Pre-Effective Amendment to Registration of Securities Issued in a Business-Combination Transaction — Form S-4
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-4/A Amendment No. 1 to Form S-4 124 764K
2: EX-3.1 Restated Certificate of Incorporation 44 152K
3: EX-5.1 Opinion of Fulbright & Jaworski 2 12K
4: EX-23.1 Consent of Arthur Andersen 1 5K
5: EX-25.1 Form T-1 20 69K
6: EX-99.1 Letter of Transmittal and Related Documents 19 100K
EXHIBIT 3.1
RESTATED
CERTIFICATE OF INCORPORATION
OF
DRYPERS CORPORATION
Drypers Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), does
hereby certify:
FIRST: The Corporation was originally incorporated under the name VRG
Holding Corporation.
SECOND: The original Certificate of Incorporation of the Corporation
was filed in the offices of the Secretary of State of the State of Delaware on
March 20, 1991.
THIRD: The amendments to and restatement of the Corporation's
Certificate of Incorporation set forth in the following resolution were approved
and declared advisable by the Corporation's Board of Directors, and were duly
adopted in accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware:
"RESOLVED, that the Certificate of Incorporation of the Corporation be
amended and restated in its entirety as follows:
First: The name of the Corporation is Drypers Corporation.
Second: The registered office of the Corporation in the State of Delaware
is located at 1209 Orange Street, in the City of Wilmington, County of New
Castle. The name and address of its registered agent is The Corporation Trust
Company, 1209 Orange Street, Wilmington, Delaware 19801.
Third: The nature of the business, objects and purposes to be transacted,
promoted or carried on by the Corporation are:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
Fourth: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 62,500,000 of which (i) 50,000,000
shares shall be Common Stock, $.001 par value (hereinafter called the "Common
Stock"), (ii) 1,500,000 shares shall be Nonvoting Common Stock, $.001 par value
(hereinafter called the "Nonvoting Common Stock"), (iii) 10,000,000 shares shall
be Senior Preferred Stock, par value $.01 per share (hereinafter called "Senior
Preferred Stock"), and (iv) 1,000,000 shares shall be Junior Preferred Stock,
par value $.01 per share (hereinafter called "Junior Preferred Stock") (the
Senior Preferred Stock and the Junior Preferred Stock are hereinafter sometimes
collectively referred to as the "Preferred Stock").
Effective as of the filing of this Restated Certificate of Incorporation,
each share of Common Stock issued and outstanding immediately prior to the
effective time shall be automatically changed and converted, without any action
on the part of the holder thereof, into .25 shares of Common Stock, and each
holder who upon the effectiveness of this Restated Certificate of Incorporation
would otherwise be entitled to receive a fractional share of Common Stock shall
be entitled to receive for such fractional interest, and at the effective time
of this Restated Certificate of Incorporation any such fractional interest in
shares of Common Stock of the Corporation shall be converted into the right to
receive, an amount in cash equal to the initial public offering price of shares
of Common Stock in the Corporation's initial public offering times such
fractional interest.
A statement of the powers, designations, preferences and relative rights
and the qualifications, limitations and restrictions of the Common Stock, the
Nonvoting Common Stock and the Preferred Stock is as follows:
A. Preferred Stock
(1) Shares of Preferred Stock may be issued from time to time in one
or more series, each such series to have distinctive serial designations, as
shall hereafter be determined in the resolution or resolutions providing for the
issue of such Preferred Stock from time to time adopted by the Board of
Directors pursuant to authority so to do which is hereby vested in the Board of
Directors.
(2) Each series of Preferred Stock
(a) may have such number of shares;
(b) may have such voting powers, full or limited, or may be
without voting powers;
(c) may be subject to redemption at such time or times and at
such prices;
(d) may be entitled to receive dividends (which may be
cumulative or noncumulative), at such rate or rates, on such conditions,
from such date or dates, and at such times, and payable in preference to,
or in such relation to, the dividends payable on any other class or classes
or series of stock;
(e) may have such rights upon the dissolution of, or upon any
distribution of the assets of, the Corporation;
(f) may be made convertible into, or exchangeable for, shares of
any other class or classes or of any other series of the same or any other
class or classes of stock of the Corporation at such price or prices or at
such rates of exchange, and with such adjustments;
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(g) may be entitled to the benefit of a sinking fund or purchase
fund to be applied to the purchase or redemption of shares of such series
in such amount or amounts;
(h) may be entitled to the benefit of conditions and
restrictions upon the creation of indebtedness of the Corporation or any
subsidiary, upon the issue of any additional stock (including additional
shares of such series or of any other shares) and upon the payment of
dividends or the making of other distributions on and the purchase
redemption or other acquisition by the Corporation or any subsidiary of any
outstanding stock of the Corporation; and
(i) may have such other relative, participating, optional or
other special rights and qualifications, limitations or restrictions
thereof; all as shall be stated in said resolution or resolutions providing
for the issue of such Preferred Stock. Except where otherwise set forth in
the resolution or resolutions adopted by the Board of Directors providing
for the issue of any series of Preferred Stock, the number of shares
comprising such series may be increased or decreased (but not below the
number of shares then outstanding) from time to time by like action of the
Board of Directors.
(3) Shares of any series of Preferred Stock which have been redeemed
(whether through the operation of a sinking fund or otherwise) or purchased by
the Corporation, or which, if convertible or exchangeable, have been converted
into or exchanged for shares of stock of any other class or classes shall have
the status of authorized and unissued shares of Preferred Stock and may be
reissued as a part of the series of which they were originally a part or may be
reclassified and reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors or as part of any
other series of Preferred Stock, all subject to the conditions or restrictions
on issuance set forth in the resolution or resolutions adopted by the Board of
Directors providing for the issue of any series of Preferred Stock and to any
filing required by law.
B. Common Stock and Nonvoting Common Stock
Except as otherwise provided herein, all shares of Common Stock and
Nonvoting Common Stock will be identical and will entitle the holders thereof to
the same rights and privileges.
(1) Voting Rights. The holders of Common Stock will be entitled to
one vote per share on all matters to be voted on by the Corporation's
stockholders, and except as otherwise required by law, the holders of Nonvoting
Common Stock will have no right to vote their shares of Nonvoting Common Stock
on any matters to be voted on by the Corporation's stockholders.
(2) Dividends. When and as dividends are declared thereon, whether
payable in cash, property or securities of the Corporation, the holders of
Common Stock
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and the holders of Nonvoting Common Stock will be entitled to share, ratably
according to the number of shares of Common Stock or Nonvoting Common Stock held
by them, in such dividends; provided, that if dividends are declared which are
payable in shares of Common Stock or Nonvoting Common Stock, dividends will be
declared which are payable at the same rate on Common Stock and Nonvoting Common
Stock, and the dividends payable in shares of Common Stock will be payable to
holders of Common Stock, and the dividends payable in shares of Nonvoting Common
Stock will be payable to the holders of Nonvoting Common Stock.
(3) Liquidation Rights. In the event of any liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, after
payment shall have made to the holders of any Preferred Stock pursuant to
Section A of this Article Fourth, the holders of Common Stock and Nonvoting
Common Stock shall be entitled, to the exclusion of the holders of Preferred
Stock, to share, ratably according to the number of shares of Common Stock or
Nonvoting Common Stock held by them, in the remaining assets of the Corporation
available for distribution to its stockholders.
(4) Conversion of Nonvoting Common Stock.
(a) At any time and from time to time, each record holder of
Nonvoting Common Stock will be entitled to convert any and all of the
shares of such holder's Nonvoting Common Stock into the same number of
shares of Common Stock at such holder's election; provided, that each
holder of Nonvoting Common Stock shall only be entitled to convert any
share or shares of Nonvoting Common Stock to the extent that after giving
effect to such conversion such holder or its affiliates shall not directly
or indirectly own, control or have power to vote a greater quantity of
securities of any kind issued by the Corporation than such holder and its
affiliates are permitted to own, control or have power to vote under any
law or under any regulation, rule or other requirement of any governmental
authority at any time applicable to such holder and its affiliates.
(b) Each conversion of shares of Nonvoting Common Stock into
shares of Common Stock will be effected by the surrender of the certificate
or certificates representing the shares to be converted at the principal
office of the Corporation (or such other office or agency of the
Corporation as the Corporation may designate by notice in writing to the
holder or holders of the Nonvoting Common Stock) at any time during normal
business hours, together with a written notice by the holder of such
Nonvoting Common Stock stating that such holder desires to convert the
shares, or a stated number of the shares, of Nonvoting Common Stock
represented by such certificate or certificates into Common Stock and that
upon such conversion such holder and its affiliates will not directly or
indirectly own, control or have the power to vote a greater quantity of
securities of any kind issued by the Corporation than such holders and its
affiliates are permitted to own, control or have the power to vote under
any applicable law, regulation, rule or other governmental requirement (and
such
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statement will obligate the Corporation to issue such Common Stock). Such
conversion will be deemed to have been effected as of the close of business
on the date on which such certificate or certificates have been surrendered
and such notice has been received, and at such time the rights of the
holder of the converted Nonvoting Common Stock as such holder will cease
and the person or person in whose name or names the certificate or
certificates for shares of Common Stock are to be issued upon such
conversion will be deemed to have become the holder or holders of record of
the shares of Common Stock represented thereby.
(c) Promptly after such surrender and the receipt of such written
notice, the Corporation will issue and deliver in accordance with the
surrendering holder's instructions (i) the certificate or certificates for
the Common Stock issuable upon such conversion and (ii) a certificate
representing any Nonvoting Common Stock which was represented by the
certificate or certificates delivered to the Corporation in connection with
such conversion but which was not converted.
(d) If the Corporation in any manner subdivides or combines the
outstanding shares of one class of either Common Stock or Nonvoting Common
Stock, the outstanding shares of the other class will be proportionately
subdivided or combined.
(e) In the case of, and as a condition to, any capital
reorganization of, or any reclassification of the capital stock of, the
Corporation (other than a subdivision or combination of shares of Common
Stock or Nonvoting Common Stock into a greater or lesser number of shares
(whether with or without par value) or a change in the par value of Common
Stock or Nonvoting Common Stock or from par value to no par value, or from
no par value to par value) or in the case of, and as condition to, the
consolidation or merger of the Corporation with or into another corporation
(other than a merger in which the Corporation is the continuing corporation
and which does not result in any reclassification of outstanding shares of
Common Stock or Nonvoting Common Stock), each share of Nonvoting Common
Stock shall be convertible into the number of shares of stock or other
securities or property receivable upon such reorganization,
reclassification, consolidation or merger by a holder of the number of
shares of Common Stock of the Corporation into which such share of
Nonvoting Common Stock was convertible immediately prior to such
reorganization, reclassification, consolidation or merger; and, in any such
case, appropriate adjustment shall be made in the application of the
provisions set forth in this paragraph 4 with respect to the rights and
interests thereafter of the holder of Nonvoting Common Stock to the end
that the provisions set forth in this paragraph 4 (including provisions
with respect to the conversion rate) shall thereafter be applicable, as
nearly as they reasonably may be, in relation to any shares of stock or
other securities or property thereafter deliverable upon the conversion of
the shares of Nonvoting Common Stock.
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(f) Shares of Nonvoting Common Stock which are converted into
shares of Common Stock as provided herein shall not be reissued.
(g) The Corporation will at all times reserve and keep available
out of its authorized but unissued shares of Common Stock or its treasury
shares, solely for the purpose of issue upon the conversion of the
Nonvoting Common Stock as provided in this paragraph 4, such number of
share of Common Stock as shall then be issuable upon the conversion of all
then outstanding shares of Nonvoting Common Stock (assuming that all such
shares of Nonvoting Common Stock are held by persons entitled to convert
such shares into Common Stock).
(h) The issuance of certificates for Common Stock upon the
conversion of Nonvoting Common Stock will be made without charge to the
holders of such shares for any issuance tax in respect thereof or other
cost incurred by the Corporation in connection with such conversion and the
related issuance of Common Stock. The Corporation will not close its books
against the transfer of Nonvoting Common Stock or of Common Stock issued or
issuable upon the conversion of Nonvoting Common Stock in any manner which
would interfere with the timely conversion of Nonvoting Common Stock.
C. General Provisions
(1) No stockholder shall be entitled as a matter of right to
subscribe for or receive additional shares of any class of stock of the
Corporation, whether now or hereafter authorized, or any bonds, debentures or
other securities convertible into stock, but such additional shares of stock or
other securities convertible into stock may be issued or disposed of by the
Board of Directors to such persons and on such terms as in its discretion it
shall deem advisable.
(2) No action required or permitted to be taken at any annual or
special meeting of stockholders of the Corporation may be taken without such
meeting; and the right of stockholders of the Corporation to take such action by
a consent in writing is denied.
(3) No stockholder of the Corporation shall have the right of
cumulative voting at any election of directors or upon any other matter.
Fifth: The Corporation is to have perpetual existence.
Sixth: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:
(1) To make, alter or repeal the by-laws of the Corporation.
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(2) To authorize and cause to be executed mortgages and liens upon
the real and personal property of the Corporation.
(3) To set apart out of any of the funds of the Corporation available
for dividends a reserve or reserves for any proper purpose and to abolish
any such reserve in the manner in which it was created.
(4) By a majority of the whole Board of Directors, to designate one
or more committees, each committee to consist of two or more of the
directors of the Corporation. The Board of Directors may designate one or
more directors and as alternate members of any committee, who may replace
any absent or disqualified member or any meeting of the committee. Any
such committee, to the extent provided in the resolution or in the by-laws
of the Corporation, shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the Corporation
and may authorize the seal of the Corporation to be affixed to all papers
which may require it; provided, however, the by-laws may provide that in
the absence or disqualification of any member of such committee or
committees the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at
the meeting in the place of any such absent or disqualified member.
(5) Except as otherwise specified in any contract between the
Corporation and one or more of its stockholders, when and as authorized by
the affirmative vote of the holders of a majority of the stock issued and
outstanding having voting power given at a stockholders' meeting duly
called upon such notice as is required by statute, to sell, lease or
exchange all or substantially all the property and assets of the
Corporation, including its goodwill and its corporate franchises, upon such
terms and conditions and for such consideration, which may consist in whole
or in part of money or property including securities of any other
corporation or corporations, as the Board of Directors shall deem expedient
and for the best interest of the Corporation.
Seventh: Meetings of stockholders may be held within or without the State
of Delaware, as the by-laws of the Corporation shall so provide.
Eighth: A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, as the same exists or hereafter may be amended or (iv) for any transaction
from which the director derived an improper personal benefit. If the Delaware
General Corporation Law hereafter is amended to authorize the further
elimination or limitation of the liability of directors, then the liability of a
director of the Corporation, in addition to the limitation on personal
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liability provided herein, shall be limited to the fullest extent permitted by
the amended Delaware General Corporation Law. Any repeal or modification of
this paragraph by the stockholders of the Corporation shall be prospective only,
and shall not adversely affect any limitation on the personal liability of a
director of the Corporation existing at the time of such repeal or modification.
Ninth: The Corporation may indemnify any person who was, is, or is
threatened to be made a party to a proceeding (as hereinafter defined) by reason
of the fact that he (i) is or was a director or officer of the Corporation or
(ii) while a director or officer of the Corporation, is or was serving at the
request of the Corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent or similar functionary of another foreign
or domestic corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan, or other enterprise, to the fullest extent permitted
under the Delaware General Corporation Law, as the same exists or may hereafter
be amended.
The Corporation may additionally indemnify any employee or agent of the
Corporation to the fullest extent permitted by law.
As used herein, the term "proceeding" means any threatened, pending, or
completed action, suit or proceeding, whether civil, criminal, administrative,
arbitrative, or investigative, any appeal in such an action, suit or proceeding,
and any inquiry or investigation that could lead to such an action, suit or
proceeding.
Tenth: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, subject to
any express provisions or restriction contained in this Certificate of
Incorporation or in the by-laws of the Corporation, in any manner now or
hereafter provided by law, and all rights and powers at any time conferred upon
the directors or stockholders of the Corporation by this Certificate of
Incorporation or any amendment hereto are subject to such right of the
Corporation.
Eleventh: A. The number of directors of the Corporation shall be fixed
from time to time by resolution of the Board of Directors of the Corporation
adopted by the affirmative vote of not less than 80% of the number of directors
of the Corporation in office at that time; provided that;
(i) the number of directors of the Corporation shall be not less
than six,
(ii) the number of directors of the Corporation shall be six
unless and until such number shall be increased by resolution of the
Board of Directors of the Corporation adopted by the affirmative vote
of not less than 80% of the number of directors of the Corporation
then in office, and
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(iii) the number of directors of the Corporation shall not be
decreased in the effect of that decrease would be to shorten the term
of any director of the Corporation at the time in office.
B. Commencing with the first annual meeting of the stockholders
following the filing of this Restated Certificate of Incorporation, the
directors of the corporation shall be divided into three classes, each class to
be initially composed of two persons, and upon any change in the size of the
Board of Directors, each class to be as nearly equal in number as possible. All
three classes of directors of the Corporation shall be elected at the first
annual meeting of stockholders of the Corporation following the filing of this
Restated Certificate of Incorporation. The initial term of office of directors
of the first class who are elected at the first annual meeting of stockholders
of the Corporation following the filing of this Restated Certificate of
Incorporation shall expire at the next annual meeting of stockholders of the
Corporation; the initial term of office of directors of the second class who are
elected at the first annual meeting of the stockholders of the Corporation
following the filing of this Restated Certificate of Incorporation shall expire
at the third annual meeting of stockholders of the Corporation following the
filing of this Restated Certificate of Incorporation; and the initial term of
office of directors of the third class who are elected at the first annual
meeting of the stockholders of the Corporation following the filing of this
Restated Certificate of Incorporation shall expire at the fourth annual meeting
of stockholders of the Corporation following the filing of this Restated
Certificate of Incorporation.
At each annual meeting of stockholders of the Corporation, the number of
directors equal to the number of the class the term of which expires at the time
of such meeting shall be elected to hold office for a term expiring a the third
annual meeting of stockholders of the corporation after their election.
C. A director of the Corporation may not be removed from office
unless such removal is for cause and the holders of a majority of the shares of
stock of the Corporation entitled to vote for the election of such a director
shall have voted in favor of such removal at a meeting of stockholders of the
Corporation expressly called for that purpose.
For purposes of this Article Eleventh, "Cause" shall mean if the director
is willfully and persistently guilty of any significant misconduct or neglect in
the discharge of his duties hereunder, provided that notice thereof has been
given to the director, or if the director is convicted of or pleads guilty or
nolo contendere to any felony criminal offense or any civil offense involving
fraud or moral turpitude, other than an offense that in the opinion of the other
members of the Board of Directors does not affect the director's position as a
director.
Twelfth: A. This Certificate of Incorporation shall not be amended,
other than for the issuance of Preferred Stock pursuant to Article Fourth,
unless, in addition to any other requirement therefor imposed by law, the
holders of not less than two-
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thirds of the shares of stock of the Corporation entitled to vote thereon shall
have voted in favor of the proposed amendment.
B. The Corporation shall not be merged into or consolidated with any
other corporation, nor shall any other corporation be merged into the
Corporation, unless, in addition to any other requirement therefor imposed by
law, the holders of not less than two-thirds of the shares of stock of the
Corporation entitled to vote thereon shall have voted in favor of the proposed
merger or consolidation.
C. The Corporation shall not be dissolved unless, in addition to any
other requirement therefor imposed by law, the holders of not less than two-
thirds of the shares of stock of the Corporation entitled to vote thereon shall
have voted in favor of the proposed dissolution.
D. The vote referred to in the foregoing provisions of this Article
Twelfth shall be in addition to the vote of the holders of shares of any class
of stock of the Corporation otherwise required by this Certificate of
Incorporation, the resolution or resolutions of the Board of Directors of the
Corporation providing for the issuance of shares of Preferred Stock of the
Corporation of a particular series, or any agreement between the Corporation and
any national securities exchange.
E. The provisions of Paragraph B of this Article Twelfth shall not apply
to the merger of any other corporation into the Corporation if the General
Corporation Law of the State of Delaware does not require a vote of the holders
of shares of stock of the Corporation as a condition to that merger.
Thirteenth: A. Except as set forth in Paragraph D of this Article
Thirteenth, the affirmative vote of the holders of at least 80% of the
outstanding shares of all stock of the Corporation, considered for the purposes
of this Article Thirteenth as one class and hereinafter in this Article
Thirteenth embraced in the term "voting stock", shall be required for:
(i) a merger of the Corporation into, or a consolidation of the
Corporation with, any other corporation, or a merger of any other
corporation into the Corporation, or
(ii) any sale or lease of all or substantially all of the assets of
the Corporation to any other corporation, person or other entity, or
(iii) any sale or lease to the Corporation or any subsidiary thereof
of any assets (except assets having an aggregate fair market value of less
than $1,000,000) in exchange for voting stock (or securities convertible
into or exchangeable for voting stock or options, warrants or rights to
purchase voting stock or securities convertible into boting stock) of the
Corporation or any subsidiary of the Corporation by any other corporation,
person or entity,
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if, as of the record date for the determination of stockholders entitled to
notice thereof and to vote thereon, or as of the time the Board of Directors of
the Corporation shall have approved a memorandum of understanding, or the
Corporation shall have entered into any agreement, with respect to any such
transaction for which the vote of the holders of no class of stock of the
Corporation is otherwise required by law, this Certificate of Incorporation of
any other contract or agreement, such other corporation, person or entity which
is a party to such a transaction is the beneficial owner, directly or
indirectly, of 5% or more of the outstanding shares of the voting stock.
B. Solely for the purpose of determining whether such other
corporation, person or entity which is a party to such a transaction is the
beneficial owner of 5% or more of the outstanding shares of voting stock, that
corporation, person or other entity shall be deemed to be the beneficial owner
of any shares of voting stock:
(i) which it owns directly, whether or not of record, or
(ii) which it has the right to acquire pursuant to any agreement or
understanding or upon exercise of conversion rights, exchange rights,
warrants or options or otherwise, or
(iii) which are beneficially owned, directly or indirectly (including
shares deemed to be owned through application of clause (ii) above), by any
"affiliate" or associate: of such corporation, person or other entity, as
those terms are defined in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934 as in effect on December 10, 1976
or
(iv) which are beneficially owned, directly or indirectly (including
shares deemed to be owned through application of clause (ii) above), by any
other corporation, person or entity with which it or its "affiliate" or
"associate" has any agreement or understanding for the purpose of
acquiring, holding, voting or disposing of voting stock.
Solely for the purpose of determining whether such other corporation,
person or entity which is a party to such a transaction is the beneficial owner
of 5% or more of the outstanding shares of voting stock, the outstanding shares
of voting stock shall be deemed to include shares deemed to be beneficially
owned by such other corporation, person or entity through the application or the
provisions of the immediately preceding paragraph.
As used in this Article Thirteenth, the term "subsidiary" shall mean a
corporation a majority of the voting power of the capital stock (that is, voting
power entitled to be exercised in the election of directors, but excluding
voting power entitled so to be exercised only upon the happening of some
contingency unless such contingency shall have occurred and is continuing) of
which shall be owned by the
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Corporation or by one or more subsidiaries or by the corporation and one or more
subsidiaries.
C. The Board of Directors of the Corporation shall have the power
and duty to determine for the purposes of this Article Thirteenth, on the basis
of information known to this Corporation, whether:
(i) such other corporation, person or other entity beneficially owns
5% or more of the outstanding shares of voting stock,
(ii) a corporation, person or entity is an "affiliate" or "associate"
(as defined in Paragraph B above) of another,
(iii) the assets being acquired by the corporation, or any subsidiary
thereof, have an aggregate fair market value of less than $1,000,000, and
(iv) the memorandum of understanding referred to in Paragraph D below
is substantially consistent with the transaction covered thereby.
Any such determination shall be conclusive and binding for all purposes of this
Article Thirteenth.
D. The provisions of Paragraph A of this Article Thirteenth shall
not apply to:
(i) any merger of the Corporation into, or any consolidation of the
Corporation with, any other corporation, any merger of any other
corporation into the Corporation, any sale or lease to the Corporation or
any subsidiary of any assets of any other corporation, person or entity, or
any sale or lease by the Corporation or any subsidiary of any of its assets
to any other corporation, person or entity if, in any such case, the Board
of Directors of the Corporation has approved a memorandum of understanding
with such other corporation, person or entity with respect to such merger
consolidation, sale or lease prior to the time that such other corporation,
person or entity shall have become a beneficial owner of 5% or more of the
outstanding shares of voting stock; or
(ii) any merger of the Corporation into, any consolidation of the
Corporation with, any merger into the Corporation of, any sale or lease to
the Corporation or any subsidiary of any assets of, or any sale or lease by
the Corporation or any subsidiary of any of its assets to, any corporation
not less than 50% of the outstanding stock of which is beneficially owned,
directly or indirectly, by the Corporation.
E. Notwithstanding any other provision of this Certificate of
Incorporation or of the by-laws of the Corporation, this Article Thirteenth
shall not be amended, altered, changed or repealed, directly or indirectly,
unless, in addition to any
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other requirement therefor imposed by law, the holders of not less than 80% of
the outstanding shares of voting stock of the Corporation shall have voted in
favor of such amendment, alteration, change or repeal.
F. The vote referred to in the foregoing provisions of this Article
Thirteenth shall be in addition to the vote of the holders of shares of any
class of stock of the Corporation otherwise required by this Certificate of
Incorporation, the resolution or resolutions of the Board of Directors of the
Corporation providing for the issuance of shares of Preferred Stock of the
Corporation of a particular series, or any agreement between the Corporation and
any national securities exchange.
Fourteenth: A. All of the powers of the Corporation, insofar as the same
may be lawfully vested by this Certificate of Incorporation in the Board of
Directors of the Corporation, are hereby conferred upon the Board of Directors
of the Corporation.
B. In furtherance and not in limitation of the foregoing provisions of
this Article Fourteenth, and for the purpose of the orderly management of the
business and the conduct of the affairs of the Corporation, the Board of
Directors of the Corporation shall have the power to adopt, amend or repeal from
time to time by-laws of the Corporation, subject to the right of the
stockholders of the Corporation entitled to vote thereon to adopt, amend or
repeal by-laws of the Corporation; provided that by-laws of the Corporation
shall not be adopted, amended or repealed by the stockholders of the Corporation
unless the holders of not less than 80% of the shares of stock of the
Corporation entitled to vote thereon shall have voted in favor of such adoption,
amendment or repeal at a meeting of stockholders of the Corporation expressly
called for that purpose.
C. No action required or permitted to be taken at any annual or special
meeting of stockholders of the Corporation may be taken without such a meeting;
and the right of stockholders of the Corporation to take any such action by a
consent in writing is denied.
D. Notwithstanding any other provision of this Certificate of
Incorporation or of the by-laws of the Corporation, this Article Fourteenth
shall not be amended, altered, changed or repealed, directly or indirectly,
unless, in addition to any other requirement therefor imposed by law, the
holders of not less than 80% of the shares of stock of the Corporation entitled
to vote thereon shall have voted in favor of such amendment, alteration, change
or repeal.
E. The vote referred to in the foregoing provisions of this Article
Fourteenth shall be in addition to the vote of the holders of shares of any
class of stock of the Corporation otherwise required by this Certificate of
Incorporation, the resolution or resolutions of the Board of Directors of the
Corporation providing for the issuance of shares of Preferred Stock of the
Corporation of a particular series, or any agreement between the Corporation and
any national securities exchange.
13
FOURTH: That after the Board of Directors' adoption of the foregoing
resolution, said amendments and restatement were proposed to the stockholders of
the Corporation for their approval, and said stockholders duly consented in
favor of said amendments and restatement.
FIFTH: That said amendments and restatement were duly adopted in
accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware.
SIXTH: That this Restated Certificate of Incorporation shall be effective
upon the filing hereof.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation, which
restates and integrates and further amends the provisions of the Restated
Certificate of Incorporation of this Corporation, having been duly adopted by
the Board of Directors and stockholders of this Corporation in accordance with
Sections 242 and 245 of the Delaware General Corporation Law, has been duly
executed by Walter V. Klemp, its Managing Director, and attested by Terry A.
Tognietti, its Secretary, this 24th day of January, 1994.
DRYPERS CORPORATION
By /s/ Walter V. Klemp
----------------------------
Walter V. Klemp
Managing Director
(duly authorized to act in the
capacity of President)
ATTEST:
By /s/ Terry A. Tognietti
-----------------------------------------
Terry A. Tognietti
Secretary
14
CERTIFICATE OF CORRECTION
Drypers Corporation, a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), does hereby certify:
FIRST: The name of the Corporation is Drypers Corporation.
SECOND: A Restated Certificate of Incorporation of the Corporation
(the "Restated Certificate") was filed with the Secretary of State of the State
of Delaware on January 25, 1994. The Restated Certificate requires correction
as permitted by Section 103(f) of the General Corporation Law of the State of
Delaware because the Restated Certificate is an inaccurate record of the
corporate action referred to therein.
THIRD: The Restated Certificate is an inaccurate record of the
corporate action referred to therein in that the Restated Certificate
incorrectly sets forth the minimum number of directors and contains certain
typographical errors.
FOURTH: The second paragraph of Article Fourth of the amended and
restated Certificate of Incorporation of the Corporation, set forth in Article
Third of the Restated Certificate, is corrected to read in its entirety as
follows:
"Effective as of the filing of this Restated Certificate of
Incorporation, each share of Common Stock issued and outstanding
immediately prior to the effective time shall be automatically changed and
converted, without any action on the part of the holder thereof, into .25
shares of Common Stock, and each holder who upon the effectiveness of this
Restated Certificate of Incorporation would otherwise be entitled to
receive a fractional share of Common Stock shall be entitled to receive for
such fractional interest, and at the effective time of this Restated
Certificate of Incorporation any such fractional interest in shares of
Common Stock of the Corporation shall be converted into the right to
receive, an amount in cash equal to the initial public offering price of
shares of Common Stock in the Corporation's initial public offering times
such fractional interest or if the Corporation's initial public offering
does not occur, an amount to be determined by the Board of Directors times
such fractional interest."
FIFTH: Paragraph (g) of Section B.(4) of Article Fourth of the amended and
restated Certificate of Incorporation of the Corporation, set forth in Article
Third of the Restated Certificate, is corrected to read in its entirety as
follows:
"(g) The Corporation will at all times reserve and keep available out
of its authorized but unissued shares of Common Stock or its treasury
shares, solely for the purpose of issue upon the conversion of the
Nonvoting Common Stock as provided in this paragraph 4, such number of
shares of Common Stock as shall then be issuable upon the conversion of all
then outstanding shares of Nonvoting Common Stock (assuming
that all such shares of Nonvoting Common Stock are held by persons entitled
to convert such shares into Common Stock)."
SIXTH: Paragraph (2) of Section C. of Article Fourth of the amended and
restated Certificate of Incorporation of the Corporation, set forth in Article
Third of the Restated Certificate, has been deleted and paragraph (3) of such
section has been renumbered as paragraph (2).
SEVENTH: Paragraph (1) of Article Sixth of the amended and restated
Certificate of Incorporation of the Corporation, set forth in Article Third of
the Restated Certificate, has been deleted and the remaining paragraphs of
Article Sixth have been renumbered. Paragraph (3) of Article Sixth of the
amended and restated Certificate of Incorporation of the Corporation, is
corrected to read in its entirety as follows:
"(3) By a majority of the whole Board of Directors, to designate one
or more committees, each committee to consist of two or more of the
directors of the Corporation. The Board of Directors may designate one or
more directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee. Any such
committee, to the extent provided in the resolution or in the by-laws of
the Corporation, shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the Corporation
and may authorize the seal of the Corporation to be affixed to all papers
which may require it; provided, however, the by-laws may provide that in
the absence or disqualification of any member of such committee or
committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at
the meeting in the place of any such absent or disqualified member."
EIGHTH: Section A. of Article Eleventh of the amended and restated
Certificate of Incorporation of the Corporation, set forth in Article Third of
the Restated Certificate, is corrected to read in its entirety as follows:
"Eleventh: A. The number of directors of the Corporation shall be
fixed from time to time by resolution of the Board of Directors of the
Corporation adopted by the affirmative vote of not less than 80% of the
number of directors of the Corporation in office at that time; provided
that;
(i) the number of directors of the Corporation shall be not less
than five,
(ii) the number of directors of the Corporation shall be six
unless and until such number shall be increased by resolution of the
Board of Directors of the Corporation adopted by the affirmative vote
of not less than 80% of the number of directors of the Corporation
then in office, and
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(iii) the number of directors of the Corporation shall not be
decreased if the effect of that decrease would be to shorten the term
of any director of the Corporation at the time in office."
NINTH: The second paragraph of Section B. of Article Eleventh of the
amended and restated Certificate of Incorporation of the Corporation, set forth
in Article Third of the Restated Certificate, is corrected to read in its
entirety as follows:
"At each annual meeting of stockholders of the Corporation, the number
of directors equal to the number of the class the term of which expires at
the time of such meeting shall be elected to hold office for a term
expiring on the third annual meeting of stockholders of the corporation
after their election."
TENTH: Clause (iii) of Section A. of Article Thirteenth of the amended and
restated Certificate of Incorporation of the Corporation, set forth in Article
Third of the Restated Certificate, is corrected to read in its entirety as
follows:
"(iii) any sale or lease to the Corporation or any subsidiary
thereof of any assets (except assets having an aggregate fair market
value of less than $1,000,000) in exchange for voting stock (or
securities convertible into or exchangeable for voting stock or
options, warrants or rights to purchase voting stock or securities
convertible into voting stock) of the Corporation or any subsidiary of
the Corporation by any other corporation, person or entity,"
ELEVENTH: The first sentence of Section B. of Article Thirteenth of the
amended and restated Certificate of Incorporation of the Corporation, set forth
in Article Third of the Restated Certificate, is corrected to read in its
entirety as follows:
"B. Solely for the purpose of determining whether such other
corporation, person or entity that is a party to such a transaction is the
beneficial owner of 5% or more of the outstanding shares of voting stock,
that corporation, person or other entity shall be deemed to be the
beneficial owner of any shares of voting stock:
(i) which it owns directly, whether or not of record, or
(ii) which it has the right to acquire pursuant to any agreement
or understanding or upon exercise of conversion rights, exchange
rights, warrants or options or otherwise, or
(iii) which are beneficially owned, directly or indirectly
(including shares deemed to be owned through application of clause
(ii) above), by any "affiliate" or "associate" of such corporation,
person or other entity, as those terms are defined in Rule 12b-2 of
the General Rules and Regulations under the Securities Exchange Act of
1934, or
-3-
(iv) which are beneficially owned, directly or indirectly
(including shares deemed to be owned through application of clause
(ii) above), by any other corporation, person or entity with which it
or its "affiliate" or "associate" has any agreement or understanding
for the purpose of acquiring, holding, voting or disposing of voting
stock."
TWELFTH: The last paragraph of Section B. of Article Thirteenth of the
amended and restated Certificate of Incorporation of the Corporation, set forth
in Article Third of the Restated Certificate, is corrected to read in its
entirety as follows:
"As used in this Article Thirteenth, the term "subsidiary" shall mean
a corporation a majority of the voting power of the capital stock (that is,
voting power entitled to be exercised in the election of directors, but
excluding voting power entitled so to be exercised only upon the happening
of some contingency unless such contingency shall have occurred and is
continuing) of which shall be owned by the Corporation or by one or more
subsidiaries or by the Corporation and one or more subsidiaries."
THIRTEENTH: Section C. of Article Thirteenth of the amended and restated
Certificate of Incorporation of the Corporation, set forth in Article Third of
the Restated Certificate, is corrected to read in its entirety as follows:
"C. The Board of Directors of the Corporation shall have the power
and duty to determine for the purposes of this Article Thirteenth, on the
basis of information known to the Corporation, whether:
(i) such other corporation, person or other entity beneficially
owns 5% or more of the outstanding shares of voting stock,
(ii) a corporation, person or entity is an "affiliate" or
"associate" (as defined in Paragraph B above) of another,
(iii) the assets being acquired by the Corporation, or any
subsidiary thereof, have an aggregate fair market value of less than
$1,000,000, and
(iv) the memorandum of understanding referred to in Paragraph D
below is substantially consistent with the transaction covered
thereby.
Any such determination shall be conclusive and binding for all purposes of
this Article Thirteenth."
FOURTEENTH: The last paragraph of the Restated Certificate, is corrected
to read in its entirety as follows:
-4-
"IN WITNESS WHEREOF, this Restated Certificate of Incorporation, which
restates and integrates and further amends the provisions of the Restated
Certificate of Incorporation of this Corporation, having been duly adopted
by the Board of Directors and stockholders of this Corporation in
accordance with Sections 242 and 245 of the Delaware General Corporation
Law, and written consent and notice having been given as provided in
Section 228 of the Delaware General Corporation Law, has been duly executed
by Walter V. Klemp, its Managing Director, and attested by Terry A.
Tognietti, its Secretary, this 24th day of January, 1994."
IN WITNESS WHEREOF, Drypers Corporation has caused this Certificate of
Correction to be signed by Walter V. Klemp, its Managing Director, and attested
by Terry A. Tognietti, its Secretary, this 15th day of March, 1994.
DRYPERS CORPORATION
By /s/ Walter V. Klemp
-------------------------
Walter V. Klemp
Managing Director
(duly authorized to act in the
capacity of President)
ATTEST:
By /s/ Terry A. Tognietti
-----------------------
Terry A. Tognietti
Secretary
-5-
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
OF DRYPERS CORPORATION
Drypers Corporation, a Delaware corporation (the "Corporation"), does
hereby certify:
That the amendment set forth below to the Corporation's Restated of
Certificate of Incorporation were duly adopted in accordance with the provisions
of Sections 242 and 245 of the General Corporation Law of the State of Delaware:
I. The first paragraph of Article Fourth of the Corporation's Restated
Certificate of Incorporation is hereby deleted and replaced in its entirety by
the following:
Fourth: The total number of shares of all classes of stock that the
corporation shall have authority to issue is 25,000,000, of which (i)
20,000,000 shares shall be Common Stock $.001 par value (the "Common
Stock"), and (ii) 5,000,000 shares shall be Senior Preferred Stock, $.01
par value per share (the "Preferred Stock").
II. Paragraph D of Article Thirteenth of the Corporation's Restated
Certificate of Incorporation is hereby deleted and replaced in its entirety by
the following:
D.
(1) The provisions of Paragraph A of this Article Thirteenth shall
not be applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative vote as is required by law, or
any other provision of this Restated Certificate of Incorporation, or otherwise,
if in the case of a Business Combination that does not involve cash or other
consideration being received by the stockholders of the Corporation, solely in
their capacity as stockholders, the conditions specified in the following
paragraph (a) is met, or if in the case of any other Business Combination, the
conditions specified in either paragraph (a) or (b) below are met (the term
"Business Combination" as used in this Article Thirteenth means any transaction
that is referred to in any one or more of clauses (i) through (iii) of Paragraph
A of this Article Thirteenth):
(a) Approval by Disinterested Directors. The Business
Combination shall have been approved by a majority of the Disinterested
Directors (as hereinafter defined).
(b) Price and Procedure Requirements. All of the following
conditions shall have been met:
(i) The aggregate amount of the cash and the Fair Market Value as
of the date of the consummation of the Business Combination (the
"Consummation Date") of consideration other than cash to be received per
share by holders of Common Stock in such Business Combination shall be at
least equal to the higher of the following (it being intended that the
requirements of this paragraph (b)(i) shall be required to be met with
respect to all shares of Common Stock outstanding, whether or not the
Interested Shareholder has previously acquired any shares of the Common
Stock):
(A) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid by
the Interested Shareholder for any shares of Common Stock acquired by it
(1) within the five-year period immediately prior to the first public
announcement of the proposal of the Business Combination (the "Announcement
Date") or (2) in the transaction in which it became an Interested
Shareholder, whichever is higher; and
(B) the Fair Market Value per share of Common Stock on the
Announcement Date or on the date on which the Interested Shareholder became
an Interested Shareholder (such latter date is referred to in this
Paragraph D as the "Determination Date"), whichever is higher.
(ii) The aggregate amount of the cash and the Fair Market Value
as of the Consummation Date of consideration other than cash to be received
per share by holders of shares of any class or series of outstanding Voting
Stock, other than the Common Stock, in such Business Combination shall be
an amount equal to at least the highest of the following (it being intended
that the requirements of this paragraph (b)(ii) shall be required to be met
with respect to every class of outstanding Voting Stock (other than the
Common Stock), whether or not the Interested Shareholder has previously
acquired any shares of a particular class of Voting Stock):
(A) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid by
the Interested Shareholder for any shares of such class of Voting Stock
acquired by it (1) within the five-year period immediately prior to the
Announcement Date or (2) in the transaction in which it became an
Interested Shareholder, whichever is higher; and
(B) (if applicable) the highest preferential amount per share to
which the holders of shares of such class of Voting Stock are entitled in
the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation; and
(C) the Fair Market Value per share of such class of Voting Stock
on the Announcement Date or on the Determination Date, whichever is higher;
and
(iii) The consideration to be received by holders of a
particular class or series of outstanding Voting Stock (including Common
Stock) shall be in cash or in the same form as the Interested Shareholder
has previously paid for shares of such class of Voting Stock previously
acquired by it. If the Interested Shareholder has paid for shares of any
class or series of Voting Stock with varying forms of consideration, the
form of consideration for such class or series of Voting Stock shall be
either cash or the form used to acquire the largest number of shares of
such class or series of Voting Stock previously acquired by it, whether or
not part of the Business Combination. The price determined in accordance
with paragraphs (b)(i) and (b)(ii) of this Paragraph D shall be subject to
appropriate adjustment in the event of any stock dividend, stock split,
combination of shares or similar event; and
(iv) After such Interested Shareholder has become an Interested
Shareholder and prior to the consummation of such Business Combination:
(A) except as approved by a majority of the Disinterested Directors, there
shall have been no failure to declare and pay at the regular date therefor
any full quarterly dividends (whether or not cumulative) on any outstanding
stock having preference over the Common Stock as to dividends or upon
liquidation; (B) there shall have been (1) no reduction in the annual rate
of dividends paid on the Common Stock (except as necessary to reflect any
subdivision of the Common Stock), except as approved by a majority of the
Disinterested Directors, and (2) an increase in such annual rate of
dividends as necessary to reflect any reclassification (including any
reverse stock split), recapitalization, reorganization or any similar
transaction which has the effect of reducing the number of outstanding
shares of the Common Stock, unless the failure so to increase such annual
rate is approved by a majority of the Disinterested Directors; and (C) such
Interested Shareholder shall have not become the beneficial owner of any
additional shares of Voting Stock except as part of the transaction which
results in such Interested Shareholder becoming an Interested Shareholder
and except in a transaction which, after giving effect thereto, would not
result in any increase in the Interested Shareholder's percentage of
beneficial ownership of any class of Voting Stock; and
(v) After such Interested Shareholder has become an Interested
Shareholder, such Interested Shareholder shall not have received the
benefit, directly or indirectly (except proportionately as a stockholder),
of any loans, advances, guarantees, pledges or other financial assistance
or any tax credits or other tax advantages provided by the Corporation,
whether in anticipation of or in connection with such Business Combination
or otherwise; and
(vi) A proxy or information statement describing the proposed
Business Combination and complying with the requirements of the Securities
Exchange Act of 1934 and the rules and regulations thereunder (or any
subsequent provisions replacing such Act, rules or regulations) shall be
mailed to public shareholders of the Corporation, if any, at least 30 days
prior to the consummation of such Business Combination (whether or not such
proxy or information statement is required to be mailed pursuant to such
Act or subsequent provisions); and
(vii) Such Interested Shareholder shall not have made any major
change in the Corporation's business or equity capital structure without
the approval of a majority of the Disinterested Directors.
(2) For the purpose of this Paragraph D:
(a) A "person" shall mean any individual, firm, corporation or
other entity.
(b) "Interested Shareholder" shall mean any person (other than
the Corporation or any Subsidiary) who or which:
(i) is the beneficial owner, directly or indirectly, of 5% or
more of the voting power of the outstanding voting stock; or
(ii) is an affiliate of the Corporation and at any time within
the two-year period immediately prior to the date in question was the
beneficial owner, directly or indirectly, of 5% or more of the voting power
of the then outstanding voting stock; or
(iii) is an assignee of or otherwise has succeeded to any shares
of voting stock which were at any time within the two-year period
immediately prior to the date in question beneficially owned by any
Interested Shareholder, if such assignment or succession shall have
occurred in the course of a transaction or series of transactions not
involving a public offering within the meaning of the Securities Act of
1933.
(c) For the purpose of determining whether a person is an
Interested Shareholder pursuant to subparagraph (1)(b) of this Paragraph D,
the number of shares of voting stock deemed to be outstanding shall include
shares deemed owned through the application of Paragraph B of this Article
Thirteenth but shall not include any other shares of voting stock which may
be issuable pursuant to any agreement, arrangement or understanding, or
upon exercise of conversion rights, warrants or options, or otherwise.
(d) "Disinterested Director" means any member of the board of
directors of the Corporation who is unaffiliated with the Interested
Shareholder and was a member of the board of directors of the Corporation
prior to the time that the Interested Shareholder became an Interested
Shareholder, and any successor of a Disinterested Director who is
unaffiliated with the Interested Shareholder and is recommended to succeed
a Disinterested Director by a majority of Disinterested Directors then on
the board of directors.
(e) "Fair Market Value" means: (i) in the case of cash, the
aggregate amount of such cash; (ii) in the case of stock, the highest
closing sale price during the 30-day period immediately preceding the date
in question of a share of such stock on the Composite Tape for New York
Stock Exchange Listed Stocks, or, if such stock is not quoted on the
Composite Tape for the New York Stock Exchange, or, if such stock is not
listed on New York Stock Exchange, on the principal United States
securities exchange
registered under the Securities Exchange Act of 1934 on which such stock is
listed, or, if such stock is not listed on any such exchange, the highest
closing bid quotation with respect to a share of such stock during the 30-
day period preceding the date in question on the National Association of
Securities Dealers, Inc. Automated Quotations System, the National
Quotation Bureau Incorporated or otherwise in the over-the-counter market,
or if no such quotations are available, the fair market value on the date
in question of a share of such stock as determined by a majority of the
Disinterested Directors in good faith; and (iii) in the case of property
other than cash or stock, the fair market value of such property on the
date in question as determined by a majority of Disinterested Directors in
good faith.
(f) In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than cash to be
received" as used in subparagraphs (1)(b)(i) and (1)(b)(ii) of this
Paragraph D shall include the shares of Common Stock and the shares of any
other class of outstanding Voting Stock retained by the holders of such
shares.
(g) "Equity Security" shall have the meaning ascribed to such
term in Section 3(a)(11) of the Securities Exchange Act of 1934, as in
effect on January 1, 1995.
IN WITNESS WHEREOF, Drypers Corporation has caused this Certificate to be
signed by its duly authorized officer this 30th day of May, 1995.
DRYPERS CORPORATION
By: /s/ Walter V. Klemp
----------------------------------------------
Walter V. Klemp, Chairman of the
Board, Co-Chief Executive Officer
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
HYGIENIC PRODUCTS INTERNATIONAL, INC.
A WASHINGTON CORPORATION
INTO
DRYPERS CORPORATION
A DELAWARE CORPORATION
Drypers Corporation, a corporation organized and existing pursuant to
the laws of Delaware (the "Company"), does hereby certify:
First: That the Company was incorporated on March 20, 1991, pursuant
to the General Corporation Law of the State of Delaware.
Second: That the Company owns all of the outstanding shares of the
stock of Hygienic Products International, Inc., a Washington corporation
incorporated on February 3, 1992, pursuant to the Washington Business
Corporation Act, the provisions of which permit the merger of a corporation of
another state and a corporation organized and existing under the laws of said
state, and the aggregate authorized capital stock of Hygienic Products
International, Inc. consists of 1,000,000 million shares of common stock, no par
value.
Third: That the Company, by the following resolutions of its Board of
Directors duly adopted at a meeting duly held on February 22, 1996, determined
to merge Hygienic Products International, Inc. into itself:
RESOLVED, that subject to the terms and conditions of the Plan of Merger
(as defined below), the Company merge (the "Merger") its wholly owned
subsidiary, Hygienic Products International, Inc., a Washington corporation
("HPI"), into itself; and that the Company assume all rights, privileges,
powers, property, liabilities, duties and obligations of HPI;
RESOLVED, that, to effect the Merger, the Company is hereby authorized to
enter into an Agreement and Plan of Merger (the "Plan of Merger") with HPI,
setting forth the agreements and conditions under which the Merger will occur;
RESOLVED, that the form, terms and provisions of the draft of the Plan of
Merger presented to the Board of Directors of the Company be, and they hereby
are, in all respects approved, adopted, ratified and confirmed, and that each of
any Co-Chief Executive Officer and any Vice President of the Company be, and
each of them hereby is, authorized, in the name and on behalf of the Company, to
execute and deliver the Plan of Merger in the form of the Plan of Merger
presented to the Board of Directors of the Company, with such changes, deletions
and additions thereto as the officer of the Company executing such instrument or
document shall in his discretion approve, the execution and delivery by such
officer of such instrument or document to be conclusive
evidence of the approval of this Board of Directors thereof and all matters
relating thereto;
RESOLVED, that the Merger shall be effective February 23, 1996;
RESOLVED, that any Co-Chief Executive Officer, any Vice President or the
Secretary of the Company be, and each hereby is, authorized and directed to make
and execute a Certificate of Ownership and Merger setting forth a copy of these
resolutions to merge into itself its wholly owned subsidiary, HPI, and assume
liabilities and obligations, and the date of adoption thereof; and to cause the
same to be filed with the Secretary of State of Delaware; and to do all acts and
things whatsoever, whether within or without the State of Delaware, that may be
necessary or proper to effect the Merger.
RESOLVED, that any Co-Chief Executive Officer, any Vice President or the
Secretary of the Company be, and each hereby is, authorized and directed to make
and execute the Articles of Merger setting forth the Plan of Merger to merge
into itself its wholly owned subsidiary, HPI, and assume liabilities and
obligations, and a statement that shareholder approval was not required; and to
cause the same to be filed with the Secretary of State of Washington; and to do
all acts and things whatsoever, whether within or without the State of
Washington, that may be necessary or proper to effect the Merger.
RESOLVED, that, in connection with the Merger, the appropriate officers of
the Company be, and each of them hereby is, authorized to prepare, execute,
deliver and perform such additional agreements, documents or other instruments
and to take such other action, in the name and on behalf of the Company, as each
of such officers, in his discretion, shall deem necessary or advisable to effect
the Merger, the taking of such action and the preparation, execution, delivery
and performance of such agreements, documents and other instruments shall be
conclusive evidence of the approval of this Board of Directors thereof and all
matters relating thereto;
RESOLVED, that any Co-Chief Executive Officer, any Vice President and
Secretary of the Company be, and each of them hereby is, authorized to execute,
deliver and perform such agreements, documents and other instruments and take
such other action, in the name and on behalf of the Company, as such officer, in
his discretion, shall deem necessary or advisable to carry out the intent of the
foregoing resolutions, and the execution, delivery and performance of any such
agreements, documents or other instruments or the performance of any such act
shall be conclusive evidence of the approval of this Board of Directors thereof
and all matters relating thereto; and
RESOLVED, that any and all actions taken by or on behalf of the officers of
the Company prior to the adoption of these resolutions which are within the
authority conferred hereby are hereby in all respects ratified, confirmed and
approved.
and the Plan of Merger was approved, adopted, certified and executed and
acknowledged by Hygienic Products International, Inc. in accordance with the
Washington Business Corporation Act;
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and the Plan of Merger was approved, adopted, certified and executed and
acknowledged by the Company in accordance with Section 253 of the General
Corporation Law of the State of Delaware.
Fourth: That pursuant to the Washington Business Corporation Act, the sole
shareholder of Hygienic Products International, Inc. are not required to approve
the Plan of Merger.
Fifth: The surviving corporation of the merger shall be the Company.
Sixth: The Certificate of Incorporation of the Company shall be the
Certificate of Incorporation of the surviving corporation.
Seventh: The bylaws of the Company shall be the bylaws of the surviving
corporation.
Eight: A copy of the Plan of Merger is on file at the principal place of
business of the surviving corporation.
Ninth: A copy of the Plan of Merger will be furnished, upon request and
without cost, to any stockholder of the Company or Hygienic Products
International, Inc.
IN WITNESS WHEREOF, the Company has caused this Certificate to be signed in
counterparts by Walter V. Klemp, its Chairman of the Board and Co-Chief
Executive Officer, this 22nd day of February, 1996.
DRYPERS CORPORATION
By /s/ Walter V. Klemp
------------------------------------
Walter V. Klemp
Chairman of the Board and Co-Chief
Executive Officer
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CERTIFICATE OF DESIGNATIONS
OF
SENIOR CONVERTIBLE CUMULATIVE 7.5% PREFERRED STOCK
OF
DRYPERS CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
DRYPERS CORPORATION, a corporation organized and existing under the laws of
the State of Delaware (the "Corporation"), does hereby certify that, pursuant to
the authority conferred on the Board of Directors of the Corporation by the
Restated Certificate of Incorporation, as amended, of the Corporation and in
accordance with Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors of the Corporation adopted the following
resolution establishing a series of 90,000 shares of Senior Preferred Stock of
the Corporation designated as "Senior Convertible Cumulative 7.5% Preferred
Stock":
RESOLVED, that pursuant to the authority conferred on the Board of
Directors of this Corporation by the Restated Certificate of Incorporation,
as amended, of the Corporation, a series of Senior Preferred Stock, par
value $.01 per share, of the Corporation be and hereby is established and
created, and that the designation and number of shares thereof and the
voting and other powers, preferences and relative, participating, optional
or other rights of the shares of such series and the qualifications,
limitations and restrictions thereof shall be as follows:
1. Designation and Amount. There shall be a series of Senior
Preferred Stock designated as "Senior Convertible Cumulative 7.5% Preferred
Stock" and the number of shares constituting such series shall be 90,000. Such
series is referred to herein as the "7.5% Preferred Stock."
2. Stated Value. The stated value of the 7.5% Preferred Stock shall
be $100.00 per share.
3. Rank. All shares of 7.5% Preferred Stock shall rank prior as to
payment of dividends, redemption and distributions of assets upon liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
to all of the Corporation's now or hereafter issued Common Stock, par value
$.001 per share (the "Common Stock"), and to any other class of Preferred Stock
of the Corporation which hereafter may be issued.
4. Dividends. The holders of the 7.5% Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds at the time legally available therefor, dividends at the rate of $7.50 per
annum per share, which shall be fully cumulative and shall be declared, to the
extent permitted by applicable law, on March 1, June 1, September 1 and December
1 of each year commencing upon the issuance of the shares of 7.5% Preferred
Stock. Dividends shall accrue simple interest from the date declared until paid
at the rate of 7.50% per annum, compounded quarterly. Dividends shall be
payable only upon the conversion or redemption of shares of 7.5% Preferred Stock
or on December 1, 2003 (the "Dividend Payment Date") (except that if the
Dividend Payment Date or the date of any such conversion or redemption is a
Saturday, Sunday or legal holiday, then such dividend shall be payable on the
next day that is not a Saturday, Sunday or legal holiday), and may be paid in
cash or in Common Stock, par value $.001 per share, of the Corporation ("Common
Stock"), at the option of the Corporation. Dividends paid in Common Stock shall
be valued at the current Market Value (as defined in Section 9 hereof) per share
of Common Stock, subject to adjustment as provided in Section 7(c) hereof.
Dividends shall be paid to the holder or holders of record of such shares as
such holder appears on the stock transfer books of the Corporation on the date
of conversion, on the record date with respect to any redemption, as may be
fixed by the Board of Directors (or, to the extent permitted by applicable law,
a duly authorized committee thereof), or on the Dividend Payment Date. For
purposes hereof, the term "legal holiday" shall mean any day on which banking
institutions are authorized to close in New York City, New York or in Houston,
Texas. Subject to the next paragraph of this Section 4, dividends on account of
arrears for any past dividend period may be declared at any time, without
reference to any regular dividend declaration date. The amount of dividends
payable per share of 7.5% Preferred Stock for each quarterly dividend period
shall be computed by dividing the annual dividend amount by four. The amount of
dividends payable for the initial dividend period and any period shorter than a
full quarterly dividend period shall be computed on the basis of a 360-day year
of twelve 30-day months.
No dividends or other distributions, shall be declared, paid or set
apart for payment on, and no purchase, redemption or other acquisition shall be
made by the Corporation of, any shares of Common Stock or other capital stock of
the Corporation ranking junior as to dividends to the 7.5% Preferred Stock (the
"Junior Dividend Stock") unless and until all accrued and unpaid dividends
payable on the 7.5% Preferred Stock shall have been paid or declared and set
apart for payment.
5. Liquidation Preference. In the event of a liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
the holders of 7.5% Preferred Stock shall be entitled to receive, out of the
assets of the Corporation available for distribution to stockholders, whether
such assets are stated capital or surplus of any nature, an amount equal to the
sum of $100.00 per share, all dividends accrued and unpaid thereon to the date
of final distribution to such holders, whether or not declared, and all interest
thereon, before any payment shall be made or any assets distributed to the
holders of Common Stock or any other class or series of the Corporation's
capital stock ranking junior as to liquidation rights to the 7.5% Preferred
Stock. Neither a consolidation or merger of the Corporation with another
corporation nor a sale or transfer of all or part of the Corporation's assets
for cash, securities or
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other property will be considered a liquidation, dissolution or winding up of
the Corporation.
6. Optional Redemption. The Corporation may, at its option and
subject to the terms of the Indenture, redeem any or all of the outstanding
shares of 7.5% Preferred Stock at any time on or after March 1, 1998 (any such
date being hereinafter referred to as a "Redemption Date"), provided that the
Market Value of the Common Stock on such Redemption Date is at least $3.00 per
share. Any redemption by the Corporation of less than all of the outstanding
shares shall be made on a pro rata basis among all holders of 7.5% Preferred
Stock. The per share cash redemption price for the 7.5% Preferred Stock on a
Redemption Date shall be $100.00 per share, plus an amount in cash or Common
Stock of the corporation equal to all dividends on the 7.5% Preferred Stock
accrued and unpaid thereon, whether or not declared, pro rata to such Redemption
Date, plus all interest accrued on such dividends through such Redemption Date,
such sum being hereinafter referred to as the "Redemption Price."
Not more than 60 nor less than 20 days prior to a Redemption Date,
notice by personal delivery, overnight delivery or first class mail, postage
prepaid, shall be given to the holders of record of the 7.5% Preferred Stock to
be redeemed, addressed to such stockholders at their last addresses as shown on
the stock transfer books of the Corporation. Such notice of redemption shall
specify the Redemption Date, the Redemption Price, the place or places of
payment, that payment will be made upon presentation and surrender of the shares
of 7.5% Preferred Stock, that on and after Redemption Date, dividends will cease
to accumulate on redeemed shares, the then-effective conversion rate pursuant to
Section 7 hereof and that the right of holders to convert shall terminate at the
close of business on the third business day prior to such Redemption Date.
On or after a Redemption Date, each holder of the shares of 7.5%
Preferred Stock shall surrender the certificate or certificates evidencing the
redeemed shares to the Corporation at the place designated in such notice and
shall thereupon be entitled to receive payment of the Redemption Price.
7. Conversion Privilege.
(a) Right of Conversion. Each share of 7.5% Preferred Stock shall be
convertible at the option of the holder thereof at any time prior to the close
of business on the third business day prior to a Redemption Date into fully paid
and nonassessable shares of Common Stock and such other securities and property
as hereinafter provided, at the rate of 100 shares of Common Stock for each full
share of 7.5% Preferred Stock, plus any accrued dividends or interest to be
paid, at the option of the Corporation and subject to the terms of the
Indenture, in cash or in the form of Common Stock, in each case subject to
adjustment as set forth in paragraph (c) of this Section 7.
(b) Conversion Procedures. Any holder of shares of 7.5% Preferred
Stock desiring to convert such shares into Common Stock shall surrender the
certificate or certificates evidencing such shares of 7.5% Preferred Stock at
the office of the
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transfer agent for the 7.5% Preferred Stock, which certificate or certificates,
if the Corporation shall so require, shall be duly endorsed to the Corporation
or in blank, or accompanied by proper instruments of transfer to the Corporation
or in blank, accompanied by irrevocable written notice to the Corporation that
the holder elects so to convert such shares of 7.5% Preferred Stock and
specifying the name or names (with address) in which a certificate or
certificates evidencing shares of Common Stock are to be issued.
The Corporation shall, as soon as practicable after such deposit of
certificates evidencing shares of 7.5% Preferred Stock accompanied by the
written notice and compliance with any other conditions herein contained,
deliver at such office of such transfer agent to the person or persons for whose
account such shares of 7.5% Preferred Stock were so surrendered, or to the
nominee or nominees of such person, certificates evidencing the number of full
shares of Common Stock to which such person shall be entitled as aforesaid,
together with a cash adjustment of any fraction of a share as hereinafter
provided. Subject to the following provisions of this paragraph, such
conversion shall be deemed to have been made as of the date of such surrender of
the shares of 7.5% Preferred Stock to be converted, and the person or person
entitled to receive the Common Stock deliverable upon conversion of such 7.5%
Preferred Stock shall be treated for all purposes as the record holder or
holders of such Common Stock on such date; provided, however, that the
Corporation shall not be required to convert any shares of 7.5% Preferred Stock
while the stock transfer books of the Corporation are closed for any purpose,
but the surrender of 7.5% Preferred Stock for conversion during any period while
such books are so closed shall become effective for conversion immediately upon
the reopening of such books as if the surrender had been made on the date of
such reopening, and the conversion shall be at the conversion rate in effect on
such date.
(c) Adjustment of Conversion Rate. The number of shares of Common
Stock and number or amount of any other securities and property as hereinafter
provided into which a share of 7.5% Preferred Stock is convertible (the
"conversion rate") shall be subject to adjustment from time to time as follows:
(i) In case the Corporation shall (1) pay a dividend or make a
distribution on its Common Stock that is paid or made (A) in other shares
of stock of the Corporation or (B) in rights to purchase stock or other
securities if such rights are not separable from the Common Stock except
upon the occurrence of a contingency, (2) subdivide its outstanding shares
of Common Stock into a greater number of shares or (3) combine its
outstanding shares of Common Stock into a smaller number of shares, then in
each such case the conversion rate in effect immediately prior thereto
shall be adjusted retroactively so that the holder of any shares of 7.5%
Preferred Stock thereafter surrendered for conversion shall be entitled to
receive the number of shares of Common Stock and other shares and rights to
purchase stock or other securities (or, in the event of the redemption of
any such shares or rights, any cash, property or securities paid in respect
of such redemption) which such holder would have owned or have been
entitled to receive after the happening of any event described above had
such shares of 7.5% Preferred Stock been converted
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immediately prior to the happening of such event. An adjustment made
pursuant to this subparagraph (i) shall become effective immediately after
the record date in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision
or combination.
(ii) In case the Corporation shall issue rights or warrants to all
holders of its Common Stock entitling them (for a period expiring within 45
days after the date fixed for determination mentioned below) to subscribe
for or purchase shares of Common Stock at a price per share less than the
current Market Value (as defined in Section 9 hereof) per share of the
Common Stock on the date fixed for the determination of stockholders
entitled to receive such rights or warrants, then the conversion rate in
effect at the opening of business on the day following the date fixed for
such determination shall be increased by multiplying such conversion rate
by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock so offered for
subscription or purchase and the denominator shall be the number of shares
of Common Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common
Stock so offered for subscription or purchase would purchase at such
current market price, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination; provided, however, that in the event that all the shares of
Common Stock offered for subscription or purchase are not delivered upon
the exercise of such rights or warrants, upon the expiration of such rights
or warrants the conversion rate shall be readjusted to the conversion rate
which would have been in effect had the numerator and the denominator of
the foregoing fraction and the resulting adjustment been made based upon
the number of shares of Common Stock actually delivered upon the exercise
of such rights or warrants, rather than upon the number of shares of Common
Stock offered for subscription or purchase. For the purposes of this
subparagraph (ii), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the
Corporation.
(iii) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its
indebtedness, cash (excluding ordinary cash dividends paid out of retained
earnings of the Corporation), other assets or rights or warrants to
subscribe for or purchase any security (excluding those referred to in
subparagraphs (i) and (ii) above), then in each such case the conversion
rate shall be adjusted retroactively so that the same shall equal the rate
determined by multiplying the conversion rate in effect immediately prior
to the close of business on the date fixed for the determination of
stockholders entitled to receive such distribution by a fraction of which
the numerator shall be the current Market Value (as hereinafter defined)
per share of the Common Stock on the date fixed for such determination and
the denominator shall be such current market price per share of the Common
Stock less the amount of cash and the then fair market value (as determined
by the Board of Directors, whose determination shall be conclusive and
described in a resolution of the
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Board of Directors) of the portion of the assets, rights or evidences of
indebtedness so distributed applicable to one share of Common Stock, such
adjustment to become effective immediately prior to the opening of business
on the day following the date fixed for the determination of stockholders
entitled to receive such distribution.
(iv) No adjustment in the conversion rate shall be required unless
such adjustment would require an increase or decrease of at least 1% in
such rate; provided, however, that the Corporation may make any such
adjustment at its election; and provided, further, that any adjustments
which by reason of this subparagraph (iv) are not required to be made shall
be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 7 shall be made to the nearest cent or
to the nearest one-hundredth of a share, as the case may be.
(v) Whenever the conversion rate is adjusted as provided in any
provision of this Section 7:
(1) the Corporation shall compute the adjusted conversion rate
in accordance with this Section 7 and shall prepare a certificate
signed by the principal financial officer of the Corporation setting
forth the adjusted conversion rate and showing in reasonable detail
the facts upon which such adjustment is based, and such certificate
shall forthwith be filed with the transfer agent of the 7.5% Preferred
Stock; and
(2) a notice stating that the conversion rate has been adjusted
and setting forth the adjusted conversion rate shall forthwith be
required, and as soon as practicable after it is required, such notice
shall be mailed by the Corporation to all record holders of 7.5%
Preferred Stock at their last addresses as they shall appear in the
stock transfer books of the Corporation.
(vi) In the event that at any time, as a result of any adjustment
made pursuant to this Section 7, the holder of any shares of 7.5% Preferred
Stock thereafter surrendered for conversion shall become entitled to
receive any shares of the Corporation other than shares of Common Stock or
to receive any other securities, the number of such other shares or
securities so receivable upon conversion of any share of 7.5% Preferred
Stock shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions contained in
this Section 7 with respect to the Common Stock.
(d) No Fractional Shares. No fractional shares or scrip representing
fractional shares of Common Stock shall be issued upon conversion of 7.5%
Preferred Stock. If more than one certificate evidencing shares of 7.5%
Preferred Stock shall be surrendered for conversion at one time by the same
holder, the number of full shares issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of 7.5% Preferred Stock
so surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any
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shares of 7.5% Preferred Stock, the Corporation shall, at its option and subject
to the terms of the Indenture, either (i) pay a cash adjustment in respect of
such fractional interest in an amount equal to the same fraction of the Market
Value per share of Common Stock at the close of business on the day of
conversion or (ii) round up to the nearest whole share and pay such additional
share in lieu of the adjustment.
(e) Reclassification, Consolidation, Merger or Sale of Assets. In
case of any reclassification of the Common Stock, any consolidation of the
Corporation with, or merger of the Corporation into, any other entity, any
merger of another entity into the Corporation (other than a merger which does
not result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock of the Corporation), any sale or transfer of
all or substantially all of the assets of the Corporation or any compulsory
share exchange, pursuant to which share exchange the Common Stock is converted
into other securities, cash or other property, then, as a condition to approval
and validity of any such merger, sale or transfer of assets or compulsory share
exchange, lawful provision shall be made as part of the terms of such
transaction whereby the holder of each share of 7.5% Preferred Stock then
outstanding shall, subject to the terms of the Indenture, have the right
thereafter, during the period such share shall be convertible, to convert such
share only into the kind and amount of securities, cash and other property
receivable upon such reclassification, consolidation, merger, sale, transfer or
share exchange by a holder of the number of shares of Common Stock of the
Corporation into which such share of 7.5% Preferred Stock might have been
converted immediately prior to such reclassification, consolidation, merger,
sale, transfer or share exchange. The Corporation, the entity formed by such
consolidation or the entity resulting from such merger or which acquires such
assets or which acquires the Corporation's shares, as the case may be, shall
make provisions in its certificate or articles of incorporation or other
constituent document to establish such right. Such certificate or articles of
incorporation or other constituent document shall provide for adjustments which,
for events subsequent to the effective date of such certificate or articles of
incorporation or other constituent document, shall be at least as favorable to
the holders of 7.5% Preferred Stock and as nearly equivalent as may be
practicable to the adjustments provided for in this Section 7. The above
provisions shall similarly apply to successive reclassifications,
consolidations, mergers, sales, transfers or share exchanges.
(f) Reservation of Shares; Transfer Taxes; Etc. The Corporation shall
at all times reserve and keep available, out of its authorized and unissued
stock, solely for the purpose of effecting the conversion of the 7.5% Preferred
Stock, such number of shares of its Common Stock, free of preemptive rights, as
shall from time to time be sufficient to effect the conversion of all shares of
7.5% Preferred Stock, including all dividends and interest accrued thereon, from
time to time outstanding. The Corporation shall from time to time, in
accordance with the laws of the State of Delaware, increase the authorized
number of shares of Common Stock if at any time the number of shares of Common
Stock not outstanding shall not be sufficient to permit the conversion of all
the then-outstanding shares of 7.5% Preferred Stock.
If any shares of Common Stock required to be reserved for purposes of
conversion of the 7.5% Preferred Stock hereunder require registration with or
approval
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of any governmental authority under any federal or state law before such shares
may be issued upon conversion, the Corporation will, in good faith and as
expeditiously as possible, endeavor to cause such shares to be duly registered
or approved, as the case may be. If the Common Stock is traded on the Nasdaq
SmallCap Market System or any national securities exchange, the Corporation
will, if permitted by the rules of the Nasdaq SmallCap Market System or of such
exchange, list and keep listed on the Nasdaq SmallCap Market System or on such
exchange, upon official notice of issuance, all shares of Common Stock issuable
upon conversion of the 7.5% Preferred Stock.
The Corporation shall pay any and all issue or other taxes that may be
payable in respect of any issue or delivery of shares of Common Stock upon
conversion of the 7.5% Preferred Stock. The Corporation shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issue or delivery of Common Stock (or other securities or assets) in a
name other than that in which the shares of 7.5% Preferred Stock so converted
were registered, and no such issue or delivery shall be made unless and until
the person requesting such issue has paid to the Corporation the amount of such
tax or has established, to the satisfaction of the Corporation, that such tax
has been paid.
Before taking any action which would cause an adjustment reducing the
conversion rate such that the effective conversion price would be below the then
par value of the Common Stock, the Corporation shall take any corporate action
which may, in the opinion of its counsel, be necessary in order that the
Corporation may validly and legally issue fully paid and nonassessable shares of
Common Stock at the conversion rate as so adjusted.
(g) Prior Notice of Certain Events. In case:
(i) the Corporation shall (1) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable in
shares of Common Stock or (B) a dividend payable in cash out of its
retained earnings other than any special or nonrecurring or other
extraordinary dividend or (2) declare or authorize a redemption or
repurchase of in excess of 10% of the then-outstanding shares of Common
Stock; or
(ii) the Corporation shall authorize the granting to the holders of
Common Stock of rights or warrants to subscribe for or purchase any shares
of stock of any class or of any other rights or warrants (other than any
rights specified in paragraph (c)(i)(1)(B) of this Section 7); or
(iii) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a change in
par value, or from par value to no par value, or from no par value to par
value), or of any consolidation or merger to which the Corporation is a
party and for which approval of any stockholders of the Corporation shall
be required, or of the sale or transfer of all or substantially all of the
assets of the Corporation or of any compulsory share exchange whereby the
Common Stock is converted into other securities, cash or other property; or
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(iv) of the voluntary or involuntary dissolution, liquidation or winding up
of the Corporation;
then the Corporation shall cause to be filed with the transfer agent for the
7.5% Preferred Stock, and shall cause to be mailed to the holders of record of
the 7.5% Preferred Stock, at their last address as they shall appear upon the
stock transfer books of the Corporation, at least 15 days prior to the
applicable record date hereinafter specified, a notice stating (x) the date on
which a record (if any) is to be taken for the purpose of such dividend,
distribution, redemption, repurchase or granting of rights or warrants or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record entitled to such dividend, distribution, redemption, rights or warrants
are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up (but no failure to mail such notice or
any defect therein or in the mailing thereof shall affect the validity of the
corporate action required to be specified in such notice).
(h) Other Changes in Conversion Rate. The Corporation from time to
time may increase the conversion rate by any amount for any period of time if
the period is at least 20 days and if the increase is irrevocable during the
period. Whenever the conversion rate is so increased, the Corporation shall
mail to holders of record of the 7.5% Preferred Stock a notice of the increase
at least 15 days before the date the increased conversion rate takes effect, and
such notice shall state the increased conversion rate and the period it will be
in effect.
The Corporation may make such increases in the conversion rate, in
addition to those required or allowed by this Section 7, as shall be determined
by it, as evidenced by a resolution of the Board of Directors, to be advisable
in order to avoid or diminish any income tax to holders of Common Stock
resulting from any dividend or distribution of stock or issuance of rights or
warrants to purchase or subscribe for stock or from any event treated as such
for income tax purposes.
8. Special Conversion Rights.
(a) Change of Control. Upon the occurrence of a Change of Control (as
defined in paragraph (e) below) with respect to the Corporation, each holder of
7.5% Preferred Stock shall have the right, at the holder's option, for a period
of 30 days after the mailing of a notice by the Corporation that a Change of
Control has occurred, to convert all, but not less than all, of such holder's
7.5% Preferred Stock into 100 shares of Common Stock of the Corporation (as such
number may be adjusted pursuant to Section 7(c) hereof). The Corporation may,
at its option and subject to the terms of the Indenture, on a pro rata basis
among holders of 7.5% Preferred Stock, in lieu of providing 100 shares of Common
Stock (as such number may be adjusted pursuant to Section 7(c)) upon any such
special conversion, provide the holders with cash equal to the Market Value (as
hereinafter defined) of such number of shares of Common Stock.
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Shares of 7.5% Preferred Stock which become convertible pursuant to a special
conversion right shall, unless so converted, remain convertible into the number
of shares of Common Stock that the holders of the 7.5% Preferred Stock would
have owned immediately after the Change of Control if the holders had converted
the 7.5% Preferred Stock immediately before the effective date of the Change of
Control.
(b) Fundamental Change. Upon the occurrence of a Fundamental Change
(as defined in paragraph (e) below) with respect to the Corporation, each holder
of 7.5% Preferred Stock shall have a special conversion right, at the holder's
option and subject to the terms of the Indenture, for a period of 30 days after
the mailing of a notice by the Corporation that a Fundamental Change has
occurred, to convert all, but not less than all, of such holder's 7.5% Preferred
Stock into the kind and amount of cash, securities, property or other assets
receivable upon such Fundamental Change by a holder of the number of shares of
Common Stock into which such shares of 7.5% Preferred Stock would have been
convertible immediately prior to such Fundamental Change. The Corporation or a
successor corporation, as the case may be, may, at its option and in lieu of
providing the consideration as required above upon such conversion, provide the
holder with cash equal to the Market Value of the Common Stock multiplied by the
number of shares of Common Stock into which such shares of 7.5% Preferred Stock
would have been convertible immediately prior to such Fundamental Change. 7.5%
Preferred Stock which becomes convertible pursuant to a special conversion right
shall, unless so converted, remain convertible into the kind and amount of cash,
securities, property or other assets that the holders of the 7.5% Preferred
Stock would have owned immediately after the Fundamental Change if the holders
had converted the 7.5% Preferred Stock immediately before the effective date of
the Fundamental Change.
(c) Notice. Upon the occurrence of a Change of Control or a
Fundamental Change with respect to the Corporation, within 30 days after such
occurrence, the Corporation shall mail to each registered holder of 7.5%
Preferred Stock a notice of such occurrence (the "Special Conversion Notice")
setting forth the following:
(i) the event constituting the Change of Control or Fundamental
Change;
(ii) the conversion date upon exercise of the applicable special
conversion right;
(iii) the conversion rate (and related conversion price) then in
effect under Section 7 and the continuing conversion rights, if any, under
Section 7;
(iv) the name and address of the paying agent and conversion agent;
(v) that holders who want to convert shares of 7.5% Preferred Stock
must satisfy the requirements of Section 7(b) and must exercise such
conversion right within the 30-day period after the mailing of such notice
by the Corporation;
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(vi) that exercise of such conversion right shall be irrevocable and
no dividends on shares of 7.5% Preferred Stock (or portions thereof)
tendered for conversion shall accrue from and after the conversion date;
and
(vii) that the Corporation (or a successor corporation, if
applicable) may, at its option, elect to pay cash (specifying the amount
thereof per share) for all shares of 7.5% Preferred Stock tendered for
conversion.
(d) Exercise Procedures. A holder of 7.5% Preferred Stock must
exercise the special conversion right within the 30-day period after the mailing
of the Special Conversion Notice or such special conversion right shall expire.
Such right must be exercised in accordance with Section 7(b) to the extent the
procedures in Section 7(b) are consistent with the special provisions of this
Section 8. Exercise of such conversion right shall be irrevocable, to the
extent permitted by applicable law, and dividends on 7.5% Preferred Stock
tendered for conversion shall cease to accrue from and after the conversion
date. The conversion date with respect to the exercise of a special conversion
right arising upon a Change of Control or Fundamental Change shall be the tenth
day after the mailing of the Special Conversion Notice. In taking any action in
connection with any Change of Control or Fundamental Change or related special
conversion right, the Company will comply with all applicable federal securities
laws and regulations.
9. Definitions. The following definitions shall apply to terms used
in this Certificate.
(i) a "Change of Control" with respect to the Corporation shall be
deemed to have occurred at such time as any person (within the meaning of
Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), including a group (within the meaning of
Rule 13d-5 under the Exchange Act), together with any of its Affiliates or
Associates (as defined below), files or becomes obligated to file a report
(or any amendment or supplement thereto) on Schedule 13D or 14D-1 pursuant
to the Exchange Act disclosing that such person has become the beneficial
owner of either (i) 50% or more of the shares of Common Stock of the
Corporation then outstanding or (ii) securities representing 50% or more of
the combined voting power of the Voting Stock (as defined below) of the
Corporation then outstanding; provided, that a Change of Control shall not
be deemed to have occurred with respect to any transaction that constitutes
a Fundamental Change. An "Affiliate" of a specified person is a person
that directly or indirectly controls, or is controlled by, or is under
common control with, the person specified. An "Associate" of a person
means (1) any corporation or organization, other than the Corporation or
any subsidiary of the Corporation, of which the person is an officer or
partner or is, directly or indirectly, the beneficial owner of 10% or more
of any class of equity securities; (2) any trust or estate in which the
person has a substantial beneficial interest or as to which the person
serves as trustee or in a similar fiduciary capacity; and (3) any relative
or spouse of the person, or any relative of the spouse, who has the same
home as the person or who is a director or officer of the person or any of
its parents or subsidiaries.
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As used herein, a person shall be deemed to have "beneficial ownership"
with respect to, and shall be deemed to "beneficially own," any securities
of the Corporation in accordance with Section 13 of the Exchange Act and
the rules and regulations (including Rule 13d-3, Rule 13d-5 and any
successor rules) promulgated by the Securities and Exchange Commission
thereunder; provided that a person shall be deemed to have beneficial
ownership of all securities that any such person has a right to acquire
whether such right is exercisable immediately or only after the passage of
time and without regard to the 60-day limitation referred to in Rule 13d-3;
(ii) a "Fundamental Change" with respect to the Corporation means (i)
the occurrence of any transaction or event in connection with which 66 2/3%
or more of the outstanding Common Stock of the Corporation shall be
exchanged for, converted into, acquired for or constitute solely the right
to receive cash, securities, property or other assets (whether by means of
an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise) or (ii) the
conveyance, sale, lease, assignment, transfer or other disposal of all or
substantially all of the Corporation's property, business or assets;
provided, however, that a Fundamental Change shall not be deemed to have
occurred with respect to either of the following transactions or events:
(a) any transaction or event in which more than 50% (by value as determined
in good faith by the Board of Directors of the Corporation) of the
consideration received by holders of Common Stock consists of Marketable
Stock (as defined below); or (b) any consolidation or merger of the
Corporation in which the holders of Common Stock of the Corporation
immediately prior to such transaction own, directly or indirectly, (1) 50%
or more of the common stock of the sole surviving corporation (or of the
ultimate parent of such sole surviving corporation) outstanding at the time
immediately after such consolidation or merger and (2) securities
representing 50% or more of the combined voting power of the surviving
corporation's Voting Stock (as defined below) (or of the Voting Stock of
the ultimate parent of such surviving corporation) outstanding at such
time.
(iii) "Indenture" means the Indenture dated as of November 10, 1992
among the Corporation, First Interstate Bank of Texas, N.A., as trustee,
and certain of the Corporation's subsidiaries, as guarantors, pursuant to
which the Corporation's 12.5% Series B Senior Notes due 2002 are issued, as
such Indenture may be amended and supplemented from time to time in
accordance with the terms thereof; provided, however, that the Indenture
may not be amended or supplemented in any manner which would adversely
affect the ability of the Corporation to pay the dividends or interest on
or support the conversion of the 7.5% Preferred Stock without the consent
of the holders of the 7.5% Preferred Stock.
(iv) the "Market Value" of the Common Stock or any other Marketable
Stock on any date shall be deemed to be the average of the daily closing
prices for the 20 consecutive trading days commencing with the 30th trading
day before the day in question. The closing price for each day shall be
the reported last
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sales price or, in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices, in either case on the
Nasdaq SmallCap Market System or, if the Common Stock is not listed or
admitted to trading on Nasdaq SmallCap Market System, on any national
securities exchange on which the Common Stock is listed or admitted to
trading or, if the Common Stock is not quoted on the Nasdaq SmallCap Market
System or listed or admitted to trading on any national securities
exchange, the average of the closing bid and asked prices in the over-the-
counter market as furnished by any New York Stock Exchange member firm
selected from time to time by the Corporation for that purpose, or, if such
prices are not available, the fair market value set by, or in a manner
established by, the Board of Directors of the Corporation in good faith.
"Trading day" shall mean a day on which the Nasdaq SmallCap Market System
or national securities exchange used to determine the closing price is open
for the transaction of business or the reporting of trades or, if the
closing price is not so determined, a day on which the Nasdaq SmallCap
Market System is open for the transaction of business.
(v) "Marketable Stock" shall mean Common Stock or common stock of any
corporation that is the successor to all or substantially all of the
business or assets of the Corporation as a result of a Fundamental Change
(or of the ultimate parent of such successor), which is (or will, upon
distribution thereof, be) quoted or listed on the Nasdaq SmallCap Market
System, any national securities exchange or any similar system of automated
dissemination of quotations of securities prices in the United States.
(vi) "Voting Stock" means, with respect to any person, capital stock
of such person having general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees
of such person (irrespective of whether or not at the time capital stock of
any other class or classes shall have or might have voting power by reason
of the happening of any contingency).
10. Voting Rights.
(a) General. The holders of 7.5% Preferred Stock will be entitled to
100 votes per share of 7.5% Preferred Stock, subject to adjustment in accordance
with Section 7 hereof, on all matters subject to a vote of stockholders of the
Corporation, such that holders of 7.5% Preferred Stock shall have the same
voting rights as they would have if the shares of 7.5% Preferred Stock held by
them had been converted into Common Stock.
(b) Class Voting Rights. So long as any shares of 7.5% Preferred
Stock remain outstanding, the Corporation shall not, without the affirmative
vote or consent of the holders of at least 66-2/3% of all outstanding 7.5%
Preferred Stock voting separately as a class, (i) amend, alter or repeal (by
merger or otherwise) any provision of the Certificate of Incorporation or the
Bylaws of the Corporation, as amended, so as to adversely affect the relative
rights, preferences, qualifications, limitations or
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restrictions of the 7.5% Preferred Stock or the Common Stock or (ii) effect any
reclassification of the 7.5% Preferred Stock.
11. Status of Acquired Shares. Shares of 7.5% Preferred Stock
redeemed by the Corporation, received by the Corporation upon conversion
pursuant to Section 7 or Section 8 or otherwise acquired by the Corporation will
be restored to the status of authorized but unissued shares of Senior Preferred
Stock, without designation as to series, and may thereafter be issued, but not
as shares of 7.5% Preferred Stock.
12. Preemptive Rights. The 7.5% Preferred Stock is not entitled to
any preemptive or subscription rights in respect of any securities of the
Corporation.
13. Usury. It is the intention of parties hereto to conform strictly
to applicable usury laws. Accordingly, if the transactions contemplated hereby
would be usurious under applicable law (including, without limitation, the laws
of the State of Texas, the laws of the State of Delaware and the laws of the
United States of America), then, in that event, notwithstanding anything to the
contrary herein, it is agreed that the aggregate of all consideration which
constitutes interest under applicable law that is taken, reserved, contracted
for, charged or received pursuant to this Certificate of Designations or
otherwise in connection herewith shall under no circumstances exceed the maximum
amount of interest allowed by applicable law, and any excess shall be canceled
automatically and, if theretofore paid, shall be promptly refunded to the
Company or, if applicable, credited against future interest owed to a holder of
7.5% Preferred Stock.
14. Severability of Provisions. Whenever possible, each provision
hereof shall be interpreted in a manner as to be effective and valid under
applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
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IN WITNESS WHEREOF, Drypers Corporation has caused this Certificate to
be signed on its behalf by Walter V. Klemp, its Chairman of the Board and Co-
Chief Executive Officer, this 23rd day of February, 1996.
DRYPERS CORPORATION
By: /s/ Walter V. Klemp
--------------------------
Walter V. Klemp
Chairman of the Board and
Co-Chief Executive Officer
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DRYPERS CORPORATION
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
Drypers Corporation (the "Company"), a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware
("DGCL"), does hereby certify:
FIRST: That the Board of Directors of the Company, at a meeting held on
April 22, 1998, unanimously adopted resolutions proposing and declaring
advisable the following amendment to the Restated Certificate of Incorporation
of the Company and directed that such amendment be considered at the next annual
meeting of stockholders of the Company:
To amend the first paragraph of Article Fourth of the Restated Certificate
of Incorporation in its entirety to read as follows:
Fourth: The total number of shares of all classes of stock which
the Corporation shall have authority to issue is 35,000,000 of which (i)
30,000,000 shares shall be common stock, $.001 par value per share (the
"Common Stock"), and (ii) 5,000,000 shares shall be Senior Preferred Stock,
$.01 par value per share (the "Preferred Stock").
SECOND: That at the annual meeting of stockholders of the Company duly
called and held on May 21, 1998, in accordance with Section 222 of the DGCL, the
holders of at least two-thirds of the outstanding shares of Common Stock of the
Company entitled to vote on such amendment voted in favor of such amendment.
THIRD: That the aforesaid amendment was duly adopted in accordance with
the applicable provisions of Section 242 of the DGCL.
In Witness Whereof, the Company has caused this Certificate to be signed on
May 21, 1998, by Jonathan P. Foster, its Executive Vice President and Chief
Financial Officer.
DRYPERS CORPORATION
By: /s/ Jonathan P. Foster
----------------------------------------
Jonathan P. Foster
Executive Vice President and
Chief Financial Officer
Dates Referenced Herein and Documents Incorporated by Reference
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