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.