the members of which include Creedon Capital Management, Magten Asset Management
Corp., Pyramid Trading Ltd., Zazove Associates, Whitebox, Liberty View, and
Convertible Desk, LLC.

      1.65 "Other Priority Claim" means a Claim entitled to priority pursuant to
section 507(a) of the Bankruptcy Code other than a Priority Tax Claim or an
Administrative Claim.


                                       7
<PAGE>

      1.66 "Other Secured Claims" means, collectively, all Secured Claims
against a Debtor other than the AmSouth Secured Claim.

      1.67 "Person" means an individual, corporation, partnership, governmental
unit, joint venture, association, joint stock company, limited liability
company, limited liability partnership, trust, estate, unincorporated
organization, or other entity.

      1.68 "Petition Date" means January 31, 2002, the date on which the Debtors
filed their petitions for reorganization relief commencing the Chapter 11 Cases.

      1.69 "Plan" means this joint plan of reorganization proposed by the
Debtors for the resolution of their outstanding Claims and Interests in these
Chapter 11 Cases, as such plan may be amended from time to time in accordance
with the Bankruptcy Code and Bankruptcy Rules.

      1.70 "Plan Supplement" means the compilation of documents and forms of
documents specified in the Plan which will be filed with the Bankruptcy Court on
or before the date that is seven days prior to the Confirmation Hearing and
which documents and forms of documents shall be in form and substance reasonably
acceptable to the Debtors, Warburg, Pincus, the Noteholders' Committee, and any
statutory committee, if appointed.

      1.71 "Preferred Stock" means the preferred stock, no par value, of PhyCor,
authorized but not issued as of the Petition Date.

      1.72 "Preferred Stock Interest" means any Interest from or under the
Preferred Stock.

      1.73 "Priority Tax Claim" means a Claim that is entitled to priority
pursuant to section 507(a)(8) of the Bankruptcy Code.

      1.74 "Professional" means any professional employed in the Chapter 11
Cases pursuant to sections 327 or 1103 of the Bankruptcy Code or otherwise and
any professionals seeking compensation or reimbursement of expenses in
connection with the Chapter 11 Cases pursuant to section 503(b)(4) or 1129(a)(4)
of the Bankruptcy Code.

      1.75 "Professional Fee Claim" means a Claim of a Professional for
compensation for services rendered, and/or reimbursement of costs and expenses
incurred, after the Petition Date and prior to and including the Consummation
Date.

      1.76 "Professional Fee Order" means the order entered by the Bankruptcy
Court on _______, 2002, establishing procedures for the payment of Professional
Fee Claims in the Debtors' Chapter 11 Cases.

      1.77 "Pro Rata" means, at any time, the proportion that the Face Amount of
a Claim in a particular Class bears to the aggregate Face Amount of all Claims
(including Disputed Claims, but excluding Disallowed Claims) in such Class,
unless the Plan provides otherwise.

      1.78 "Reinstated" or "Reinstatement" means, notwithstanding any
contractual provision or applicable law that entitles the holder of a Claim to
demand or receive accelerated payment of such Claim after the occurrence


                                       8
<PAGE>

of a default, (i) curing any such default that occurred before or after the
Petition Date, other than a default of a kind specified in section 365(b)(2) of
the Bankruptcy Code, (ii) reinstating the maturity of such Claim as such
maturity existed before such default, (iii) compensating the holder of such
Claim for any damages incurred as a result of any reasonable reliance by such
holder on such contractual provision or such applicable law, and (iv) not
otherwise altering the legal, equitable, or contractual rights to which such
Claim entitles the holder of such Claim.

      1.79 "Reorganized PhyCor" means PhyCor, Inc., a Tennessee corporation, on
and after the Consummation Date, as substantively consolidated with all of the
Debtor Subsidiaries and as merged with and into all the Debtor Subsidiaries
except The Member Corporation, Inc. and SynerPhy of Rome.

      1.80 "Scheduled" means, with respect to any Claim or Interest, the
characterization, and amount, if any, of such Claim or Interest as set forth in
the Schedules.

      1.81 "Schedules" means the schedules of assets and liabilities and the
statements of financial affairs filed in the Bankruptcy Court by each of the
Debtors on January 31, 2002, as such schedules or statements have been or may be
further amended or supplemented from time to time in accordance with Fed. R.
Bankr. P. 1009 or orders of the Bankruptcy Court.

      1.82 "Secured Claim" means a Claim, other than a Setoff Claim, that is
secured by a security interest in or lien upon property, or the proceeds of the
sale of such property, in which the Debtors have an interest, to the extent of
the value, as of the Consummation Date or such later date as is established by
the Bankruptcy Court, of such interest or lien as determined by a Final Order of
the Bankruptcy Court pursuant to section 506 of the Bankruptcy Code or as
otherwise agreed upon in writing by any Debtor or Reorganized PhyCor and the
holder of such Claim.

      1.83 "Securities Act" means the Securities Act of 1933, 15 U.S.C. Sections
77a-77aa, as now in effect or hereafter amended.

      1.84 "Setoff Claim" means a Claim of a holder that has a valid right of
setoff with respect to such Claim, which right is enforceable under section 553
of the Bankruptcy Code as determined by a Final Order or as otherwise agreed in
writing by any Debtor, to the extent of the amount subject to such right of
setoff.

      1.85 "Shareholder Litigation Claims" means claims based on the purported
securities class actions originally filed in state and federal courts in
Tennessee and New York in 1998 and 1999 against PhyCor and certain of its
current and former officers and directors, such claims being set forth in the
following proceedings: James Meyer, et al. v. Joseph C. Hutts, et al., Civil
Action No. 3-98-0834, United States District Court for the Middle District of
Tennessee; John Butler, et al. v. Joseph C. Hutts, et al., Civil Action No.
3-98-0911, United States District Court for the Middle District of Tennessee;
Louis J. D'Ambrosio, et al. v. Joseph C. Hutts, et al., Civil Action No.
3-98-0948, United States District Court for the Middle District of Tennessee;
Christopher Cimino, et al. v. Joseph C. Hutts, et al., Civil Action No.
3-98-1008, United States District Court for the Middle District of Tennessee;
Dr. Stuart Siegal, et al. v. Joseph C. Hutts, et al., Civil Action No.
3-98-09734, United States District Court for the Middle District of Tennessee;
Albert Zucker, et al. v. Joseph C. Hutts, et al., Civil Action No. 98-CV-6191,
United States District Court for the Eastern District of New York; Malcolm
Rosenwald, et al. v. Joseph C. Hutts, et al., Civil Action No. 98-CV- 5642,
United States District Court for the Eastern District of New York; Robert H.
Leonard, et al. v. Joseph C. Hutts, et al., Civil Action No. 98-2813-I, Chancery
Court for Davidson


                                       9
<PAGE>

County, Tennessee; James W. Bryant, et al. v. Joseph C. Hutts, et al., Civil
Action No. 98-2719-III, Chancery Court for Davidson County, Tennessee; Stanley
Gale, et al. v. Joseph C. Hutts, et al., Civil Action No. 3:99-0561, United
States District Court for the Middle District of Tennessee; Robert H. Leonard,
et al. v. PhyCor, Inc. and KPMG, LLP, Civil Action No. 3:99-0807, United States
District Court for the Middle District of Tennessee; and Parul Patel, et al. v.
Hutts, Civil Action No. 99-2353-I, Chancery Court for Davidson County,
Tennessee.

      1.86 "Substantive Consolidation Order" means the order, which may be the
Confirmation Order, substantively consolidating the Chapter 11 Cases, as
provided in Article IV.A of the Plan.

      1.87 "Unimpaired Claim" means a Claim that is not an Impaired Claim.

      1.88 "Voting Deadline" means the date and time, as fixed by an order of
the Bankruptcy Court and set forth in the Disclosure Statement, by which all
Ballots to accept or reject the Plan must be received by the Information Agent.

      1.89 "Warburg, Pincus" means Warburg, Pincus Equity Partners, L.P.;
Warburg, Pincus Netherlands Equity Partners I, C.V.; Warburg, Pincus Netherlands
Equity Partners II, C.V.; and Warburg, Pincus Netherlands Equity Partners III,
C.V.

      1.90 "Warrants" means all incentive stock options, non-qualified stock
options, and stock appreciation rights granted under PhyCor-sponsored stock
option plans, and any other options, warrants, or rights, contractual or
otherwise, if any, to acquire or receive an Interest, authorized as of the
Petition Date.

      1.91 "Warrants Interest" means any Interest arising from or under the
Warrants.

      1.92 "Zero Coupon Note Claim" means a Claim of a holder of Zero Coupon
Notes, arising from or under the Zero Coupon Notes.

      1.93 "Zero Coupon Notes" means the Zero Coupon Convertible Subordinated
Notes due September 3, 2014 and outstanding under the Zero Coupon Notes
Securities Purchase Agreement, dated as of June 15, 1999, as amended August 23,
1999 and June 9, 2000.

C.    RULES OF INTERPRETATION

      For purposes of the Plan (a) any reference in the Plan to a contract,
instrument, release, indenture, or other agreement or document's being in a
particular form or on particular terms and conditions means that such document
shall be substantially in such form or substantially on such terms and
conditions, (b) any reference in the Plan to an existing document or exhibit
filed or to be filed means such document or exhibit as it may have been or may
be amended, modified, or supplemented, (c) unless otherwise specified, all
references in the Plan to Sections, Articles, Schedules, and Exhibits are
references to Sections, Articles, Schedules, and Exhibits of or to the Plan, (d)
the words "herein" and "hereto" refer to the Plan in its entirety rather than to
a particular portion of the Plan, (e) captions and headings to Articles and
Sections are inserted for convenience of reference only and are not intended to
be a part of or to affect the interpretation of the Plan, and (f) the rules of
construction set forth in section 102 of the Bankruptcy Code and in the
Bankruptcy Rules shall apply.


                                       10
<PAGE>

D.    COMPUTATION OF TIME

      In computing any period of time prescribed or allowed by the Plan, the
provisions of Fed. R. Bankr. P. 9006(a) shall apply.

                                   ARTICLE II

                     CLASSIFICATION OF CLAIMS AND INTERESTS

A.    INTRODUCTION

      All Claims and Interests, except Administrative Claims and Priority Tax
Claims, are placed in the Classes set forth below. In accordance with section
1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax
Claims, as described below, have not been classified.

      A Claim or Interest is placed in a particular Class only to the extent
that the Claim or Interest falls within the description of that Class, and is
classified in other Classes to the extent that any portion of the Claim or
Interest falls within the description of such other Classes. A Claim is also
placed in a particular Class for the purpose of receiving distributions pursuant
to the Plan only to the extent that such Claim is an Allowed Claim in that Class
and such Claim has not been paid, released, or otherwise settled prior to the
Consummation Date.

B.    UNCLASSIFIED CLAIMS (NOT ENTITLED TO VOTE ON THE PLAN)

      1.    Administrative Claims

      2.    Priority Tax Claims

C.    UNIMPAIRED CLASSES OF CLAIMS (DEEMED TO HAVE ACCEPTED THE PLAN AND,
      THEREFORE, NOT ENTITLED TO VOTE)

      1.    Class 1: Other Priority Claims

      Class 1 consists of all Other Priority Claims.

      2.    Class 2a: AmSouth Secured Claim

      Class 2a consists of the AmSouth Secured Claim.

      3.    Class 2b: Other Secured Claims

      Class 2b consists of all Secured Claims other than the AmSouth Secured
      Claim.


                                       11
<PAGE>

D.    IMPAIRED CLASSES OF CLAIMS OR INTERESTS (CLASSES 3 AND 4 ARE ENTITLED TO
      VOTE ON THE PLAN; CLASSES 5, 6, 7 AND 8 ARE DEEMED TO HAVE REJECTED THE
      PLAN AND, THEREFORE, ARE NOT ENTITLED TO VOTE)

      1.    Class 3: Convenience Claims

      Class 3 consists of all Convenience Claims.

      2.    Class 4: General Unsecured Claims

      Class 4 consists of all General Unsecured Claims.

      3.    Class 5: Preferred Stock Interests

      Class 5 consists of all Preferred Stock Interests.

      4.    Class 6: Common Stock Interests

      Class 6 consists of all Common Stock Interests.

      5.    Class 7: Shareholder Litigation Claims

      Class 7 consists of all Shareholder Litigation Claims.

      6.    Class 8: Warrants Interests

      Class 8 consists of all Warrants Interests.

                                   ARTICLE III

                        TREATMENT OF CLAIMS AND INTERESTS

A.    UNCLASSIFIED CLAIMS

      1.    Administrative Claims

      Except as otherwise provided for herein, and subject to the requirements
of Article XV.A hereof, on, or as soon as reasonably practicable after, the
later of (a) the Distribution Date or (b) the date which is 30 days after the
date such Administrative Claim becomes an Allowed Administrative Claim, each
holder of an Allowed Administrative Claim shall, in full satisfaction,
settlement, and release of and in exchange for such Allowed Administrative
Claim, receive (i) Cash equal to the unpaid portion of such Allowed
Administrative Claim, or (ii) such other treatment as to which the Debtors or
Reorganized PhyCor and such holder shall have agreed upon in writing; provided,
however, that Allowed Administrative Claims with respect to liabilities incurred
by the Debtors


                                       12
<PAGE>

in the ordinary course of business during the Chapter 11 Cases shall be paid in
the ordinary course of business in accordance with the terms and conditions of
any agreements relating thereto.

      2.    Priority Tax Claims

      On, or as soon as reasonably practicable after, the later of (a) the
Distribution Date or (b) the date which is 30 days after the date such Priority
Tax Claim becomes an Allowed Priority Tax Claim in the sole discretion of the
Debtors or Reorganized PhyCor, either (i) each Allowed Priority Tax Claim shall
remain unaltered with respect to all the legal, equitable, and contractual
rights to which such Allowed Priority Tax Claim entitles the holder thereof,
(ii) each holder of an Allowed Priority Tax Claim shall, in full satisfaction,
settlement, and release of and in exchange for such Allowed Priority Tax Claim,
receive (A) Cash equal to the amount of such Allowed Priority Tax Claim, (B)
Cash payments over a period not exceeding six years from the date of assessment
of such Allowed Priority Tax Claim as provided in section 1129(a)(9)(C) of the
Bankruptcy Code, plus interest on the unpaid portion thereof at the Case
Interest Rate, or (iii) such other treatment as to which the Debtors or
Reorganized PhyCor and such holder shall have agreed upon in writing; provided,
however, that any Claim or demand for payment of a penalty (other than a penalty
of the type specified in section 507(a)(8)(G) of the Bankruptcy Code) shall be
disallowed pursuant to this Plan, and the holder of an Allowed Priority Tax
Claim shall not assess or attempt to collect such penalty from the Debtors,
their Estates, Reorganized PhyCor, or their property.

B.    UNIMPAIRED CLASSES OF CLAIMS

      1.    Class 1: Other Priority Claims

      On, or as soon as reasonably practicable after, the later of (a) the
Distribution Date or (b) the date which is 30 days after the date such Other
Priority Claim becomes an Allowed Other Priority Claim, the holder of an Allowed
Other Priority Claim shall, in full satisfaction, settlement, release, and
discharge of and in exchange for such Allowed Class 1 Other Priority Claim, in
the sole discretion of PhyCor, receive (i) Cash in an amount equal to such
Allowed Class 1 Other Priority Claim, or (ii) such other treatment as the
Debtors or Reorganized PhyCor and such holder shall have agreed upon in writing.

      2.    Class 2a: AmSouth Secured Claim

      On as reasonably practicable after, the later of (a) the Distribution Date
or (b) the date which is 30 days after such AmSouth Secured Claim becomes an
Allowed AmSouth Secured Claim, the holder of the Allowed AmSouth Secured Claim
shall, in full satisfaction, settlement, release, and discharge of and in
exchange for such Allowed Class 2a AmSouth Secured Claim, in the sole discretion
of PhyCor, (i) receive Cash in an amount equal to such Allowed Class 2a AmSouth
Secured Claim, (ii) upon abandonment by Reorganized PhyCor, receive the
collateral securing such holder's Allowed Class 2a AmSouth Secured Claim, plus
any interest, in Cash, required to be paid under section 506(b) of the
Bankruptcy Code, (iii) have its Allowed Class 2a AmSouth Secured Claim
Reinstated, or (iv) receive such other treatment as the Debtors or Reorganized
PhyCor and such holder shall have agreed upon in writing.


                                       13
<PAGE>

      3.    Class 2b: Other Secured Claims

      On, or as reasonably practicable after the later of (a) the Distribution
Date or (b) the date which is 30 days after the date such Other Secured Claim
becomes an Allowed Other Secured Claim, the holder of an Allowed Other Secured
Claim shall, in full satisfaction, settlement, release, and discharge of and in
exchange for such Allowed Class 2b Other Secured Claim, in the sole discretion
of PhyCor, (i) receive Cash in an amount equal to such Allowed Class 2b Other
Secured Claim, (ii) upon abandonment by Reorganized PhyCor, receive the
collateral securing such holder's Allowed Class 2b Other Secured Claim, plus any
interest, in Cash, required to be paid under section 506(b) of the Bankruptcy
Code, (iii) have its Allowed Class 2b Other Secured Claim Reinstated, or (iv)
receive such other treatment as the Debtors or Reorganized PhyCor and such
holder shall have agreed upon in writing.

C.    IMPAIRED CLASSES OF CLAIMS

      1.    Class 3: Convenience Claims

                  a.    Distributions

      On, or as soon as reasonably practicable after, the later of (a) the
Distribution Date or (b) the date which is 30 days after the date such
Convenience Claim becomes an Allowed Convenience Claim, the holder of an Allowed
Convenience Claim shall, in full satisfaction, settlement, and release of and in
exchange for such Allowed Convenience Claim, receive Cash equal to 11.9% of the
amount of such Allowed Convenience Claim.

                  b.    Election To Be Treated As Convenience Claim

      By checking the appropriate box on a timely cast Ballot, the holder of an
Allowed Class 4 General Unsecured Claim in an amount greater than $50,000 may
elect to reduce the amount of such holder's Allowed Class 4 General Unsecured
Claim to $50,000 and to receive treatment as an Allowed Class 3 Convenience
Claim in the amount of $50,000, as described in Article III.C.1.a above. Such an
election shall constitute a waiver of the right to collect, and a release of,
the amount of the Allowed Class 4 Unsecured Claim in excess of $50,000, and the
holder of such Allowed Class 3 Convenience Claim shall be deemed to have
released the Debtors, their Estates, Reorganized PhyCor, and their respective
property from any and all liability for such excess amount. The holder of an
Allowed Class 4 General Unsecured Claim that timely elects to reduce the amount
of its Allowed Claim shall be deemed to be the holder of an Allowed Class 3
Convenience Claim for classification, voting, and all other purposes under this
Plan.

      2.    Class 4: General Unsecured Claims

      On, or as soon as reasonably practicable after, the later of (a) the
Distribution Date or (b) the date which is 30 days after the date such General
Unsecured Claim becomes an Allowed General Unsecured Claim, the holder of an
Allowed Class 4 General Unsecured Claim shall, in full satisfaction, settlement,
release, and discharge of and in exchange for such Allowed Class 4 General
Unsecured Claim, receive its pro rata share of 5.7 million shares of the New
Common Stock, such number being equivalent to 95% of the outstanding shares of
New Common Stock.


                                       14
<PAGE>

      On the Consummation Date, the (i) 4.5% Convertible Subordinated Debenture
Claims shall be deemed Allowed Class 4 General Unsecured Claims in the aggregate
amount of $196.5 million, plus accrued interest at the non-default rate through
the Petition Date and fees and expenses owing in respect thereof and (ii) the
Zero Coupon Note Claims shall be deemed Allowed Class 4 General Unsecured Claims
in the aggregate accreted amount of $ 116.8 million as of January 15, 2002, plus
accrued interest and fees and expenses owing in respect thereof through the
Petition Date.

      3.    Class 5: Preferred Stock Interests

      Each holder of a Class 5 Preferred Stock Interest shall not be entitled
to, and shall not receive or retain, any property or interest in property on
account of such Interests, which shall be cancelled on the Consummation Date.

      4.    Class 6: Common Stock Interests

      Each holder of a Class 6 Common Stock Interest shall not be entitled to,
and shall not receive or retain, any property or interest in property on account
of such Interests, which shall be cancelled on the Consummation Date.

      5.    Class 7: Shareholder Litigation Claims

      Each holder of a Class 7 Shareholder Litigation Claim shall not be
entitled to, and shall not receive or retain, any property or interest in
property on account of such Claim, which shall be discharged on the Consummation
Date.

      6.    Class 8: Warrants Interests

      Each holder of a Class 8 Warrants Interest shall not be entitled to, and
shall not receive or retain, any property or interest in property on account of
such Interests, which shall be cancelled on the Consummation Date.

                                   ARTICLE IV

                      MEANS FOR IMPLEMENTATION OF THE PLAN

A.    SUBSTANTIVE CONSOLIDATION

      1.    Consolidation Of The Chapter 11 Cases

      The Plan contemplates and is predicated upon entry of an order
substantively consolidating the Debtors' Estates and Chapter 11 Cases for the
purposes of all actions associated with Confirmation and consummation of the
Plan. As a result of such consolidation, (i) all Intercompany Claims by,
between, and among the Debtors shall be eliminated, (ii) all assets and
liabilities of the Debtor Subsidiaries shall be merged or treated as if they
were merged with the assets and liabilities of PhyCor, (iii) any obligation of a
Debtor and all guarantees thereof by one or more of the other Debtors shall be
deemed to be one obligation of PhyCor, (iv) the Debtor Subsidiary Interests


                                       15
<PAGE>

shall be cancelled, and (v) each Claim filed or to be filed against any Debtor
shall be deemed filed only against PhyCor and shall be deemed a single Claim
against and a single obligation of PhyCor. On the Confirmation Date, and in
accordance with the terms of the Plan and the consolidation of the assets and
liabilities of the Debtors, all Claims based upon guaranties of collection,
payment, or performance made by the Debtors as to the obligations of another
Debtor shall be released and of no further force and effect. On the Consummation
Date, all of the Debtor Subsidiaries other than The Member Corporation, Inc. and
SynerPhy of Rome, Inc. (f/k/a PhyCor of Rome, Inc.) shall be merged with and
consolidated into PhyCor pursuant to the terms of a plan and agreement of merger
attached hereto as Exhibit E.

      2.    Substantive Consolidation Order

      Unless the Bankruptcy Court has approved the substantive consolidation of
the Chapter 11 Cases by a prior order, this Plan shall serve as, and shall be
deemed to be, a motion for entry of an order substantively consolidating the
Debtors' Chapter 11 Cases. If no objection to substantive consolidation is
timely filed and served by any holder of an Impaired Claim affected by the Plan
as provided herein on or before the Voting Deadline or such other date as may be
established by the Bankruptcy Court, the Substantive Consolidation Order may be
entered by the Bankruptcy Court. If any such objections are timely filed and
served, a hearing with respect to the substantive consolidation of the Chapter
11 Cases and any objections thereto shall be scheduled by the Bankruptcy Court,
which hearing may be prior to, or may but is not required to coincide with, the
Confirmation Hearing.

B.    CONTINUED CORPORATE EXISTENCE

      PhyCor shall continue to exist as Reorganized PhyCor after the
Consummation Date in accordance with the laws of the State of Tennessee and
pursuant to the amended and restated charter and by-laws in effect prior to the
Consummation Date, except to the extent such amended and restated charter and
by-laws are amended under this Plan.

C.    AMENDED AND RESTATED CHARTER AND BY-LAWS

      The amended and restated charter and by-laws of PhyCor shall be amended as
necessary to satisfy the provisions of the Plan and the Bankruptcy Code. The
amended and restated charter of Reorganized PhyCor shall be amended, among other
things: (i) to authorize 25 million shares of New Common Stock, $0.01 par value
per share, and (ii) pursuant to section 1123(a)(6) of the Bankruptcy Code, to
prohibit the issuance of non-voting equity securities. The Amended and Restated
Charter and By-laws shall be included in the Plan Supplement.

D.    CORPORATE ACTION

      1.    Cancellation Of Existing Securities And Agreements

      On the Consummation Date, except as otherwise provided for herein, (i) the
Existing Securities, to the extent not already cancelled, shall be cancelled and
(ii) the obligations of PhyCor under the Existing Securities and under PhyCor's
amended and restated charter or any agreements, indentures, or certificates of
designations governing the Existing Securities shall be discharged; provided,
however, that each indenture or other agreement that governs the rights of the
holder of a Claim based on the Existing Securities and that is administered by
an indenture trustee, agent, or servicer shall continue in effect solely for the
purposes of (a) allowing such indenture


                                       16
<PAGE>

trustee, agent, or servicer to make the distributions to be made on account of
such Claims under the Plan as provided in Article III hereof and (b) permitting
such indenture trustee, agent, or servicer to maintain any rights it may have
for fees, costs, and expenses under such indenture or other agreement.

      Any actions taken by an indenture trustee, agent, or servicer that are not
for the purposes authorized in this Article IV.D.1 shall not be binding upon the
Debtors. Notwithstanding the foregoing, the Debtor may terminate any indenture
or other governing agreement and the authority of any indenture trustee, agent,
or servicer to act thereunder at any time, with or without cause, by giving five
days' written notice of termination to the indenture trustee, agent, or
servicer. If distributions under the Plan have not been completed at the time of
termination of the indenture or other governing agreement, the Debtors shall
designate a Disbursing Agent to act in place of the indenture trustee, agent, or
servicer, and the provisions of this Article IV.D.1 shall be deemed to apply to
the new distribution agent.

E.    RESTRUCTURING TRANSACTIONS

      1.    New Securities

                  a.    Authorization

      As of the Consummation Date, the authorization by Reorganized PhyCor of
(i) 25 million shares of New Common Stock and (ii) Management Incentive Options
in accordance with the Management Incentive Plan, is hereby authorized without
further act or action under applicable law, regulation, order, or rule.

                  b.    Issuance

      The New Securities authorized pursuant to this Article IV.E.1 shall be
issued by Reorganized PhyCor pursuant to the Plan without further act or action
under applicable law, regulation, order, or rule, as follows: (i) 5.7 million
shares of New Common Stock, representing 95% of the initial issued shares of New
Common Stock, subject to dilution by the Management Incentive Options, shall be
issued to the holders of Class 4 General Unsecured Claims and (ii) the
Management Incentive Options shall be issued to the Management Incentive Plan
Participants in accordance with the Management Incentive Plan.

F.    DIRECTORS AND OFFICERS

      On the Consummation Date, the term of the current board of directors of
the PhyCor shall expire. The initial board of directors of the Reorganized
PhyCor after the Consummation Date shall consist of five members, which shall
include the Chief Executive Officer of the Reorganized PhyCor, Tarpley B. Jones,
who shall be the Chairman of the Board; one person who shall be designated by
Warburg, Pincus Equity Partners, L.P. or its affiliates ("Warburg, Pincus"); and
three people who shall be designated by the Noteholders' Committee. In the event
that Warburg, Pincus fails to designate a board member, the Noteholders'
Committee shall succeed to Warburg, Pincus' right to so designate a board
member. The Debtors and the Noteholders' Committee intend to announce prior to
the Confirmation Date the identities of all individuals proposed to serve as
directors or officers of Reorganized PhyCor by inclusion of a list of proposed
directors and/or officers in the Plan Supplement. The


                                       17
<PAGE>

board of directors of Reorganized PhyCor shall have the responsibility for the
management, control, and operation of Reorganized PhyCor on and after the
Consummation Date.

G.    EFFECTUATING DOCUMENTS; FURTHER TRANSACTIONS

      The chairman of the board of directors, president, chief financial
officer, or any other appropriate officer of Reorganized PhyCor shall be
authorized to execute, deliver, file, or record such contracts, instruments,
releases, indentures, and other agreements or documents, and take such actions,
as may be necessary or appropriate to effectuate and further evidence the terms
and conditions of the Plan. The secretary or assistant secretary of Reorganized
PhyCor shall be authorized to certify or attest to any of the foregoing actions.

H.    VESTING OF ASSETS

      The property of the Debtors' Estates that is not specifically disposed of
pursuant to the Plan shall vest in PhyCor on the Confirmation Date. Thereafter,
PhyCor may operate its business and may use, acquire, and dispose of property
free of any restrictions of the Bankruptcy Code, the Bankruptcy Rules, and the
Bankruptcy Court. As of the Confirmation Date, all property of PhyCor and the
Debtor Subsidiaries shall be free and clear of all Claims and interests, except
as specifically provided in the Plan or the Confirmation Order. Without limiting
the generality of the foregoing, PhyCor may, without application to or approval
by the Bankruptcy Court, pay professional fees and expenses that it incurs after
the Confirmation Date.

I.    PRESERVATION OF RIGHTS OF ACTION; SETTLEMENT OF LITIGATION CLAIMS

      1.    Preservation Of Rights Of Action

      Except as otherwise provided in the Plan, the Confirmation Order, or in
any document, instrument, release, or other agreement entered into in connection
with the Plan, in accordance with section 1123(b) of the Bankruptcy Code, the
Debtors and their Estates shall retain the Litigation Claims. Reorganized
PhyCor, as the successor in interest to the Debtors, may enforce, sue on, settle
or compromise (or decline to do any of the foregoing) any or all of the
Litigation Claims. The failure of the Debtors to list a claim, right of action,
suit, or proceeding on Exhibit D shall not constitute a waiver or release by the
Debtors or their Estates of such claim, right of action, suit, or proceeding.

      2.    Settlement Of Litigation Claims

      At any time after the Confirmation Date and before the Consummation Date,
notwithstanding anything in this Plan to the contrary, the Debtors, in
consultation with the Creditors' Committee, may settle some or all of the
Litigation Claims with the approval of the Bankruptcy Court pursuant to Fed. R.
Bankr. P. 9019.

J.    CREDITORS' COMMITTEE

      The Creditors' Committee shall continue in existence until the date which
is 30 days after the Consummation Date, to exercise those powers and perform
those duties specified in section 1103 of the Bankruptcy Code, and shall perform
such other duties as it may have been assigned by the Bankruptcy Court prior to
the Consummation Date. On the date which is 30 days after the Consummation Date,
the Creditors' Committee shall be dissolved and


                                       18
<PAGE>

its members shall be deemed released of all their duties, responsibilities, and
obligations in connection with the Chapter 11 Cases or the Plan and its
implementation, and the retention or employment of the Creditors' Committee's
attorneys, accountants, and other agents shall terminate. All expenses of
Creditors' Committee members and the fees and expenses of their professionals
through the Confirmation Date shall be paid in accordance with the terms and
conditions of the Professional Fee Order.

K.    SOURCES OF CASH FOR PLAN DISTRIBUTIONS

      Except as otherwise provided in the Plan or the Confirmation Order, all
Cash necessary for Reorganized PhyCor to make payments pursuant to the Plan
shall be obtained from the Debtors' cash balances and the liquidation of the
Debtors' remaining non-Cash assets, if any. Cash payments to be made pursuant to
the Plan shall be made by Reorganized PhyCor (or any successor thereto) or, if
the Disbursing Agent is an entity other than Reorganized PhyCor, the Disbursing
Agent.

L.    RELEASE OF LIENS

      Except as otherwise provided in the Plan, the Confirmation Order, or in
any document, instrument, or other agreement created in connection with, or
authorized by, the Plan, on the Consummation Date, all mortgages, deeds of
trust, liens or other security interests against the property of the Estates
shall be released.

M.    EXEMPTION FROM CERTAIN TRANSFER TAXES

      Pursuant to section 1146(c) of the Bankruptcy Code, any transfers from the
Debtors to Reorganized PhyCor or any other Person or entity pursuant to the Plan
shall not be subject to any document recording tax, stamp tax, conveyance fee,
intangibles or similar tax, mortgage tax, stamp act, real estate transfer tax,
mortgage recording tax, or other similar tax or governmental assessment and the
Confirmation Order shall direct the appropriate state or local governmental
officials or agents to forego the collection of any such tax or governmental
assessment and to accept for filing and recordation any of the foregoing
instruments or other documents without the payment of any such tax or
governmental assessment.

                                    ARTICLE V

                       ACCEPTANCE OR REJECTION OF THE PLAN

A.    CLASSES ENTITLED TO VOTE

      Each Impaired Class of Claims that will (or may) receive or retain
property or any interest in property under the Plan shall be entitled to vote to
accept or reject the Plan. Ballots shall be cast and tabulated on a consolidated
basis, in accordance with the expected substantive consolidation of the Debtors'
Estates and Chapter 11 Cases. By operation of law, each Unimpaired Class of
Claims is deemed to have accepted the Plan and, therefore, is not entitled to
vote to accept or reject the Plan. Because holders of Class 5 Preferred Stock
Interests, Class 6 Common Stock Interests, Class 7 Shareholder Litigation
Claims, and Class 8 Warrants Interests are not entitled to receive or retain any
property under the Plan, Classes 5, 6, 7, and 8 are presumed to have rejected
the Plan and, therefore, are not entitled to vote on the Plan.


                                       19
<PAGE>

B.    ACCEPTANCE BY IMPAIRED CLASSES

      An Impaired Class of Claims shall have accepted the Plan if (i) the
holders (other than any holder designated under section 1126(e) of the
Bankruptcy Code) of at least two-thirds in amount of the Allowed Claims actually
voting in such Class have voted to accept the Plan and (ii) the holders (other
than any holder designated under section 1126(e) of the Bankruptcy Code) of more
than one-half in number of the Allowed Claims actually voting in such Class have
voted to accept the Plan.

C.    CRAMDOWN

      To the extent necessary, the Debtors request Confirmation of the Plan, as
it may be modified from time to time, under section 1129(b) of the Bankruptcy
Code. The Debtors reserve the right to modify the Plan to the extent, if any,
that Confirmation pursuant to section 1129(b) of the Bankruptcy Code requires
modification.

                                   ARTICLE VI

                             SECURITIES TO BE ISSUED
                           IN CONNECTION WITH THE PLAN

A.    DESCRIPTION OF SECURITIES TO BE ISSUED IN CONNECTION WITH THE PLAN

      On or before the Distribution Date, Reorganized PhyCor shall issue for
distribution, in accordance with the provisions of Article IV.E hereof, the New
Common Stock and Management Incentive Options required for distribution or sale
pursuant to the provisions of the Plan. All securities to be issued will be
deemed issued as of the Distribution Date regardless of the date on which they
are actually distributed. A description of the terms of the New Common Stock is
attached hereto as Exhibit A. The Management Incentive Plan is attached hereto
as Exhibit B.

                                   ARTICLE VII

                       PROVISIONS GOVERNING DISTRIBUTIONS

A.    DISTRIBUTIONS FOR CLAIMS ALLOWED AS OF THE CONSUMMATION DATE

      Except as otherwise provided herein or as ordered by the Bankruptcy Court,
distributions to be made on account of Claims that are Allowed Claims as of the
Consummation Date shall be made on the Distribution Date. The New Securities to
be issued under this Plan shall be deemed issued as of the Distribution Date
regardless of the date on which they are actually distributed. Distributions on
account of Claims that first become Allowed Claims after the Consummation Date
shall be made pursuant to Articles III, VII, and IX of this Plan.


                                       20
<PAGE>

B.    INTEREST ON CLAIMS

      Unless otherwise specifically provided for in the Plan or Confirmation
Order, or required by applicable bankruptcy law, postpetition interest shall not
accrue or be paid on any Claims, and no holder of a Claim shall be entitled to
interest accruing on or after the Petition Date on any Claim.

C.    DISTRIBUTIONS BY DISBURSING AGENT

      The Disbursing Agent shall make all distributions required under this Plan
(subject to the provisions of Articles III, VII, and IX hereof), except with
respect to a holder of a Claim whose distribution is governed by an indenture or
other agreement and is administered by an indenture trustee, agent, or servicer,
which distributions shall be deposited with the appropriate indenture trustee,
agent, or servicer, who shall deliver such distributions to the holders of
Claims in accordance with the provisions of this Plan and the terms of the
relevant indenture or other governing agreement.

      If the Disbursing Agent is an independent third party designated by
Reorganized PhyCor to serve in such capacity (or, in the case of an indenture or
other agreement which governs distributions and is administered by an indenture
trustee, agent, or servicer), such Disbursing Agent, indenture trustee, agent,
or servicer shall receive, without further Bankruptcy Court approval, reasonable
compensation for distribution services rendered pursuant to the Plan and
reimbursement of reasonable out-of-pocket expenses incurred in connection with
such services from Reorganized PhyCor on terms acceptable to Reorganized PhyCor.
No Disbursing Agent shall be required to give any bond or surety or other
security for the performance of its duties unless otherwise ordered by the
Bankruptcy Court. If otherwise so ordered, all costs and expenses of procuring
any such bond shall be paid by Reorganized PhyCor.

D.    DELIVERY OF DISTRIBUTIONS AND UNDELIVERABLE OR UNCLAIMED DISTRIBUTIONS

      1.    Delivery Of Distributions In General

      Distributions to holders of Allowed Claims shall be made by the Disbursing
Agent or the appropriate indenture trustee, agent, or servicer, as the case may
be, (a) at the addresses set forth on the proofs of Claim filed by such holders
(or at the last known addresses of such holders if no proof of Claim is filed or
if the Debtor has been notified of a change of address), (b) at the addresses
set forth in any written notices of address changes delivered to the Disbursing
Agent after the date of any related proof of Claim, (c) at the addresses
reflected in the Schedules if no proof of Claim has been filed and the
Disbursing Agent has not received a written notice of a change of address, (d)
in the case of the holder of a Claim which is governed by an indenture or other
agreement and is administered by an indenture trustee, agent, or servicer, at
the addresses contained in the official records of such indenture trustee,
agent, or servicer, or (e) at the addresses set forth in a properly completed
letter of transmittal accompanying securities properly remitted to the Debtor.

      2.    Undeliverable And Unclaimed Distributions

                  a.    Holding Of Undeliverable And Unclaimed Distributions


                                       21
<PAGE>

      If any holder's distribution is returned as undeliverable, no further
distributions to such holder shall be made unless and until the Disbursing Agent
or the appropriate indenture trustee, agent, or servicer is notified of such
holder's then-current address, at which time all missed distributions shall be
made to such holder without interest. Amounts in respect of undeliverable
distributions made through the Disbursing Agent or the indenture trustee, agent,
or servicer shall be returned to Reorganized PhyCor until such distributions are
claimed.

                  b.    Failure To Claim Undeliverable Distributions

      Any holder of an Allowed Claim which does not assert a claim pursuant to
the Plan for an undeliverable or unclaimed distribution within two years after
the Consummation Date shall be deemed to have forfeited its claim for such
undeliverable or unclaimed distribution and shall be forever barred and enjoined
from asserting any such claim for an undeliverable or unclaimed distribution
against the Debtors and the Estates, Reorganized PhyCor, or their property. In
such cases, (i) all Cash in respect of such undeliverable distribution,
including interest accrued thereon, shall become the property of Reorganized
PhyCor free of any restrictions thereon, and (ii) all New Common Stock in
respect of such undeliverable distribution shall be cancelled notwithstanding
any federal or state escheat laws to the contrary. Nothing contained in the Plan
shall require any Disbursing Agent, including, but not limited to, Reorganized
PhyCor, to attempt to locate any holder of an Allowed Claim.

E.    RECORD DATE FOR DISTRIBUTIONS

      The record date for distributions to holders of Allowed General Unsecured
Claims shall be the Distribution Record Date. At the close of business on the
Distribution Record Date, the transfer ledgers for the 4.5% Convertible
Subordinated Debentures and Zero Coupon Notes shall be closed, and there shall
be no further changes in the record holders of such securities. Reorganized
PhyCor, the Indenture Trustee, and the Disbursing Agent, if any, shall have no
obligation to recognize any transfer of any such securities occurring after the
Distribution Record Date and shall be entitled instead to recognize and deal for
all purposes hereunder with only those record holders stated on the transfer
ledgers as of the close of business on the Distribution Record Date.

F.    MEANS OF CASH PAYMENT

      Payments of Cash made pursuant to the Plan shall be in U.S. dollars and
shall be made, at the option and in the sole discretion of Reorganized PhyCor,
by (i) checks drawn on or (ii) wire transfer from, a domestic bank selected by
Reorganized PhyCor.

G.    WITHHOLDING AND REPORTING REQUIREMENTS

      In connection with the Plan and all distributions thereunder, the
Disbursing Agent shall comply with all withholding and reporting requirements
imposed by any federal, state, local, or foreign taxing authority, and all
distributions hereunder shall be subject to any such withholding and reporting
requirements. The Disbursing Agent shall be authorized to take any and all
actions as may be necessary or appropriate to comply with such withholding and
reporting requirements.


                                       22
<PAGE>

H.    SETOFF

      Reorganized PhyCor may, but shall not be required to, set off against any
Claim, other than any Claim deemed Allowed under the Plan, and the payments or
other distributions to be made pursuant to the Plan in respect of such Claim,
claims of any nature whatsoever that the Debtors or Reorganized PhyCor may have
against the holder of such Claim; provided, however, that neither the failure to
do so nor the allowance of any Claim hereunder shall constitute a waiver or
release by Reorganized PhyCor of any such claim that the Debtors or Reorganized
PhyCor may have against such holder.

      The holder of a Disputed Claim who asserts a right of setoff shall retain
such right, subject to any defenses of the Debtor or Reorganized Debtor, until
the earlier of the time when (i) such Disputed Claim becomes Allowed, in whole
or in part, or (ii) such claim is expunged by entry of an order of the
Bankruptcy Court.

I.    SURRENDER OF CANCELLED DEBT INSTRUMENTS OR SECURITIES

      On or before the Distribution Date, or as soon thereafter as practicable,
each holder of an instrument evidencing a Claim on account of an Existing
Security (a "Certificate") shall surrender such Certificate to the Disbursing
Agent or, with respect to indebtedness that is governed by an indenture or other
agreement, the respective indenture trustee, agent, or servicer, as the case may
be, and such Certificate shall be cancelled. No distribution of property
hereunder shall be made to or on behalf of any such holder unless and until such
Certificate is received by the Disbursing Agent or the respective indenture
trustee, agent, or servicer, as the case may be, or the unavailability of such
Certificate is reasonably established to the satisfaction of the Disbursing
Agent or the respective indenture trustee, agent, or servicer, as the case may
be. Any such holder who fails to surrender or cause to be surrendered such
Certificate or fails to execute and deliver an affidavit of loss and indemnity
reasonably satisfactory to the Disbursing Agent or the respective indenture
trustee, agent, or servicer, as the case may be, prior to the second anniversary
of the Confirmation Date, shall be deemed to have forfeited all rights and
Claims or Interests in respect of such Certificate and shall not participate in
any distribution hereunder, and all property in respect of such forfeited
distribution, including interest accrued thereon, shall revert to Reorganized
PhyCor notwithstanding any federal or state escheat laws to the contrary.

J.    FRACTIONAL DOLLARS; DE MINIMIS DISTRIBUTIONS

      Notwithstanding any other provision of the Plan, Reorganized PhyCor shall
not be required to make distributions or payments of fractions of dollars, and
whenever any payment of a fraction of a dollar under the Plan would otherwise be
called for, the actual payment made shall reflect a rounding of such fraction to
the nearest whole dollar (up or down), with half dollars being rounded down. The
Disbursing Agent, or any indenture trustee, agent, or servicer, as the case may
be, shall not make any payment of less than $25.00 with respect to any Claim
unless a request therefor is made in writing to such Disbursing Agent, indenture
trustee, agent, or servicer, as the case may be.

K.    SERVICES OF INDENTURE TRUSTEE, AGENTS, AND SERVICERS

      The services, with respect to consummation of the Plan, of the Indenture
Trustee, agents, and servicers under indentures and other agreements that govern
the rights of holders of Claims, shall be as set forth in the Plan.


                                       23
<PAGE>

L.    INSTRUCTIONS TO DISBURSING AGENT

      Prior to any distribution on account of a 4.5% Convertible Subordinated
Debenture Claim or Zero Coupon Note Claim, as the case may be, the Indenture
Trustee, or any agent or servicer of the 4.5% Convertible Subordinated
Debentures or the Zero Coupon Notes, as the case may be, shall (i) inform the
Disbursing Agent as to the amount of the properly surrendered 4.5% Convertible
Subordinated Debentures or Zero Coupon Notes, as the case may be, and (ii)
inform the Disbursing Agent in a properly completed letter of transmittal
accompanying properly remitted securities of the names of (a) the holders of
Allowed 4.5% Convertible Subordinated Debenture Claims and (b) the holders of
Allowed Zero Coupon Note Claims.

M.    CALCULATION OF DISTRIBUTION AMOUNTS OF NEW SECURITIES

      No fractional shares of New Common Stock shall be issued or distributed
under the Plan or by Reorganized PhyCor or any Disbursing Agent, indenture
trustee, agent, or servicer. Each Person entitled to receive New Common Stock
shall receive the total number of whole shares of New Common Stock to which such
Person is entitled. Whenever any distribution to a particular Person would
otherwise call for distribution of a fraction of a share of New Common Stock,
the Disbursing Agent shall allocate separately one whole share or option, as the
case may be, to such Person and other Persons similarly entitled, in order of
the fractional portion of their entitlements, starting with the largest such
fractional portion, until all remaining whole shares or warrants have been
allocated. Upon the allocation of a whole share to a Person in respect of the
fractional portion of its entitlement, such fractional portion shall be
cancelled. If two or more Persons are entitled to equal fractional entitlements
and the number of Persons so entitled exceeds the number of whole shares or
options which remain to be allocated, the Disbursing Agent shall allocate the
remaining whole shares or options to such holders by random lot or such other
impartial method as the Disbursing Agent deems fair. Upon the allocation of all
of the whole shares or options authorized under the Plan, all remaining
fractional portions of the entitlements shall be cancelled and shall be of no
further force and effect. The Disbursing Agent, or any indenture trustee, agent,
or servicer shall not make any distribution of fewer than five shares of New
Common Stock with respect to any Claim unless a request therefor is made in
writing to such Disbursing Agent, indenture trustee, agent, or servicer, as the
case may be.

                                  ARTICLE VIII

                        TREATMENT OF EXECUTORY CONTRACTS
                              AND UNEXPIRED LEASES

A.    REJECTED CONTRACTS AND LEASES

      Except as otherwise provided in the Plan, or in any contract, instrument,
release, or other agreement or document entered into in connection with the
Plan, each of the executory contracts and unexpired leases to which any Debtor
is a party, to the extent such contracts or leases are executory contracts or
unexpired leases, shall be deemed to have been rejected by the applicable Debtor
on the Confirmation Date, unless such contract or lease (i) previously (a) shall
have been assumed or rejected by the Debtors or (b) shall have expired or
terminated pursuant to its own terms or (ii) is listed on the schedule of
assumed contracts and leases attached hereto as Exhibit C; provided, however,
that neither the inclusion by the Debtors of a contract or lease on Exhibit C
nor anything contained in this Article VIII.A shall constitute an admission by
any Debtor that such contract or lease is an


                                       24
<PAGE>

executory contract or unexpired lease or that any Debtor or its successors and
assigns has any liability thereunder. The Confirmation Order shall constitute an
order of the Bankruptcy Court approving the rejections described in this Article
VIII.A, pursuant to section 365 of the Bankruptcy Code, as of the Confirmation
Date.

B.    BAR TO REJECTION DAMAGES

      If the rejection of an executory contract or unexpired lease pursuant to
Article VIII.A above or otherwise gives rise to a Claim by the other party or
parties to such contract or lease, such Claim shall be forever barred and shall
not be enforceable against the applicable Debtor or its Estate, Reorganized
PhyCor, or their respective successors or properties unless a proof of Claim is
filed with the Clerk of the Bankruptcy Court and served on Reorganized PhyCor
and counsel for Reorganized PhyCor within 30 days after service of the earlier
of (i) notice of entry of the Confirmation Order or (ii) other notice that the
executory contract or unexpired lease has been rejected.

C.    ASSUMED CONTRACTS AND LEASES

      Except as otherwise provided in the Plan or in any contract, instrument,
release, or other agreement or document entered into in connection with the
Plan, the Debtors shall assume each of the executory contracts and unexpired
leases listed on Exhibit C hereto. The Confirmation Order shall constitute an
order of the Bankruptcy Court approving the assumptions described in this
Article VIII.C, pursuant to section 365 of the Bankruptcy Code, as of the
Confirmation Date.

D.    PAYMENTS RELATED TO ASSUMPTION OF CONTRACTS AND LEASES

      Any monetary amounts by which each executory contract and unexpired lease
to be assumed under the Plan may be in default shall be satisfied, under section
365(b)(1) of the Bankruptcy Code, by cure payments to be made on the
Distribution Date. In the event of a dispute regarding (i) the nature or amount
of any cure payments, (ii) the ability of the Debtors or any assignee of the
Debtors to provide "adequate assurance of future performance" (within the
meaning of section 365 of the Bankruptcy Code) under the contract or lease to be
assumed, or (iii) any other matter pertaining to assumption or assignment, the
Debtors or Reorganized PhyCor shall make such cure payments following the entry
of a Final Order resolving the dispute and approving the assumption and
assignment, as the case may be.

E.    CERTAIN EMPLOYMENT CONTRACTS

      PhyCor shall assume the separation agreement of Thompson S. Dent and the
employment contract of Tarpley B. Jones. Confirmation shall not constitute a
"change of control" under the employment contract of Tarpely B. Jones.

      PhyCor shall also assume all other employment contracts with its employees
existing on the Petition Date as well as certain separation agreements.


                                       25
<PAGE>

F.    COMPENSATION AND BENEFIT PLANS AND TREATMENT OF RETIREMENT PLAN

      Except and to the extent previously assumed by an order of the Bankruptcy
Court, on or before the Confirmation Date, and except as set forth below, all
employee compensation and Benefit Plans of the Debtor, including programs
subject to sections 1114 and 1129(a)(13) of the Bankruptcy Code, entered into
before or after the Petition Date and not since terminated, shall be deemed to
be, and shall be treated as if they were, executory contracts that are assumed
under Article VIII.A hereof, but only to the extent that rights under such
programs are held by the Debtors or Persons who are employees of the Debtors as
of the Confirmation Date, and the Debtors' obligations under such programs to
Persons who are employees of the Debtors on the Confirmation Date shall survive
confirmation of this Plan, except for (i) executory contracts or Benefit Plans
specifically rejected pursuant to the Plan (to the extent such rejection does
not violate sections 1114 and 1129(a)(13) of the Bankruptcy Code) and (ii) such
executory contracts or Benefit Plans as have previously been rejected, are the
subject of a motion to reject, or have been specifically waived by the
beneficiaries of any Benefit Plans or contracts.

                                   ARTICLE IX

                       PROCEDURES FOR RESOLVING DISPUTED,
                       CONTINGENT, AND UNLIQUIDATED CLAIMS

A.    OBJECTION DEADLINE; PROSECUTION OF OBJECTIONS

      As soon as practicable, but in no event later than 120 days after the
Consummation Date (unless extended by an order of the Bankruptcy Court), the
Debtors or Reorganized PhyCor, as the case may be, shall file objections to
Claims, including any Administrative Claim, Priority Tax Claim, Other Priority
Claim, Secured Claim, and General Unsecured Claim, with the Bankruptcy Court and
serve such objections upon the holders of each of the Claims to which objections
are made. Nothing contained herein, however, shall limit Reorganized PhyCor's
right to object to Claims, if any, filed or amended more than 120 days after the
Consummation Date. Reorganized PhyCor shall be authorized to, and shall, resolve
all Disputed Claims by withdrawing or settling such objections thereto, or by
litigating to judgment in the Bankruptcy Court or other court of appropriate
jurisdiction the validity, nature, and/or amount thereof.

      The foregoing shall apply to any and all Claims, other than a Claim or any
portion thereof deemed Allowed under the Plan, that are listed in the Schedules
as disputed, contingent, and/or unliquidated only if the holder of any such
Claim filed a proof of Claim on account of such Claim. The Debtors reserve their
right to seek an order expunging and disallowing any Claim that is listed in the
Schedules as disputed, contingent, and/or unliquidated, and for which no proof
of Claim was timely filed.

      Except as otherwise provided in the Plan, nothing shall affect the
Debtors' or Reorganized PhyCor's rights and defenses, both legal and equitable,
with respect to any Claims, including, but not limited to, all rights with
respect to legal and equitable defenses to setoff or recoupments against Claims.


                                       26
<PAGE>

B.    NO DISTRIBUTIONS PENDING ALLOWANCE

      Notwithstanding any other provision of the Plan, no payments or
distributions shall be made with respect to all or any portion of a Disputed
Claim unless and until all objections to such Disputed Claim have been settled
or withdrawn or have been determined by Final Order, and the Disputed Claim, or
some portion thereof, has become an Allowed Claim.

C.    DISPUTED CLAIMS RESERVE

      1. The Disbursing Agent shall withhold the Disputed Claims Reserve from
the Cash, New Common Stock, or other property to be distributed under the Plan.
As to any Disputed Claim, upon a request for estimation by the Debtors, the
Bankruptcy Court shall determine what amount is sufficient to withhold as the
Disputed Claims Reserve. The Debtors may request estimation for every Disputed
Claim that is unliquidated and the Disbursing Agent shall withhold the Disputed
Claims Reserve based upon the estimated amount of such Claim as set forth in a
Final Order. If the Debtors elect not to request such an estimation from the
Bankruptcy Court with respect to a Disputed Claim that is liquidated, the
Disbursing Agent shall withhold the Disputed Claims Reserve based upon the Face
Amount of such Claim.

      2. Neither the Disbursing Agent nor any other party shall be entitled to
vote any shares of New Common Stock held in the Disputed Claims Reserve. In the
event that any matter requires approval by the shareholders of Reorganized
PhyCor prior to the distribution or cancellation of all shares of New Common
Stock from the Disputed Claims Reserve, the shares of New Common Stock held by
the Disbursing Agent shall, for voting purposes only, be deemed not to have been
issued.

      3. If practicable, the Disbursing Agent shall invest any Cash that is
withheld as the Disputed Claims Reserve in a manner that shall yield a
reasonable net return, taking into account the safety of the investment.

D.    DISTRIBUTIONS AFTER ALLOWANCE

      The Reorganized Debtor or the Disbursing Agent, as the case may be, shall
make payments and distributions from the Disputed Claims Reserve to each holder
of a Disputed Claim that has become an Allowed Claim in accordance with the
provisions of the Plan governing the class of Claims to which such holder
belongs. On the date which is 30 days after the date that the order or judgment
of the Bankruptcy Court allowing all or part of such Claim becomes a Final
Order, the Disbursing Agent shall distribute to the holder of such Claim any
Cash, New Common Stock, or other property in the Disputed Claims Reserve as
would have been distributed on the Distribution Date had such Allowed Claim been
allowed on the Distribution Date. After a Final Order has been entered, or other
final resolution has been reached, with respect to each Disputed Claim, (i) any
New Common Stock held in the Disputed Claims Reserve shall be distributed Pro
Rata to holders of Allowed Claims entitled thereto under the terms of this Plan
and (ii) any Cash or other property remaining in the Disputed Claims Reserve
shall become property of Reorganized PhyCor. All distributions made under this
Article IX.D on account of an Allowed Claim shall be made together with any
dividends, payments, or other distributions made on account of, as well as any
obligations arising from, the distributed property, as if such Allowed Claim had
been an Allowed Claim on the Distribution Date. Notwithstanding the foregoing,
the Disbursing Agent shall not be required to make distributions under this
Article IX.D more frequently than once every 180 days.


                                       27
<PAGE>

                                    ARTICLE X

                      CONDITIONS PRECEDENT TO CONFIRMATION
                          AND CONSUMMATION OF THE PLAN

A.    CONDITIONS TO CONFIRMATION

      The following are conditions precedent to confirmation of the Plan:

      1. The Bankruptcy Court shall have entered an order approving the
Disclosure Statement with respect to the Plan as containing adequate information
within the meaning of section 1125 of the Bankruptcy Code.

      2. The Substantive Consolidation Order shall be in form and substance
reasonably acceptable to the Debtors, Warburg, Pincus, the Noteholders'
Committee, and the Creditors' Committee, and shall have been entered by the
Bankruptcy Court prior to or contemporaneously with the Confirmation Order.

B.    CONDITIONS TO CONSUMMATION DATE

      The following are conditions precedent to the occurrence of the
Consummation Date, each of which may be satisfied or waived in accordance with
Article X.C of the Plan:

      1. The Confirmation Date shall have occurred and the Confirmation Order,
in form and substance reasonably acceptable to the Debtors, Warburg, Pincus, the
Noteholders' Committee, and the Creditors' Committee, confirming the Plan, as
the same may have been modified, shall have been entered and shall, among other
things, provide that:

                  a. the Debtors and Reorganized PhyCor shall be authorized and
directed to take all actions necessary or appropriate to enter into, implement,
and consummate the instruments, releases, and other agreements or documents
created in connection with the Plan;

                  b. the provisions of the Confirmation Order shall be
nonseverable and mutually dependent;

                  c. all executory contracts or unexpired leases assumed or
assumed and assigned by the Debtors during the Chapter 11 Cases or under the
Plan shall remain in full force and effect for the benefit of Reorganized PhyCor
or its assignee(s) thereof, notwithstanding any provision in such contract or
lease (including those described in sections 365(b)(2) and (f) of the Bankruptcy
Code) that prohibits such assignment or transfer or that enables, permits, or
requires termination of such contract or lease;

                  d. the transfers of property by the Debtors (i) to Reorganized
PhyCor (a) are or will be legal, valid, and effective transfers of property, (b)
vest or will vest Reorganized PhyCor with good title to such property free and
clear of all liens, charges, Claims, encumbrances, or interests, except as
expressly provided in the Plan or Confirmation Order, (c) do not and will not
constitute avoidable transfers under the Bankruptcy Code or under applicable
bankruptcy or nonbankruptcy law, and (d) do not and will not subject Reorganized
PhyCor to any liability by reason of such transfer under the Bankruptcy Code or
under applicable nonbankruptcy law,


                                       28
<PAGE>

including, without limitation, any laws affecting successor, transferee, or
stamp or recording tax liability and (ii) to holders of Claims under the Plan
are for good consideration and value;

                  e. except as expressly provided in the Plan, the Debtors shall
be discharged effective upon the Confirmation Date from any "debt" (as that term
is defined in section 101(12) of the Bankruptcy Code), and the Debtors'
liability in respect thereof shall be extinguished completely, whether or not
reduced to judgment, liquidated or unliquidated, contingent or noncontingent,
asserted or unasserted, fixed or unfixed, matured or unmatured, disputed or
undisputed, legal or equitable, or known or unknown, or arising from any
agreement of the Debtors that has either been assumed or rejected in the Chapter
11 Cases or pursuant to the Plan, or obligation of the Debtor incurred before
the Confirmation Date, or from any conduct of the Debtors prior to the
Confirmation Date, or otherwise arising before the Confirmation Date, including,
without limitation, all interest, if any, on any such debts, whether such
interest accrued before or after the Petition Date;

                  f. the Plan does not provide for the liquidation of all or
substantially all of the property of the Debtors and its Confirmation is not
likely to be followed by the liquidation of the Reorganized PhyCor or the need
for further financial reorganization;

                  g. all Existing Securities and Interests shall be cancelled
effective upon the Consummation Date;

                  h. the New Common Stock issued under the Plan in exchange for
Claims shall be exempt from registration under the Securities Act of 1933
pursuant to section 1145 of the Bankruptcy Code, except to the extent that any
holders of New Common Stock are "underwriters," as that term is defined in
section 1145 of the Bankruptcy Code; and

                  i. the waivers, exculpations, releases, and injunctions
described in Article XIII of the Plan are approved.

      2. Reorganized PhyCor shall have access to Cash, in the form of dividends,
intercompany advances, or otherwise from its subsidiaries, in an amount
acceptable to Reorganized PhyCor, to provide it with working capital to meet
ordinary and peak requirements.

      3. All authorizations, consents, and regulatory approvals required, if
any, in connection with the consummation of the Plan shall have been obtained.

      4. The following documents and agreements, in form satisfactory to the
Debtors, shall have been executed and delivered, and all conditions precedent
thereto shall have been satisfied:

                  a. Reorganized PhyCor's Amended and Restated Charter and
By-laws; and

                  b. Management Incentive Plan.


                                       29
<PAGE>

      5. An order of the District Court authorizing the Class Action Settlement
shall have been entered and shall have become a Final Order.

      6. All other actions, documents, and agreements necessary to implement the
Plan shall have been effected or executed.

      7. The Confirmation Order shall have become a Final Order.

C.    WAIVER OF CONDITIONS

      Each of the conditions set forth in Articles X.A and X.B above, other than
those set forth in Article X.A.1, X.B.1., and X.B.2., may be waived in whole or
in part by the Debtors or Reorganized PhyCor without any notice to parties in
interest or the Bankruptcy Court and without a hearing. The failure to satisfy
or waive any condition to the Consummation Date may be asserted by the Debtors
or Reorganized PhyCor regardless of the circumstances giving rise to the failure
of such condition to be satisfied (including any action or inaction by the
Debtors or Reorganized PhyCor). The failure of the Debtors or Reorganized PhyCor
to exercise any of the foregoing rights shall not be deemed a waiver of any
other rights, and each such other right shall be deemed an ongoing right that
may be asserted at any time.

                                   ARTICLE XI

                          MODIFICATIONS AND AMENDMENTS

A.    AUTHORIZATION FOR DEBTORS TO MODIFY AND AMEND THE PLAN

      The Debtors may alter, amend, or modify the Plan or any Exhibits thereto
under section 1127(a) of the Bankruptcy Code at any time prior to the
Confirmation Date. After the Confirmation Date and prior to substantial
consummation of the Plan as defined in section 1101(2) of the Bankruptcy Code,
the Debtors may, under section 1127(b) of the Bankruptcy Code, institute
proceedings in the Bankruptcy Court to remedy any defect or omission or
reconcile any inconsistencies in the Plan, the Disclosure Statement approved
with respect to the Plan, or the Confirmation Order, and such matters as may be
necessary to carry out the purpose and effect of the Plan so long as such
proceedings do not adversely affect the treatment of holders of Claims or
Interests under the Plan; provided, however, that prior notice of such
proceedings shall be served in accordance with the Federal Rules of Bankruptcy
Procedure or order of the Bankruptcy Court.



                                       30
<PAGE>
                                   ARTICLE XII

                            RETENTION OF JURISDICTION

A.    RETENTION OF EXCLUSIVE JURISDICTION BY THE BANKRUPTCY COURT

      Under sections 105(a) and 1142 of the Bankruptcy Code, and notwithstanding
entry of the Confirmation Order and occurrence of the Consummation Date, the
Bankruptcy Court shall retain exclusive jurisdiction over all matters arising
out of, and related to, the Chapter 11 Cases and the Plan to the fullest extent
permitted by law, including, among other things, jurisdiction to:

      1. Allow, disallow, determine, liquidate, classify, estimate, or establish
the priority or secured or unsecured status of any Claim, including the
resolution of any request for payment of any Administrative Claim and the
resolution of any objections to the allowance or priority of Claims;

      2. Hear and determine all applications for compensation and reimbursement
of expenses of Professionals under the Plan or under sections 330, 331, 503(b),
1103, and 1129(a)(4) of the Bankruptcy Code; provided, however, that, from and
after the Confirmation Date the payment of the fees and expenses of the retained
and ordinary course professionals of Reorganized PhyCor shall be made in the
ordinary course of business and shall not be subject to the approval of the
Bankruptcy Court;

      3. Hear and determine all matters with respect to the assumption or
rejection of any executory contract or unexpired lease to which a Debtor is a
party or with respect to which a Debtor may be liable, including, if necessary,
the liquidation or allowance of any Claims arising therefrom;

      4. Effectuate performance of and payments under the provisions of the
Plan;

      5. Hear and determine any and all pending adversary proceedings, motions,
applications, and contested or litigated matters arising out of, under, or
related to, the Chapter 11 Cases;

      6. Enter such orders as may be necessary or appropriate to execute,
implement, or consummate the provisions of the Plan and all contracts,
instruments, releases, and other agreements or documents created in connection
with the Plan, the Disclosure Statement, or the Confirmation Order;

      7. Hear and determine disputes arising in connection with the
interpretation, implementation, consummation, or enforcement of the Plan,
including disputes arising under agreements, documents, or instruments executed
in connection with the Plan;

      8. Consider any modifications to the Plan, cure any defect or omission, or
reconcile any inconsistency in any order of the Bankruptcy Court, including,
without limitation, the Confirmation Order;

      9. Issue injunctions, enter and implement other orders, or take such other
actions as may be necessary or appropriate to restrain interference by any
entity with implementation, consummation, or enforcement of the Plan or the
Confirmation Order;


                                       31
<PAGE>

      10. Enter and implement such orders as may be necessary or appropriate if
the Confirmation Order is for any reason reversed, stayed, revoked, modified, or
vacated or distributions pursuant to the Plan are enjoined or stayed;

      11. Hear and determine any matters arising in connection with or relating
to the Plan, the Disclosure Statement, the Confirmation Order, or any contract,
instrument, release, or other agreement or document created in connection with
the Plan, the Disclosure Statement, or the Confirmation Order;

      12. Enforce all orders, judgments, injunctions, releases, exculpations,
indemnifications, and rulings entered in connection with the Chapter 11 Cases;

      13. Recover all assets of the Debtors and property of the Debtors'
Estates, wherever located;

      14. Hear and determine matters concerning state, local, and federal taxes
in accordance with sections 346, 505, and 1146 of the Bankruptcy Code;

      15. Hear and determine all disputes involving the existence, nature, or
scope of the Debtors' discharge;

      16. Hear and determine such other matters as may be provided in the
Confirmation Order or as may be authorized under provisions of the Bankruptcy
Code; and

      17. Enter final decrees closing the Chapter 11 Cases.

                                  ARTICLE XIII

                             EFFECTS OF CONFIRMATION

A.    BINDING EFFECT

      The Plan shall be binding upon and inure to the benefit of the Debtors,
all present and former holders of Claims against and Interests in the Debtors,
and their respective successors and assigns, including, but not limited to,
Reorganized PhyCor and all other parties in interest in these Chapter 11 Cases.

B.    DISCHARGE OF THE DEBTORS

      All consideration distributed under the Plan shall be in exchange for, and
in complete satisfaction, settlement, discharge, and release of, all Claims
against and Interests in the Debtors of any nature whatsoever or against any of
the Debtors' assets or properties. Except as otherwise expressly provided in the
Plan, entry of the Confirmation Order shall act as a discharge of all Claims
against, liens on, and Interests in each of the Debtors, their assets, and their
properties, arising at any time before the entry of the Confirmation Order,
regardless of whether a proof of Claim or proof of Interest therefor was filed,
whether the Claim or Interest is Allowed, or whether the holder thereof votes to
accept the Plan or is entitled to receive a distribution thereunder, subject to
the occurrence of the Distribution Date. Upon entry of the Confirmation Order,
and subject to the occurrence of the Distribution Date, any holder of such
discharged Claim or Interest shall be precluded from asserting against the
Debtor or any of its


                                       32
<PAGE>

assets or properties any other or further Claim or Interest based upon any
document, instrument, act, omission, transaction, or other activity of any kind
or nature that occurred before the date of entry of the Confirmation Order. The
Confirmation Order shall be a judicial determination of discharge of all
liabilities of the Debtor, subject to the occurrence of the Distribution Date.

C.    INJUNCTION

      In accordance with section 524 of the Bankruptcy Code, the discharge
provided by this section and section 1141 of the Bankruptcy Code shall act as an
injunction against the commencement or continuation of any action, employment of
process, or act to collect, offset, or recover the Claims and Interests
discharged hereby. Except as otherwise expressly provided in the Plan or the
Confirmation Order, all entities who have held, hold, or may hold Claims
against, or Interests in, the Debtors will be permanently enjoined, on and after
the Consummation Date, subject to the occurrence of the Distribution Date, from
(i) commencing or continuing in any manner any action or other proceeding of any
kind with respect to any such Claim or Interest, (ii) the enforcement,
attachment, collection, or recovery by any manner or means of any judgment,
award, decree, or order against the Debtors on account of any such Claim or
Interest, (iii) creating, perfecting, or enforcing any encumbrance of any kind
against the Debtors or against the property or interests in property of the
Debtors on account of any such Claim or Interest, and (iv) asserting any right
of setoff, subrogation, or recoupment of any kind against any obligation due
from the Debtors or against the property or interests in property of the Debtors
on account of any such Claim or Interest. The foregoing injunction will extend
to successors of the Debtors (including, without limitation, Reorganized PhyCor)
and their respective properties and interests in property.

D.    DEBTOR RELEASES

      Effective as of the Confirmation Date, but subject to the occurrence of
the Distribution Date, the Debtors shall release and be permanently enjoined
from any prosecution or attempted prosecution of any and all causes of action
which any of them has, may have, or may claim to have against (i) any current or
former director, officer, or employee of the Debtors, (ii) any member of the
Noteholders' Committee, (iii) any member of the Creditors' Committee, and (iv)
Warburg, Pincus and/or its general and/or limited partners, in any way relating
to the Debtors, the Chapter 11 Cases, or the Plan; provided, however, that the
foregoing shall not operate as a waiver of or release from any causes of action
arising out of (x) the rights of the Debtors or Reorganized PhyCor to enforce
the Plan and the contracts, instruments, releases, and other agreements or
documents delivered thereunder, (y) any express contractual obligation owing by
any such director, officer, or employee of the Debtors, or (z) the willful
misconduct, gross negligence, or breach of fiduciary duty of such director,
officer, or employee in connection with, related to, or arising out of the
Chapter 11 Cases, the pursuit of confirmation of the Plan, the consummation of
the Plan, the administration of the Plan, or the property to be distributed
under the Plan.

E.    OTHER RELEASES

      Effective as of the Confirmation Date, but subject to the occurrence of
the Distribution Date, and except as otherwise provided herein or in the
Confirmation Order, each of the Debtors', Reorganized PhyCor's, Noteholders'
Committee's, Creditors' Committee's, Indenture Trustee's, and Warburg, Pincus'
respective current and former members, officers, directors, agents,
subsidiaries, affiliates, general and limited partners, financial advisors,
independent accountants, attorneys, employees, and representatives and their
respective property shall be released from any and all claims, obligations,
rights, causes of action, and liabilities which the Debtors,


                                       33
<PAGE>

Reorganized PhyCor, or any holder of a Claim against or Interest in the Debtors
may be entitled to assert, whether for tort, fraud, contract, violations of
federal or state securities laws, or otherwise, whether known or unknown,
foreseen or unforeseen, existing or hereafter arising, based in whole or in part
upon any act or omission, transaction, or other occurrence taking place on or
before the Confirmation Date in any way relating to the Chapter 11 Cases or the
Plan; provided, however, that nothing in this Section E shall release any Person
from any claims, obligations, rights, causes of action, or liabilities based
upon any act or omission in connection with, relating to, or arising out of, the
Chapter 11 Cases, the solicitation of acceptances of the Plan, the pursuit of
Confirmation of the Plan, the Consummation of the Plan, the administration of
the Plan, or the property to be distributed under the Plan arising out of such
Person's gross negligence or willful misconduct.

                                   ARTICLE XIV

                           COMPROMISES AND SETTLEMENTS

A.    AUTHORIZATION FOR DEBTORS TO COMPROMISE AND SETTLE CLAIMS

      Pursuant to Fed. R. Bankr. P. 9019(a), the Debtors may compromise and
settle various Claims (a) against them and (b) that they have against other
Persons. The Debtors expressly reserve the right (with Bankruptcy Court
approval, following appropriate notice and opportunity for a hearing) to
compromise and settle Claims against them and Claims that they may have against
other Persons up to and including the Consummation Date. After the Consummation
Date, such right shall pass to Reorganized PhyCor, pursuant to Articles IV.I.
and IV.J. of the Plan.

B.    CLASS ACTION SETTLEMENT

      PhyCor, Joseph C. Hutts, Derril W. Reeves, Richard D. Wright, John K.
Crawford, and Thompson S. Dent (the "Settling Defendants") and the plaintiffs in
the various actions comprising the Shareholder Litigation Claims (the
"Litigation") other than Parul Patel (collectively, the "Class Plaintiffs") have
agreed in principle to settle their respective claims as they pertain to the
Settling Defendants as follows: (i) the Settling Defendants (through their
insurer) shall deposit the sum of $3.4 million into an interest bearing escrow
account for distribution in accordance with the order of the District Court and
(ii) the Class Plaintiffs shall dismiss with prejudice all claims pending in the
Litigation against the Settling Defendants. The settlement is subject to
approval of all of its material terms by the District Court and the expiration
of the time for appeal from such approval.



                                       34
<PAGE>
                                   ARTICLE XV

                            MISCELLANEOUS PROVISIONS

A.    BAR DATES FOR CERTAIN CLAIMS

      1.    Administrative Claims

      The Confirmation Order shall establish an Administrative Claims Bar Date
for filing Administrative Claims (except for Professional Fee Claims and the
expenses of the members of the Creditors' Committee), which date shall be 30
days after the Confirmation Date. Holders of asserted Administrative Claims,
except for Professional Fee Claims, United States Trustee fees, or the expenses
of the members of the Creditors' Committee, not paid prior to the Confirmation
Date must submit proofs of Claim on or before such Administrative Claims Bar
Date or forever be barred from doing so. The notice of Confirmation to be
delivered pursuant to Fed. R. Bankr. P. 3020(c) and 2002(f) shall set forth such
date and constitute notice of this Administrative Claims Bar Date. The Debtors,
or Reorganized PhyCor, as the case may be, shall have 30 days (or such longer
period as may be allowed by order of the Bankruptcy Court) following the
Administrative Claims Bar Date to review and object to such Administrative
Claims before a hearing for determination of allowance of such Administrative
Claims.

      2.    Professional Fee Claims; Substantial Contribution Claims

      All requests for compensation or reimbursement of Professional Fee Claims
pursuant to sections 327, 328, 330, 331, 503(b), or 1103 of the Bankruptcy Code
for services rendered to the Debtors or the Creditors' Committee, prior to the
Confirmation Date (including requests under section 503(b)(4) of the Bankruptcy
Code by any Professional or other entity for making a substantial contribution
in the Chapter 11 Cases) shall be filed and served upon Reorganized PhyCor and
counsel for Reorganized PhyCor with an application for final allowance of
compensation and reimbursement of expenses no later than 30 days after the
Confirmation Date, unless otherwise ordered by the Bankruptcy Court. Objections
to applications of such Professionals or other entities for compensation or
reimbursement of expenses must be filed and served upon Reorganized PhyCor,
counsel for Reorganized PhyCor, and the requesting Professional or other entity
no later than 15 days (or such longer period as may be allowed by order of the
Bankruptcy Court) after the date on which the applicable application for
compensation or reimbursement was served.

      3.    Other Claims

      By order dated February 7, 2002 the Bankruptcy Court entered an order (the
"Bar Date Order") setting March 5, 2002 (the "Bar Date") as the last date for
the filing of proofs of Claim against the Debtors on account of any Claim, other
than Claims deemed Allowed under the Plan, against the Debtors, which arose
prior to the Petition Date. Pursuant to the Bar Date Order and Fed. R. Bankr. P.
3003(c)(2), any entity or person who is required to file a timely proof of Claim
in the form and manner specified by the Bar Date Order and who fails to do so on
or before the Bar Date (or, in the case of a Claim based upon the Debtors'
rejection of an unexpired lease or executory contract, before the Rejection
Damages Bar Date, as defined in the Bar Date Order), shall not be entitled to
vote on the Plan and shall not receive or retain, or be entitled to receive or
retain, any property or any payment or distribution of property from the Debtors
or their successors or assigns with respect to such Claim.

B.    PAYMENT OF STATUTORY FEES

      All fees payable by the Debtors under 28 U.S.C. Section 1930, as
determined by the Bankruptcy Court at the Confirmation Hearing pursuant to
section 1128 of the Bankruptcy Code, shall be paid on or before the Consummation
Date. Any such fees arising after the Consummation Date but prior to the closing
of the Chapter 11 Cases shall be paid by Reorganized PhyCor.


                                       35
<PAGE>

C.    REVOCATION, WITHDRAWAL, OR NON-CONSUMMATION

      The Debtors reserve the right to revoke or withdraw the Plan as to any or
all of the Debtors prior to the Confirmation Date and to file subsequent plans
of reorganization. If the Debtors revoke or withdraw the Plan as to any or all
of the Debtors, or if Confirmation or Consummation as to any or all of the
Debtors does not occur, then, with respect to such Debtors, (a) the Plan shall
be null and void in all respects, (b) any settlement or compromise embodied in
the Plan (including the fixing or limiting to an amount certain any Claim or
Class of Claims), assumption or rejection of executory contracts or leases
affected by the Plan, and any document or agreement executed pursuant to the
Plan, shall be deemed null and void, and (c) nothing contained in the Plan, and
no acts taken in preparation for consummation of the Plan, shall (i) constitute
or be deemed to constitute a waiver or release of any Claims by or against, or
any Interests in, such Debtors or any other Person, (ii) prejudice in any manner
the rights of such Debtors or any other Person in any further proceedings
involving the Debtors, or (iii) constitute an admission of any sort by the
Debtors or any other Person.

D.    SEVERABILITY OF PLAN PROVISIONS

      If, prior to Confirmation, any term or provision of the Plan is held by
the Bankruptcy Court to be invalid, void, or unenforceable, the Bankruptcy
Court, at the request of the Debtors, shall have the power to alter and
interpret such term or provision to make it valid or enforceable to the maximum
extent practicable, consistent with the original purpose of the term or
provision held to be invalid, void, or unenforceable, and such term or provision
shall then be applicable as altered or interpreted. Notwithstanding any such
holding, alteration, or interpretation, the remainder of the terms and
provisions of the Plan shall remain in full force and effect and shall in no way
be affected, impaired, or invalidated by such holding, alteration, or
interpretation. The Confirmation Order shall constitute a judicial determination
and shall provide that each term and provision of the Plan, as it may have been
altered or interpreted in accordance with the foregoing, is valid and
enforceable pursuant to its terms.

E.    SUCCESSORS AND ASSIGNS

      The rights, benefits, and obligations of any entity named or referred to
in the Plan shall be binding on, and shall inure to the benefit of, any heir,
executor, administrator, successor, or assign of such entity.

F.    PLAN SUPPLEMENT

      Any and all exhibits, lists, or schedules not filed with the Plan shall be
contained in the Plan Supplement. Upon its filing with the Bankruptcy Court, the
Plan Supplement may be inspected in the office of the Clerk of the Bankruptcy
Court during normal court hours or may be viewed on the Bankruptcy Court's
website at (www.nysb.uscourts.gov). Holders of Claims or Interests may obtain a
copy of the Plan Supplement upon written request to the Debtors in accordance
with Article XV.G hereof.


                                       36
<PAGE>

G.    NOTICES

      Any notice, request, or demand required or permitted to be made or
provided to or upon the Debtors or Reorganized PhyCor hereunder shall be (i) in
writing, (ii) served by (a) certified mail, return receipt requested, (b) hand
delivery, (c) overnight delivery service, or (d) first class mail, or (e)
facsimile transmission, and (iii) deemed to have been duly given or made when
actually delivered or, in the case of notice by facsimile transmission, when
received and telephonically confirmed, addressed as follows:

      PhyCor, Inc.
      30 Burton Hills Boulevard
      Suite 400
      Nashville, Tennessee 37215
      Att'n: General Counsel
      Telephone: (615) 665-9066
      Facsimile: (615) 665-7870

      with a copy to:

      Skadden, Arps, Slate, Meagher & Flom LLP
      Four Times Square
      New York, New York 10036-6522
      Att'n: Kayalyn A. Marafioti, Esq.
      Telephone: (212) 735-3000
      Facsimile: (212) 735-2000

      -and-

      Waller Lansden Dortch & Davis
      A Professional Limited Liability Company
      Nashville City Centre
      511 Union Street, Suite 2100
      Nashville, Tennessee  37219
      Att'n: Michael R. Paslay, Esq.
      Telephone: (615) 244-6380
      Facsimile: (615) 244-6804

      -and-

      Milbank, Tweed, Hadley & Mccloy LLP
      601 South Figueroa Street
      Los Angeles, California 90017
      Att'n: Robert J. Moore, Esq.
      Att'n: Fred Neufeld, Esq.
      Telephone: (213) 892-4000
      Facsimile: (213) 629-5063


                                       37
<PAGE>

      -and-

      Willkie Farr & Gallagher
      The Equitable Center
      787 Seventh Avenue
      New York, New York 10019
      Att'n: Michael J. Kelly, Esq.
      Telephone: (212) 728-8000
      Facsimile: (212) 728-8111

H.    INDEMNIFICATION OBLIGATIONS

      Any obligations or rights of the Debtors or Reorganized PhyCor to defend,
indemnify, or limit the liability of its current and former directors, officers,
or employees pursuant to any Debtors' or Reorganized PhyCor's charter, by-laws,
policy of providing employee indemnification, applicable state law, or specific
agreement in respect of any claims, demands, suits, causes of action, or
proceedings against such directors, officers, or employees based upon any act or
omission related to such present and former directors', officers', or employees'
services with, for, or on behalf of the Debtors prior to the Consummation Date,
and any reimbursement obligations arising in respect of the foregoing, shall
survive confirmation of this Plan and remain unaffected thereby, regardless of
whether such directors, officers, or employees filed proofs of claim by the
applicable Bar Date, if any, and shall not be discharged, irrespective of
whether such defense, indemnification, reimbursement, or limitation of liability
is owed in connection with an occurrence before or after the Petition Date.

I.    TERM OF INJUNCTIONS OR STAYS

      Unless otherwise provided herein or in the Confirmation Order, all
injunctions or stays provided for in the Chapter 11 Cases under sections 105 or
362 of the Bankruptcy Code or otherwise, and extant on the Confirmation Date
(excluding any injunctions or stays contained in this Plan or the Confirmation
Order), shall remain in full force and effect until the Consummation Date.

J.    GOVERNING LAW

      Unless a rule of law or procedure is supplied by federal law (including
the Bankruptcy Code and Bankruptcy Rules), the laws of (i) the State of New York
shall govern the construction and implementation of the Plan and any agreements,
documents, and instruments executed in connection with this Plan and (ii) the
laws of the state of Tennessee shall govern corporate governance matters with
respect to the Debtors, in either case without giving effect to the principles
of conflicts of law thereof.


                                       38
<PAGE>

Dated:   New York, New York
         February 14, 2002

                                   PHYCOR, INC., et al.
                                   Debtors and Debtors-in-Possession

                                   By: /s/Tarpley B. Jones
                                      ------------------------------------------
                                   Name:  Tarpley B. Jones
                                   Title: President and Chief Executive Officer


                                   SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
                                   Attorneys for PhyCor, Inc., et al.

                                   By: /s/Kayalyn A. Marafioti
                                      ------------------------------------------
                                       Kayalyn A. Marafioti (KM 9362)
                                       (A Member Of The Firm)
                                       Thomas J. Matz (TM 5986)
                                       Mark M. Brown (MB 1716)
                                   Four Times Square
                                   New York, New York 10036-6522
                                   (212) 735-3000


                                       39