SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): Sept. 3, 1996
EVEREST & JENNINGS INTERNATIONAL LTD.
(Exact name of Registrant as specified in its charter)
Commission File Number: 0-3585
Delaware 95-2536185
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
4203 Earth City Expressway, Earth City, Missouri 63045
(Address of principal executive offices)
(314) 512-7000
(Registrant's telephone number, including area code)
Exhibit Index located on Page 3
<PAGE>
Item 5. Other Events.
On September 3, 1996 the Company announced it had signed a definitive
Agreement and Plan of Merger with Graham-Field Health Products, Inc. and
BIL (Far East Holdings) Limited, the majority stockholder of Everest &
Jennings, providing for the previously announced acquisition of Everest &
Jennings by Graham-Field. Reference is made to the Company's press
release, filed herewith as Exhibit 20.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
Exhibit No. Description
----------- -----------
20 Press release dated Sept. 3, 1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
EVEREST & JENNINGS INTERNATIONAL LTD.
(Registrant)
Date: Sept. 4, 1996 By: /s/ Timothy W. Evans
Timothy W. Evans
Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
Form 8-K dated September 3, 1996
Exhibit Sequential Page
Number Description Number/Reference
------ ----------- ----------------
20 Press release dated 4
Sept. 3, 1996.
EXHIBIT 20
FOR IMMEDIATE RELEASE
EVEREST & JENNINGS INTERNATIONAL LTD.
4203 EARTH CITY EXPRESSWAY
ST. LOUIS, MISSOURI 63045
Contact: Timothy W. Evans
Senior Vice President and Chief Financial Officer
314-512-7275
EVEREST & JENNINGS INTERNATIONAL LTD. AND
GRAHAM-FIELD HEALTH PRODUCTS INC. SIGN MERGER AGREEMENT
ST. LOUIS, MISSOURI, September 3, 1996 -- Everest & Jennings International
Ltd. (ASE-EJ) announced today that it and BIL (Far East Holdings) Limited,
the majority stockholder of Everest & Jennings, have entered into a
definitive Agreement and Plan of Merger with Graham-Field Health Products,
Inc. providing for the previously announced acquisition of Everest &
Jennings by Graham-Field. The Board of Directors of Everest & Jennings has
received a fairness opinion from Vector Securities International, Inc. to
the effect that the consideration to be received by the holders of Everest
& Jennings Common Stock pursuant to the Merger Agreement is fair to such
stockholders from a financial point of view. The terms of the acquisition
are the same as those reflected in the parties' previous announcement on
August 14, 1996.
As a result of the merger, Everest & Jennings will become a wholly-owned
subsidiary of Graham-Field. In the merger, the stockholders of Everest &
Jennings will receive one share of Graham-Field common stock for each 2.857
shares of the common stock of Everest & Jennings. The merger ratio is
subject to reduction so that the value of the Graham-Field common stock to
be received will not exceed $5.50 per share of Everest & Jennings common
stock. There are currently 7,196,565 shares of Everest & Jennings common
stock outstanding.
In connection with the merger, BIL will purchase for cash up to 1.9 million
additional shares of Graham-Field common stock, valued at the greater of
$13 per share or the average market price of the common stock of Graham-
Field for the 10 consecutive trading days prior to the merger closing date.
Graham-Field will use the proceeds to repay all debt of Everest & Jennings
in the approximate amount of $25 million to Hong Kong and Shanghai Banking
Corporation Limited. In addition, Graham-Field will issue to BIL up to $61
million of a new Series B Cumulative Convertible Preferred Stock in
exchange for the indebtedness of Everest & Jennings owing to BIL and shares
of Everest & Jennings preferred stock owned by BIL. Also as part of the
transaction, BIL will purchase for cash $10 million of a new Series C
Cumulative Convertible Preferred Stock of Graham-Field, the proceeds of
which will be available to Graham-Field for general corporate purposes.
Finally, certain indebtedness in the amount of $4 million owing by Graham-
Field to BIL will be exchanged for a $4 million unsecured subordinated
promissory note of Graham-Field which will mature on April 1, 2001 and will
bear interest at an effective rate of 7.7% per annum.
The Series B and Series C Preferred Stock to be issued by Graham-Field to
BIL will be entitled to a dividend at the rate of 1.5% per year, payable at
the option of Graham-Field either in cash or in shares of its common stock.
In addition, the shares of Graham-Field Series B and Series C Preferred
Stock will vote on an as-converted basis, as a single class together with
the Graham-Field common stock, on all matters submitted to a vote of the
stockholders of Graham-Field. The Series B Preferred Stock will not be
redeemable and will be convertible into shares of Graham-Field common stock
(x) at the option of the holder, at a conversion price of $20 per share,
(y) at the option of Graham-Field, at a conversion price equal to the then
current trading price (but not less than $15.50 or more than $20 per
share), and (z) automatically on the fifth anniversary of the date of
issuance at a conversion price of $15.50 per share, in each case subject to
certain antidilution adjustments. The Series C Preferred Stock will be
subject to redemption as a whole at Graham-Field's option on the fifth
anniversary of the date of issuance at stated value and, if not redeemed,
will automatically convert on the fifth anniversary of the date of issuance
at a conversion price of $20 per share, subject to certain antidilution
adjustments.
As a result of the merger, BIL will own shares of common and preferred
stock of Graham-Field representing approximately 34% of the voting power of
all outstanding shares of Graham-Field stock. Simultaneous with the
signing of the Merger Agreement, Graham-Field and BIL entered into a
Stockholder Agreement pursuant to which BIL has agreed to vote all of its
Everest & Jennings shares in favor of the merger. In the Stockholder
Agreement, BIL also has agreed to grant Graham-Field a right of first
refusal with respect to certain sales of its Graham-Field stock, to
indemnify Graham-Field against certain existing actions and proceedings to
which Everest & Jennings is a party and, so long as BIL owns Graham-Field
stock representing at least 5% of the voting power of the outstanding
shares, not to acquire additional shares without the consent of Graham-
Field's Board of Directors (which consent will not be unreasonably
withheld), seek to acquire ownership of Graham-Field, engage in any
solicitation of proxies with respect to Graham-Field or otherwise seek to
propose to acquire control of the Graham-Field Board of Directors.
Pursuant to the Stockholder Agreement, BIL will have the right to designate
two members of Graham-Field's Board of Directors, subject to reduction if
BIL reduces its ownership of Graham-Field stock. BIL also will have the
right to participate on a pro rata basis in certain future stock issuances
by Graham-Field. The Stockholder Agreement will automatically terminate
upon a change of control of Graham-Field or its Board of Directors. In
addition, Graham-Field has granted certain registration rights to BIL with
respect to its Graham-Field shares.
The closing of the transaction is subject to customary conditions,
including approval by the stockholders of both Graham-Field and Everest &
Jennings and the receipt of all necessary governmental and regulatory
approvals. Both companies expect to mail a joint proxy
statement/prospectus to their stockholders following Securities and
Exchange Commission clearance and to hold special stockholders meetings to
approve the transaction later this year.
Everest & Jennings is engaged in the design, manufacture and marketing of
wheelchairs and homecare beds.
