SEC Filings

AMSURG CORP filed this Form 10-12G/A on 11/03/1997
Entire Document
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stockholder received a taxable distribution, taxed as a dividend to the extent
of such stockholder's pro rata share of AHC's current and accumulated earnings
and profits. Each AHC stockholder should consult his or her own tax advisor with
respect to the specific tax consequences of the Distribution to such
stockholder, including the effect of state, local and foreign tax laws. See "THE
DISTRIBUTION -- Certain Federal Income Tax Consequences."
GOODWILL.  Effective on August 10, 1993, Section 197 of the Code was enacted to
allow goodwill and other intangible assets purchased after that date to be
amortized as a tax deduction. Previously, no tax deduction was allowed for
purchases of goodwill. On January 16, 1997, the IRS published proposed
regulations implementing Section 197 amortization of intangible assets including
goodwill. The proposed regulations contain certain "anti-churning" provisions
which deny a deduction for goodwill amortization expense in several situations,
including when the seller of the goodwill becomes a related party following the
transaction. The intent of this particular portion of the proposed regulations
is explained as preventing sellers from entering into transactions for the
purpose of converting goodwill without tax deductibility (i.e. goodwill arising
prior to the effective date of Section 197) into goodwill pursuant to Section
197 in which the sellers would then benefit from tax deductible amortization in
future periods. These proposed regulations do not specifically contain an
exception for the form of transaction that AmSurg has utilized in its
acquisitions of interests in practice-based ambulatory surgery centers and
interests in physician practices. However, because the goodwill for which AmSurg
has been claiming amortization deductions was purchased by AmSurg from unrelated
parties after the effective date of Section 197 and, as per agreement with the
sellers, the tax deduction for goodwill amortization is specifically allocated
exclusively to AmSurg, and therefore, the seller receives no tax benefit from
the amortization of the goodwill, AmSurg believes that the proposed regulations
should not be applied to deny a tax deduction to AmSurg. Together with other
taxpayers similarly affected, AmSurg will vigorously attempt to have the
proposed regulations revised in such a way as to recognize the acceptability of
the methodology utilized by AmSurg in accomplishing the purpose as stated in the
legislative record and retaining the tax deductibility of AmSurg's acquired
goodwill. However, there can be no assurance that the proposed regulations will
be amended or modified by the IRS. If the proposed regulations are adopted as
currently written, it will not be clear in these regulations that AmSurg is
entitled to the deduction for the amortization of goodwill associated with the
purchase of interests in practice-based surgery centers and physician practices
and these deductions could be subject to challenge by the IRS. Loss of these tax
deductions would have a material adverse effect on the results of operations of
AmSurg. Due to the lengthy public hearing and adoption process, AmSurg is not
able to estimate a date by which the IRS will take action on the proposed
     NO PRIOR MARKET FOR AMSURG COMMON STOCK.  There has been no prior trading
market for AmSurg Common Stock and there can be no assurance as to the prices at
which the Class A Common Stock and Class B Common Stock will trade after the
Distribution. Although it is anticipated that the Class A Common Stock and Class
B Common Stock will be traded on the Nasdaq National Market, the prices at which
Class A Common Stock and Class B Common Stock trade may fluctuate significantly.
Prices for the Class A Common Stock and Class B Common Stock may be influenced
by many factors, including the depth and liquidity of the market for such Class
A Common Stock and Class B Common Stock, investor perceptions of AmSurg and its
businesses, and general economic and market conditions.
     SHARES ELIGIBLE FOR FUTURE SALE.  AmSurg has a significant number of shares
of AmSurg Common Stock outstanding that were sold in private transactions and
not registered under the Securities Act of 1933, as amended (the "Securities
Act") upon issuance. The unregistered shares ("restricted securities") are
eligible for resale in the public market at prescribed times subject to
compliance with an exemption from the registration requirements of the
Securities Act, such as Rule 144. See "SHARES ELIGIBLE FOR FUTURE SALE." In
addition, certain AmSurg stockholders have certain registration rights with
respect to their shares of Class A Common Stock. See "DESCRIPTION OF CAPITAL
STOCK -- Registration Agreement; and  -- Stockholders' Agreement." As of
September 30, 1997, AmSurg had issued options to purchase 1,109,050 shares of
Class A Common Stock (of which 754,921 shares are vested) to employees and
non-employee directors who, after the Distribution and following the filing of a
registration statement on Form S-8 by AmSurg, will be able to exercise and
immediately sell shares underlying vested options. Of these