As filed with the Securities and Exchange Commission on November 13, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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DRYPERS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 76-0344044
(State or other jurisdiction of (I.R.S Employer Identification No.)
incorporation or organization)
1415 WEST LOOP NORTH
HOUSTON, TEXAS 77055
(Address of Principal Executive Offices) (Zip Code)
DRYPERS CORPORATION AMENDED AND RESTATED 1995 KEY EMPLOYEE STOCK OPTION PLAN
DRYPERS CORPORATION 1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
DRYPERS CORPORATION EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plans)
WALTER V. KLEMP
CHAIRMAN AND CO-CHIEF EXECUTIVE OFFICER
DRYPERS CORPORATION
1415 WEST LOOP NORTH
HOUSTON, TEXAS 77055
(Name and address of agent for service)
(713) 682-6848
(Telephone number, including area code, of agent for service)
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With Copy to:
FULBRIGHT & JAWORSKI L.L.P.
1301 MCKINNEY, SUITE 5100
HOUSTON, TEXAS 77010
(713) 651-5151
ATTENTION: ROBERT F. GRAY, JR.
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED PRICE PER SHARE (1) PRICE (1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock,
$.001 par value 3,580,124 $4.9375 $17,676,862.25 $5,356.62
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and (h) under the Securities Act of 1933 and based
upon the average of the high and low sales prices of a share of Common
Stock as reported by the Nasdaq SmallCap Market on November 12, 1996.
(2) Includes an indeterminable number of shares of Common Stock issuable as a
result of the anti-dilution provisions of the stock option plans.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are hereby incorporated by reference in this
Registration Statement:
1. The Annual Report on Form 10-K of Drypers Corporation, a Delaware
corporation (the "Registrant"), for the fiscal year ended December 31, 1995;
2. The Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996;
3. The Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996;
4. All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995; and
5. The description of the Registrant's common stock, $.001 par value
(the "Common Stock"), contained in the Registrant's Registration Statement on
Form 8-A filed on February 14, 1994, including any amendment or reports filed
for the purpose of updating such description.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934 subsequent to the
date of the filing hereof and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the Common Stock is being passed upon for the
Registrant by Fulbright & Jaworski L.L.P., Houston, Texas. Certain members of
the firm of Fulbright & Jaworski L.L.P. own 8,467 shares of Common Stock and
warrants to purchase 3,376 shares of Common Stock at an exercise price of $4.00
per share.
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company has authority under Section 145 of the General
Corporation Law of the State of Delaware to indemnify its officers, directors,
employees and agents to the extent provided in such statute. Article Ninth of
the Company's Restated Certificate of Incorporation and Article IX of the
Company's Bylaws provide for indemnification of the Registrant's officers,
directors, employees and agents.
Section 102 of the General Corporation Law of the State of Delaware
permits the limitation of directors' personal liability to the corporation or
its stockholders for monetary damages for breach of fiduciary duties as a
director except for (i) any breach of the director's duty of loyalty to the
Registrant or its stockholders, (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
breaches under Section 174 of the Delaware General Corporation Law, which
relates to unlawful payments of dividends or unlawful stock repurchases or
redemptions and (iv) any transaction from which the director derived an improper
personal benefit. Article Eighth of the Registrant's Restated Certificate of
Incorporation limits a director's personal liability to the extent permitted by
the General Corporation Law of the State of Delaware. The Registrant currently
maintains directors and officers insurance.
The Registrant has entered into an indemnity agreement with each of
its officers and directors contractually obligating the Company to indemnify
such person to the fullest extent permitted by the General Corporation Law of
the State of Delaware. In connection with the recapitalization of the Registrant
on August 2, 1991, and pursuant to the Agreement and Plan of Merger dated March
22, 1991, the Registrant agreed that the indemnification obligations of the
Registrant under its Restated Certificate of Incorporation and Bylaws constitute
binding contractual obligations to each of the Registrant's officers and
directors immediately prior to the recapitalization, and that the amendment or
repeal of those provisions will not affect the rights of officers and directors
of the Registrant immediately prior to the recapitalization relating to services
occurring prior to such amendment or repeal.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
*4.1 Restated Certificate of Incorporation of Drypers Corporation, as
amended. (Filed as Exhibit 3.1 to current report on Form 8-K dated
March 1, 1996.).
*4.2 Bylaws of Drypers Corporation, as amended, dated January 21, 1994.
(Filed as Exhibit 3.2 to Form S-1 filed January 26, 1994,
Registration Statement No. 33-74436).
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<PAGE>
*4.3 Specimen 12 1/2% Series B Senior Note Certificate. (Filed as
Exhibit 4.1 to Amendment No. 1 to Form S-4 filed March 17, 1993,
Registration Statement No. 33-54810).
*4.4 Form of Common Stock Certificate. (Filed as Exhibit 4.2 to Form S-1
filed January 26, 1994, Registration Statement No. 33-74436).
*4.5 Form of Common Stock Purchase Warrant entitling the persons listed
on Schedule 4.3 to purchase an aggregate of 14,680 shares of Common
Stock. (Filed as Exhibit 4.3 to Form S-1 filed January 26, 1994,
Registration Statement No. 33-74436).
*4.6 Form of Common Stock Purchase Warrant entitling the persons listed
on Schedule 4.4 to purchase an aggregate of 24,088 shares of Common
Stock. (Filed as Exhibit 4.4 to Form S-1 filed January 26, 1994,
Registration Statement No. 33-74436).
*4.7 Form of Common Stock Purchase Warrant of the Company entitling the
persons listed on Schedule 4.5 to purchase an aggregate of 23,971
shares of Common Stock. (Filed as Exhibit 4.5 to Form S-1 filed
January 26, 1994, Registration Statement No. 33-74436).
*4.8 Form of Common Stock Purchase Warrant entitling the persons listed
on Schedule 4.6 to purchase an aggregate of 346,183 shares of Common
Stock. (Filed as Exhibit 4.6 to Form S-1 filed January 26, 1994,
Registration Statement No. 33-74436).
*4.9 Form of Common Stock Purchase Warrant entitling the persons listed
on Schedule 4.7 to purchase an aggregate of 24,995 shares of Common
Stock. (Filed as Exhibit 4.7 to Form S-1 filed January 26, 1994,
Registration Statement No. 33-74436).
*4.10 Forms of Warrants. (Filed as Exhibit 4.37 to Form S-1 Filed October
8, 1993, Registration Statement No. 33-70098).
*4.11 Form of Nonqualified Stock Option Agreement, as amended, entitling
the persons listed on Schedule 4.9 to purchase an aggregate of
125,000 shares of Common Stock. (Filed as Exhibit 4.9 to Amendment
No. 1 to Form S-1 filed February 17, 1994, Registration Statement No.
33-74436).
*4.12 Form of Nonqualified Stock Option Agreement, as amended, entitling
the persons listed on Schedule 4.10 to purchase an aggregate of
93,750 shares of Common Stock. (Filed as Exhibit 4.10 to Amendment
No. 1 to Form S-1 filed February 17, 1994, Registration Statement No.
33-74436).
*4.13 Form of Nonqualified Stock Option Agreement dated April 9, 1993,
entitling the persons listed on Schedule 4.11 to purchase an
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<PAGE>
aggregate of 71,875 shares of Common Stock. (Filed as Exhibit 4.11 to
Form S-1 filed January 26, 1994, Registration Statement No.
33-74436).
*4.14 Form of Nonqualified Stock Option Agreement dated October 1, 1992,
entitling the persons listed on Schedule 4.13 to purchase an
aggregate of 45,000 shares of Common Stock. (Filed as Exhibit 4.13 to
Form S-1 filed January 26, 1994, Registration Statement No.
33-74436).
*4.15 Form of Agreement Amending and Restating Option Agreement dated
October 1, 1992, by and among the Company, Equus II Incorporated,
Equus Capital Partners, L.P., each of the former partners of VCP,
Ltd., Davis Venture Partners, L.P., Triad Ventures II, L.P., Howard
L. Terry, the Terry Foundation, and the persons listed on Schedule
4.15. (Filed as Exhibit 4.15 to Form S-1 filed January 26, 1994,
Registration Statement No. 33-74436).
*4.16 Form of Nonqualified Stock Option Agreement dated December 31,
1993, entitling the persons listed on Schedule 4.16 to purchase an
aggregate of 31,250 shares of Common Stock. (Filed as Exhibit 4.16 to
Form S-1 filed January 26, 1994, Registration Statement No.
33-74436).
*4.17 Indenture dated as of November 10, 1992, by and among the Company,
Hygienic Products International, Inc., VRG Leasing Corporation, and
First Interstate Bank of Texas, N.A., as trustee. (Filed as Exhibit
4.29 to Form S-4 filed November 20, 1992, Registration Statement No.
33-54810).
*4.18 Warrant Agreement dated as of November 10, 1992, by and between the
Company and First Interstate Bank of Texas, N.A., as warrant agent.
(Filed as Exhibit 4.31 to Form S-4 filed November 20, 1992,
Registration Statement No. 33-54810).
*4.19 Warrant Agreement dated as of July 31, 1991, by and between the
Company and First Interstate Bank of Texas, N.A., Warrant Agent.
(Filed as Exhibit 4.16 to Form S-4 filed November 20, 1992,
Registration Statement No. 33-54810).
*4.20 2% Convertible Junior Subordinated Debenture due June 30, 1998,
issued to Randy C. Schaaf in the original principal amount of
$500,000. (Filed as Exhibit 4.32 to Form S-4 filed November 20, 1992,
Registration Statement No. 33-54810).
*4.21 Form of Investment and Stock Registration Agreement dated November
10, 1992, by and among the Company and the persons listed on Schedule
4.34 attached thereto. (Filed as Exhibit 4.34 to Form S-4 filed
November 20, 1992, Registration Statement No. 33- 54810).
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<PAGE>
*4.22 VRG Holding Corporation 1992 Incentive Stock Option Plan, as
amended. (Filed as Exhibit 10.14 to Amendment No. 1 to Form S-1 filed
February 17, 1994, Registration Statement No. 33-74436).
*4.23 VRG Holding Corporation 1991 Nonqualified Stock Option Plan. (Filed
as Exhibit 10.15 to Form S-4 filed November 20, 1992, Registration
Statement No. 33-54810).
*4.24 Form of 12% Junior Subordinated Debenture due June 30, 1998, in the
aggregate principal amount of $2,400,000 issued to the persons listed
on Schedule 10.29. (Filed as Exhibit 10.29 to Form S-4 filed November
20, 1992, Registration Statement No. 33-54810).
*4.25 Drypers 401(k) Plan (filed as Exhibit 10.25 to Amendment No. 1 to
Form S-1 filed February 17, 1994, Registration Statement No. 33-
74436).
*4.26 Memorandum of Preferred Stock Purchase Agreement dated July 31,
1994, by and among Drypers Corporation, Seler S.A., Ricardo Marcelo
Albamonte and Alfred Garcia Bernal (Filed as Exhibit 10.1 to Form
10-Q filed August 15, 1994, Commission Filed No. 0- 23422).
*4.27 Drypers Corporation 1995 Key Employee Stock Option Plan (Filed as
Exhibit 10.1 to Form 10-Q filed August 4, 1995, Commission File No.
0-23422).
*4.28 Drypers Corporation 1994 Non-Employee Director Option Plan (Filed
as Exhibit 10.2 to Form 10-Q filed August 4, 1995, Commission File
No. 0-23422).
*4.29 Form of Drypers Corporation 1995 Key Employee Stock Option Plan
Nonqualified Stock Option Agreement (Filed as Exhibit 10.3 to Form
10-Q filed August 4, 1995, Commission File No. 0-23422).
*4.30 Form of Drypers Corporation 1995 Key Employee Stock Option Plan
Incentive Stock Option Agreement (Filed as Exhibit 10.4 to Form 10-Q
filed August 4, 1995, Commission File No. 0-23422).
*4.31 Loan and Security Agreement dated February 26, 1996, between
Congress Financial Corporation (Southwest) and Drypers Corporation.
(Filed as Exhibit 10.1 to Current Report on Form 8-K dated March 1,
1996).
*4.32 Second Amended and Restated Loan Agreement dated as of February 23,
1996, between Drypers Corporation and First Interstate Bank of Texas,
N.A. (Filed as Exhibit 10.2 to Current Report on Form 8-K dated March
1, 1996).
**4.33 Drypers Corporation Employee Stock Purchase Plan.
**4.34 Drypers Corporation Amended and Restated 1995 Key Employee Stock
Option Plan.
**4.35 Drypers Corporation 1996 Non-Employee Director Stock Option Plan.
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**5.1 Opinion of Fulbright & Jaworski L.L.P.
**23.1 Consent of Arthur Andersen L.L.P.
**23.2 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5.1).
**24.1 Powers of Attorney (included on Pages II-8 and II-9 of this
Registration Statement).
* Incorporated by reference to the filing indicated.
** Filed herewith.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the
most recent post-effective amendment hereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration
Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
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(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on the 13th day of November,
1996.
DRYPERS CORPORATION
By: /s/ WALTER V. KLEMP
Walter V. Klemp
Chairman and Co-Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Walter V. Klemp and Terry A. Tognietti,
or any of them, his true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same and all
exhibits thereto, and all documents in connection therewith, with the Securities
and Exchange Commission, granting said attorney-in-fact and agent, and any of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or any of them, or his or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ WALTER V. KLEMP Chairman and
Walter V. Klemp Co-Chief Executive Officer November 13, 1996
(Principal Executive Officer)
/s/ RAYMOND M. CHAMBERS Co-Chief Executive Officer
Raymond M. Chambers and Director November 13, 1996
/s/ TERRY A. TOGNIETTI Co-Chief Executive Officer
Terry A. Tognietti and Director November 13, 1996
/s/ NOLAN LEHMANN Director November 13, 1996
Nolan Lehmann
/s/ GARY L. FORBES Director November 13, 1996
Gary L. Forbes
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/s/ PHILIP A. TUTTLE Director November 13, 1996
Philip A. Tuttle
/s/ JONATHAN FOSTER Chief Financial Officer November 13, 1996
Jonathan Foster (Principal Financial Officer
and Accounting Officer)
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<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION PAGE NUMBER
- -------------- ---------------------------------------------------- -----------
Restated Certificate of Incorporation of Drypers
4.1 Corporation, as amended. (Filed as Exhibit 3.1 to
current report on Form 8-K dated March 1, 1996.).
Bylaws of Drypers Corporation, as amended, dated
4.2 January 21, 1994. (Filed as Exhibit 3.2 to Form S-1
filed January 26, 1994, Registration Statement
No. 33-74436).
Specimen 12 1/2% Series B Senior Note Certificate.
4.3 (Filed as Exhibit 4.1 to Amendment No. 1 to Form S-
4 filed March 17, 1993, Registration Statement No.
33-54810).
Form of Common Stock Certificate. (Filed as
4.4 Exhibit 4.2 to Form S-1 filed January 26, 1994,
Registration Statement No. 33-74436).
Form of Common Stock Purchase Warrant entitling
4.5 the persons listed on Schedule 4.3 to purchase an
aggregate of 14,680 shares of Common Stock. (Filed as
Exhibit 4.3 to Form S-1 filed January 26, 1994,
Registration Statement No. 33-74436).
Form of Common Stock Purchase Warrant entitling
4.6 the persons listed on Schedule 4.4 to purchase an
aggregate of 24,088 shares of Common Stock. (Filed as
Exhibit 4.4 to Form S-1 filed January 26, 1994,
Registration Statement No. 33-74436).
Form of Common Stock Purchase Warrant of the
4.7 Company entitling the persons listed on Schedule 4.5
to purchase an aggregate of 23,971 shares of Common Stock.
(Filed as Exhibit 4.5 to Form S-1 filed January 26, 1994,
Registration Statement No. 33-74436).
Form of Common Stock Purchase Warrant entitling
the persons listed on Schedule 4.6 to purchase an
4.8 aggregate of 346,183 shares of Common Stock. (Filed
as Exhibit 4.6 to Form S-1 filed January 26, 1994,
Registration Statement No. 33-74436).
Form of Common Stock Purchase Warrant entitling
the persons listed on Schedule 4.7 to purchase an
4.9 aggregate of 24,995 shares of Common Stock. (Filed
as Exhibit 4.7 to Form S-1 filed January 26, 1994,
Registration Statement No. 33-74436).
<PAGE>
Forms of Warrants. (Filed as Exhibit 4.37 to Form S-
4.10 1 Filed October 8, 1993, Registration Statement No.
33-70098).
Form of Nonqualified Stock Option Agreement, as
amended, entitling the persons listed on Schedule 4.9
4.11 to purchase an aggregate of 125,000 shares of
Common Stock. (Filed as Exhibit 4.9 to Amendment
No. 1 to Form S-1 filed February 17, 1994,
Registration Statement No. 33-74436).
Form of Nonqualified Stock Option Agreement, as
amended, entitling the persons listed on Schedule 4.10
4.12 to purchase an aggregate of 93,750 shares of Common
Stock. (Filed as Exhibit 4.10 to Amendment No. 1 to
Form S-1 filed February 17, 1994, Registration
Statement No. 33-74436).
Form of Nonqualified Stock Option Agreement dated
April 9, 1993, entitling the persons listed on
4.13 Schedule 4.11 to purchase an aggregate of 71,875
shares of Common Stock. (Filed as Exhibit 4.11 to
Form S-1 filed January 26, 1994, Registration
Statement No. 33-74436).
Form of Nonqualified Stock Option Agreement dated
October 1, 1992, entitling the persons listed on
4.14 Schedule 4.13 to purchase an aggregate of 45,000
shares of Common Stock. (Filed as Exhibit 4.13 to
Form S-1 filed January 26, 1994, Registration
Statement No. 33-74436).
Form of Agreement Amending and Restating Option Agreement
dated October 1, 1992, by and among the Company, Equus II
Incorporated, Equus Capital Partners, L.P., each of the
former partners of VCP,
4.15 Ltd., Davis Venture Partners, L.P., Triad Ventures II,
L.P., Howard L. Terry, the Terry Foundation, and the
persons listed on Schedule 4.15. (Filed as Exhibit 4.15 to
Form S-1 filed January 26, 1994, Registration Statement No.
33-74436).
Form of Nonqualified Stock Option Agreement dated December
31, 1993, entitling the persons listed on
4.16 Schedule 4.16 to purchase an aggregate of 31,250
shares of Common Stock. (Filed as Exhibit 4.16 to
Form S-1 filed January 26, 1994, Registration
Statement No. 33-74436).
<PAGE>
Indenture dated as of November 10, 1992, by and
among the Company, Hygienic Products
4.17 International, Inc., VRG Leasing Corporation, and
First Interstate Bank of Texas, N.A., as trustee. (Filed as
Exhibit 4.29 to Form S-4 filed November 20, 1992,
Registration Statement No. 33-54810).
Warrant Agreement dated as of November 10, 1992,
by and between the Company and First Interstate
4.18 Bank of Texas, N.A., as warrant agent. (Filed as
Exhibit 4.31 to Form S-4 filed November 20, 1992,
Registration Statement No. 33-54810).
Warrant Agreement dated as of July 31, 1991, by and
between the Company and First Interstate Bank of
4.19 Texas, N.A., Warrant Agent. (Filed as Exhibit 4.16 to
Form S-4 filed November 20, 1992, Registration
Statement No. 33-54810).
2% Convertible Junior Subordinated Debenture due
June 30, 1998, issued to Randy C. Schaaf in the
4.20 original principal amount of $500,000. (Filed as
Exhibit 4.32 to Form S-4 filed November 20, 1992,
Registration Statement No. 33-54810).
Form of Investment and Stock Registration
Agreement dated November 10, 1992, by and among
4.21 the Company and the persons listed on Schedule 4.34
attached thereto. (Filed as Exhibit 4.34 to Form S-4
filed November 20, 1992, Registration Statement No.
33-54810).
VRG Holding Corporation 1992 Incentive Stock
4.22 Option Plan, as amended. (Filed as Exhibit 10.14 to
Amendment No. 1 to Form S-1 filed February 17,
1994, Registration Statement No. 33-74436).
VRG Holding Corporation 1991 Nonqualified Stock
4.23 Option Plan. (Filed as Exhibit 10.15 to Form S-4 filed
November 20, 1992, Registration Statement No. 33-
54810).
Form of 12% Junior Subordinated Debenture due
June 30, 1998, in the aggregate principal amount of
4.24 $2,400,000 issued to the persons listed on Schedule
10.29. (Filed as Exhibit 10.29 to Form S-4 filed
November 20, 1992, Registration Statement No. 33-
54810).
Drypers 401(k) Plan (filed as Exhibit 10.25 to
4.25 Amendment No. 1 to Form S-1 filed February 17,
1994, Registration Statement No. 33-74436).
<PAGE>
Memorandum of Preferred Stock Purchase Agreement
dated July 31, 1994, by and among Drypers
4.26 Corporation, Seler S.A., Ricardo Marcelo Albamonte
and Alfred Garcia Bernal (Filed as Exhibit 10.1 to
Form 10-Q filed August 15, 1994, Commission Filed
No. 0-23422).
Drypers Corporation 1995 Key Employee Stock
4.27 Option Plan (Filed as Exhibit 10.1 to Form 10-Q filed
August 4, 1995, Commission File No. 0-23422).
Drypers Corporation 1994 Non-Employee Director
4.28 Option Plan (Filed as Exhibit 10.2 to Form 10-Q filed
August 4, 1995, Commission File No. 0-23422).
Form of Drypers Corporation 1995 Key Employee
4.29 Stock Option Plan Nonqualified Stock Option
Agreement (Filed as Exhibit 10.3 to Form 10-Q filed
August 4, 1995, Commission File No. 0-23422).
Form of Drypers Corporation 1995 Key Employee
4.30 Stock Option Plan Incentive Stock Option Agreement
(Filed as Exhibit 10.4 to Form 10-Q filed August 4,
1995, Commission File No. 0-23422).
Loan and Security Agreement dated February 26,
1996, between Congress Financial Corporation
4.31 (Southwest) and Drypers Corporation. (Filed as
Exhibit 10.1 to Current Report on Form 8-K dated
March 1, 1996).
Second Amended and Restated Loan Agreement dated
as of February 23, 1996, between Drypers Corporation
4.32 and First Interstate Bank of Texas, N.A. (Filed as
Exhibit 10.2 to Current Report on Form 8-K dated
March 1, 1996).
4.33 Drypers Corporation Employee Stock Purchase Plan.
4.34 Drypers Corporation Amended and Restated 1995 Key Employee Stock
Option Plan.
4.35 Drypers Corporation Non-Employee Director Stock Option Plan.
5.1 Opinion of Fulbright & Jaworski L.L.P.
23.1 Consent of Arthur Andersen L.L.P.
23.2 Consent of Fulbright & Jaworski L.L.P. (included in
Exhibit 5.1).
24.1 Powers of Attorney (included on Pages II-8 and II-9 of
this Registration Statement).
EXHIBIT 4.33
DRYPERS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
January 1, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
1. Definitions............................................................ 1
2. Eligibility............................................................ 2
3. Sources of Cash........................................................ 2
4. Application of Cash.................................................... 3
5. No Addition to Account of Shares of Common Stock....................... 3
6. Purchase of Plan Shares................................................ 3
7. Statements............................................................. 4
8. Expenses............................................................... 4
9. Tax Matters............................................................ 4
10. Stock Dividends and Splits............................................. 4
11. Tender or Exchange Offer............................................... 4
12. Voting of Plan Shares.................................................. 5
13. Sale of Plan Shares.................................................... 5
14. Termination and Withdrawal by Participant.............................. 5
15. Amendments............................................................. 6
16. Notices................................................................ 6
17. Limitation on Administrator's Liability................................ 7
18. Transfer; Assignment................................................... 7
19. Effect of Financial Hardship Distribution.............................. 7
20. Governing Law.......................................................... 7
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DRYPERS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
The following terms and provisions constitute Drypers Corporation Employee Stock
Purchase Plan ("Plan") as approved by Drypers Corporation and in effect as of
January 1, 1997.
1. DEFINITIONS.
A. "Account" means an account under the Plan established by the
Administrator for each Participant.
B. "Active Employee" means an employee of Drypers or any of its
subsidiaries who has been employed for at least 90 consecutive days.
C. "Administrator" means ChaseMellon Shareholders Services L.L.C., or such
other administrator as Drypers in its discretion may approve from time
to time after the Effective Date.
D. "Base Compensation" means an Active Employee's regular compensation and
is computed as follows: (1) For an Active Employee paid on an hourly
basis, 2080 hours times his or her hourly rate and (2) For an Active
Employee paid a salary on a bi-weekly basis, 26 times his or her
bi-weekly salary.
E. "Code" means the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
F. "Commission" means the United States Securities and Exchange Commission.
G. "Common Stock" means shares of the Common Stock of Drypers, $.001 par
value per share.
H. "Drypers" means Drypers Corporation.
I. "Drypers Contribution" means amounts contributed to the Plan by Drypers
on behalf of a Participant in an amount equal to 15% of each
Participant's contributions for the calendar year. A Participant's
aggregate contributions for each calendar year may not exceed 25% of the
Participant's Base Compensation for that calendar year.
J. "Effective Date" means January 1, 1997.
K. "Entry Date" to begin payroll deductions to purchase Common Stock under
this Plan means the January 1 or July 1 coincident with or following a
Participant's eligibility under Section 2. A participant may change the
amount of payroll deduction as of any subsequent Entry Date but may stop
any withholding upon notice to Drypers. An eligible Participant may make
a contribution to purchase stock under this Plan at any
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time with a personal or cashier's check (subject to the annual aggregate
25% of Base Compensation limitation).
L. "Participant" means an individual who satisfies the eligibility
requirements set forth in Section 2 of the Plan.
M. "Plan" means Drypers Corporation Employee Stock Purchase Plan.
N. "Plan Shares" means shares of Drypers Common Stock, $.001 par value per
share.
O. "Statement" means a statement prepared by the Administrator and mailed
to a Participant summarizing the transactions in the Participant's
Account.
P. "Withholding Authorization" means a payroll withholding authorization.
2. ELIGIBILITY. To participate in the Plan, an individual:
A. Must be an Active Employee as defined in this Plan;
B. Must submit a completed Plan Enrollment and Payroll Withholding
Authorization form to the Human Resources Department on or before the
Entry Date for the period in which the individual wishes to begin to
participate by purchase of Common Stock through payroll deduction,
authorizing Drypers to make the payroll deductions specified by the
employee, subject to any minimum and maximum deduction set by Drypers
under this Plan; and
C. May purchase Common Stock by personal or cashier's check as provided in
this Plan by submitting the check and a completed form as required by
Drypers.
3. SOURCES OF CASH. The Administrator shall establish an Account as agent for
each Participant and shall credit the cash received in accordance with the
terms of the Plan, from the following sources of cash for the purchase of
Plan Shares for each Participant's Account:
A. Employee payroll deductions elected by the Participant;
B. Drypers Contributions which shall be made on behalf of the Participant;
C. Personal check or cashier's check provided by the Participant; and
D. Cash dividends received from Drypers on all Plan Shares in a
Participant's Account at the time a dividend is paid.
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The minimum payroll deduction contribution that a Participant may make to
his Account is $10.00 per pay period. The minimum direct contribution a
Participant may make by personal or cashier's check is $100.00. The maximum
aggregate contribution that a Participant may make to his or her Account per
calendar year to purchase Common Stock is 25% of his or her Base
Compensation, or such other amounts as Drypers in its sole discretion may
determine after the Effective Date.
4. APPLICATION OF CASH. The Administrator will apply the cash credited to the
Participant's Account under Section 3 to the purchase of full and fractional
Plan Shares and will credit them to the Participant's Account. In making
these purchases, the Administrator may commingle the cash credited to all
Participant's Accounts. The price at which the Administrator is deemed to
have acquired Plan Shares for a Participant's Account will be the average
price, excluding trading and other costs of purchase, of all Plan Shares
purchased by the Administrator for all Participants in the Plan during the
calendar month. The Administrator will make reasonable efforts to apply the
cash described in Section 3 that it receives as agent for the Participant to
the purchase of Plan Shares on or promptly after the first business day of
the following month after receipt by the Administrator, except as described
in Section 6. Dividends received on Plan Shares and other amounts of cash
credited to the Account will be aggregated with the employee payroll
deductions and amounts contributed by Drypers received during the calendar
month and applied to the purchase of Plan Shares.
5. NO ADDITION TO ACCOUNT OF SHARES OF COMMON STOCK. Participants may not add
any shares of Drypers Common Stock held in their name to their Account.
6. PURCHASE OF PLAN SHARES. The Administrator will purchase Plan Shares in
negotiated transactions or on any securities exchange or other securities
trading facility where Drypers Common Stock is traded from time to time. The
purchases will be on terms as to price, delivery and other matters, and will
be executed through those brokers or dealers, as the Administrator may
determine. Under certain circumstances, observance of the rules and
regulations of the Commission or applicable securities exchange or other
securities trading facility may require temporary suspension of purchases by
the Administrator or may require that a purchase be spread over a longer
period than indicated in Section 4. In that event, purchases will be made or
resumed when permitted by the rules and regulations of the Commission or
applicable securities exchange or other securities trading facility; and the
Administrator will not be accountable for its inability to make all
purchases within the applicable period. If any Commission, securities
exchange or other securities trading facility suspension of trading in
Drypers Common Stock remains effective for 90 consecutive days, the
Administrator will remit to each Participant, promptly after the end of the
period, all cash in the Participant's Account attributable to the
Participant's payroll deductions and cash dividends paid to all Drypers
shareholders during such period.
7. STATEMENTS. As soon as practicable after the end of each calendar month, the
Administrator will provide a Statement to each Participant summarizing the
transactions in the Participant's Account since the last Statement. The
Administrator will hold the Plan Shares of all Participants in its name or
in the name of its nominee. Subject to the holding period requirement of
Section 13, no certificate representing Plan Shares purchased for a
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Participant's Account will be issued to the Participant unless he or she
makes a request in writing or until his or her Account is terminated and he
or she makes the election described in Section 13. Certificates will not be
issued for less than 10 shares unless the Account is terminated. The
participant is responsible for all costs and charges related to the
preparation and issuance of certificates representing Plan Shares except in
the case of certificates issued upon termination of such participant's
Account.
8. EXPENSES. Drypers will pay the service charges, trading fees, costs of
mailing and other charges incurred in connection with the purchase of Plan
Shares.
9. TAX MATTERS. Each Participant is responsible for all taxes (whether local,
state or federal) due because of the Drypers Contributions, because of the
payment of a dividend or because of the sale of Plan Shares credited to him
or her. The Administrator will timely prepare and forward to the United
States Internal Revenue Service, the appropriate state and local authorities
and the Participants the information returns required by the Code and all
state statutes. All Drypers Contributions will constitute taxable income to
the Participant to whose Account they are credited, are subject to
applicable federal and state income and payroll tax withholding, and will be
reported to the United States Internal Revenue Service on the Participant's
Form W-2 as taxable earnings.
10. STOCK DIVIDENDS AND SPLITS. Any stock dividends and any shares received as a
result of a stock split on any Plan Shares accumulated in a Participant's
Account will, when received by the Administrator, be credited to the
Participant's Account.
11. TENDER OR EXCHANGE OFFER. If a tender offer or exchange offer is commenced
for Drypers Common Stock, the Administrator, upon receipt of information
with respect thereto as the holder of record of the Plan Shares, will either
(i) forward, or arrange for the forwarding of, information provided by the
offeror to holders of record of Drypers Common Stock to each Participant or
(ii) provide to the offeror the name and mailing address of each Participant
as reflected on the records of the Administrator with instructions to mail
such material to each Participant. The Administrator will tender all or part
of a Participant's Plan Shares in response to written instructions from the
Participant in such form as the Administrator may reasonably require and
only if such instructions are received by the Administrator at least five
days (or such shorter period as may be required by law) prior to the
termination of the offer. Unless the Administrator has received instructions
in accordance with the previous sentence, it will not tender a Participant's
Plan Shares. Except to the extent disclosure is required to tender Plan
Shares pursuant to proper written instructions, the Administrator will
maintain the confidentiality of a Participant's election to tender or not
tender Plan Shares.
12. VOTING OF PLAN SHARES. The Administrator will vote the Participant's Plan
Shares as instructed by the Participant on a form to be furnished by and
returned to the Administrator at least five days (or such shorter period as
the law may require) before the meeting at which such Plan Shares are to be
voted. The Administrator will not vote Plan Shares for which no instructions
are received.
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13. SALE OF PLAN SHARES. A Participant may request that the Administrator sell
all or any part of his or her Plan Shares, at any time after such Plan
Shares have been held in his or her Account for at least two complete
calendar quarters. A Participant who wishes to sell any part of his or her
Plan Shares may do so by giving notice to the Human Resources Department,
which will inform the Administrator of the Participant's election to sell
Plan Shares within five business days of the receipt of a notice from the
Participant. Upon receipt of the notice, the Administrator, as the
Participant's agent, will sell the number of Plan Shares specified in the
Participant's notice within five business days of receipt by the
Administrator of instructions to sell the Plan Shares, and will deliver to
the Participant the proceeds of the sale, less a handling charge, trading
fees, and other costs of sale. Whole and fractional shares may be aggregated
and sold with those of other Participants, in which case the proceeds for
each Participant will be based on the average sales price of all shares
aggregated and sold. Any sale may, but need not, be made by purchase for
other Accounts, in which case the price will be the mean of the high and low
selling price of Drypers Common Stock as reported by the principal stock
exchange or the inter-dealer quotation system on which the stock is traded
on the date of receipt by the Administrator of the notice of the
Participant's desire to sell Plan Shares or, if the stock is not traded on
the date of receipt, the mean on the next prior date that it was so traded.
Any fractional shares that are not sold will be paid for in cash at a price
equal to the mean of the high and low selling prices of Drypers Common Stock
as reported by the principal stock exchange or inter-dealer quotation system
on which Drypers Common Stock is traded on the date of receipt by the
Administrator of the notice of the Participant's desire to sell Plan Shares
or, if the stock is not traded on the date of receipt, the mean on the next
prior date that it was traded. If a Participant elects to sell all of his or
her Plan Shares, that Participant will be deemed to have terminated
participation in the Plan, and the provisions of Section 15 will apply.
14. TERMINATION AND WITHDRAWAL BY PARTICIPANT. Participation in the Plan may be
terminated by a Participant at any time by giving notice to the Human
Resources Department. Drypers will inform the Administrator of any
Participant's election to terminate participation within five business days
of the receipt by Drypers of the notice from the Participant. As soon as
practicable following receipt of the notice, unless a Participant makes a
contrary election in written response to the Administrator's notice of his
Account, the Administrator will send to the terminating Participant at no
charge a certificate or certificates representing the full Plan Shares
accumulated in his Account and a check for the net proceeds of any
fractional share in his Account. If a Participant elects to terminate, he
may not rejoin the Plan until the next Entry Date following six months from
the date of the termination. In any case of termination, the Administrator
will, if the Participant elects, sell, as the Participant's agent, all or
part of the Participant's shares within five business days of receipt by the
Administrator of instructions to sell his or her Plan Shares, and will
deliver to him or her the proceeds of the sale, less a handling charge,
trading fees, and other costs of sale; provided that the Administrator may
not sell any Plan Shares if they have not yet been held in the Participant's
Account for at least two complete calendar quarters, the satisfaction of
such holding period to be determined and confirmed by Drypers. Whole and
fractional shares may be aggregated and sold with those of other
Participants, in which case the proceeds for each Participant will be based
on the average sales price of all shares aggregated and sold. Any sale may,
but need not, be made by purchase for other Accounts in which case the price
will be the mean of the high and low selling price of Drypers
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Common Stock as reported by the principal stock exchange or inter-dealer
quotation system on which the stock is traded on the date of receipt by the
Administrator of the notice of termination or, if the stock is not traded on
the date of receipt, the mean on the next prior date that it was so traded.
On termination, fractional shares accumulated in a Participant's Account
which are not aggregated and sold will be paid for in cash at a price equal
to the mean of the high and low selling prices of Drypers Common Stock as
reported by the principal stock exchange or inter-dealer quotation system on
which Drypers Common Stock is traded on the date of receipt by the
Administrator of the notice of termination or, if the stock is not traded on
the date of receipt, the mean on the next prior date that it was traded.
15. AMENDMENTS. Drypers may, with the consent of the Administrator, amend this
Plan. Drypers may remove the Administrator and appoint a new Administrator,
or terminate the Plan, by giving the Administrator 30 days written notice of
such action. The Administrator may resign as Administrator under this Plan
by giving Drypers 90 days written notice of its resignation. In any case,
the Administrator and Drypers will cause a notice of the action to be mailed
to each Participant. No action shall have a retroactive effect that would
prejudice the interests of the Participants. The terms and conditions of
this Plan as in effect on the effective date of the appointment of, and
acceptance by, a successor Administrator shall be binding upon such
successor.
16. NOTICES. Any notice, instruction, request, election or direction which, by
any provision of the Plan, is required or permitted to be given or made by a
Participant to the Administrator must be in writing and should be given to
the Human Resources Department, Drypers Corporation, 1415 West Loop North,
Houston, Texas 77055, which will provide the Administrator with the notice,
instruction, request, election or direction within five business days of its
receipt. Any notice, instruction, request, election or direction intended
for the Administrator will be deemed to be given or made when received by
the Administrator. If a Participant wishes to contact the Administrator
directly, he may do so by prepaid postage mail addressed to Drypers
Corporation Employee Stock Purchase Plan, c/o ChaseMellon Shareholder
Services, Four Station Square, Commerce Court, 3rd Floor, Pittsburgh,
Pennsylvania 15219. Any notice or certificate which, by any provision of the
Plan, is required or permitted to be given by the Administrator to a
Participant, must be in writing and will be deemed to have been given or
made when received by the Participant, or five business days after it has
been mailed to the Participant's address as it last appears on the
Administrator's records.
17. LIMITATION ON ADMINISTRATOR'S LIABILITY. The Administrator will not be
liable for any action which is in compliance with the terms and conditions
of this Plan taken or omitted in good faith, including without limitation,
any claim of liability:
A. Arising out of failure to terminate a Participant's Account upon the
Participant's death or otherwise prior to the receipt of written notice
of the event causing termination, accompanied by documentation deemed
satisfactory by the Administrator;
B. With respect to the prices at which Plan Shares are purchased or Plan
Shares or Rights are sold for a Participant's Account and the timing and
terms on which the purchase or sale is made; or
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C. For the market value, or any fluctuation in the market value, after
purchase of the Plan Shares or sale of Plan Shares or Rights for a
Participant's Account.
18. TRANSFER; ASSIGNMENT. Except as is expressly provided in this Plan, no
Participant may sell, pledge, hypothecate or otherwise assign or transfer
his Account, any interest in his Account or any cash or stock credited to
his Account. Any attempt to sell, pledge, hypothecate, assign or transfer
his Account, any interest in his Account or any cash or stock credited to
his Account will be void.
19. EFFECT OF FINANCIAL HARDSHIP DISTRIBUTION. A Participant who receives a
financial hardship distribution from a qualified cash or deferred
arrangement described in Section 401(k) of the Code that is maintained by
Drypers or any of its affiliates may not contribute to the Plan for a period
of 12 months after receipt of the financial hardship distribution. The
Participant must submit a new Withholding Authorization to the Human
Resources Department in order to recommence contributions to the Plan by
payroll deductions after he or she has received the financial hardship
distribution.
20. GOVERNING LAW. The Withholding Authorization and this Plan and its operation
shall be governed by and construed in accordance with the laws of the State
of Texas.
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EXHIBIT 4.34
DRYPERS CORPORATION
AMENDED AND RESTATED 1995 KEY EMPLOYEE
STOCK OPTION PLAN
Originally Adopted May 26, 1995
Amended and Restated August 18, 1995
<PAGE>
DRYPERS CORPORATION
1995 KEY EMPLOYEE STOCK OPTION PLAN
TABLE OF CONTENTS
SECTION
ARTICLE I - PLAN
Purpose...............................................................1.1
Effective Date of Plan................................................1.2
ARTICLE II - DEFINITIONS
Affiliate.............................................................2.1
Board of Directors....................................................2.2
Code..................................................................2.3
Committee.............................................................2.4
Company...............................................................2.5
Disinterested Person..................................................2.6
Employee..............................................................2.7
Fair Market Value.....................................................2.8
Incentive Option......................................................2.9
Nonqualified Option..................................................2.10
Option...............................................................2.11
Option Agreement.....................................................2.12
Outside Director.....................................................2.13
Plan.................................................................2.14
Stock................................................................2.15
10% Stockholder......................................................2.16
ARTICLE III - ELIGIBILITY
ARTICLE IV - GENERAL PROVISIONS RELATING TO OPTIONS
Authority to Grant Options............................................4.1
Dedicated Shares......................................................4.2
Non-Transferability...................................................4.3
Requirements of Law...................................................4.4
Changes in the Company's Capital Structure............................4.5
Election Under Section 83(b) of the Code..............................4.6
ARTICLE V - OPTIONS
Type of Option........................................................5.1
Option Price..........................................................5.2
Duration of Options...................................................5.3
0352793.06
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Amount Exercisable--Incentive Options.................................5.4
Exercise of Options...................................................5.5
Exercise on Termination of Employment.................................5.6
Substitution Options..................................................5.7
No Rights as Stockholder..............................................5.8
ARTICLE VI - ADMINISTRATION
ARTICLE VII - AMENDMENT OR TERMINATION OF PLAN
ARTICLE VIII - MISCELLANEOUS
No Establishment of a Trust Fund......................................8.1
No Employment Obligation..............................................8.2
Forfeiture ...........................................................8.3
Tax Withholding.......................................................8.4
Written Agreement.....................................................8.5
Indemnification of the Committee and the
Board of Directors..................................................8.6
Gender................................................................8.7
Headings..............................................................8.8
Other Compensation Plans..............................................8.9
Other Options or Awards..............................................8.10
Governing Law........................................................8.11
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ARTICLE I
PLAN
1.1 PURPOSE. This Plan is a plan for key employees (including
officers and employee directors and consultants) of the Company and its
Affiliates and is intended to advance the best interests of the Company, its
Affiliates, and its stockholders by providing those persons who have substantial
responsibility for the management and growth of the Company and its Affiliates
with additional incentives and an opportunity to obtain or increase their
proprietary interest in the Company, thereby encouraging them to continue in the
employ of the Company or any of its Affiliates.
1.2 EFFECTIVE DATE OF PLAN. This Plan is effective August 18,
1995 if within one year of that date it shall have been approved by at least a
majority vote of stockholders voting in person or by proxy at a duly held
stockholders' meeting, or if the provisions of the Company's Certificate of
Incorporation or By-laws or applicable state law prescribes a greater degree of
stockholder approval for this action, the approval by the holders of that
percentage, at a duly held meeting of stockholders. No Incentive Option or
Nonqualified Option shall be granted pursuant to this Plan after May 26, 2005.
ARTICLE II
DEFINITIONS
The words and phrases defined in this Article shall have the
meaning set out in these definitions throughout this Plan, unless the context in
which any such word or phrase appears reasonably requires a broader, narrower,
or different meaning.
2.1 "AFFILIATE" means any parent corporation and any subsidiary
corporation. The term "parent corporation" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if, at the
time of the action or transaction, each of the corporations other than the
Company owns stock possessing more than 50% of the total combined voting power
of all classes of stock in one of the other corporations in the chain. The term
"subsidiary corporation" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of the
action or transaction, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing more than 50% of the total combined
voting power of all classes of stock in one of the other corporations in the
chain.
2.2 "BOARD OF DIRECTORS" means the board of directors of the
Company.
2.3 "CODE" means the Internal Revenue Code of 1986, as amended.
2.4 "COMMITTEE" means the Compensation Committee of the Board of
Directors or such other committee designated by the Board of Directors. The
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Committee shall be comprised of members who are Disinterested Persons and
Outside Directors and in no event less than two in number.
2.5 "COMPANY" means Drypers Corporation, a Delaware corporation.
2.6 "DISINTERESTED PERSON" means a "disinterested person" as that
term is defined in Rule 16b-3 under the Securities Exchange Act of 1934.
2.7 "EMPLOYEE" means a person employed by the Company or any
Affiliate to whom an Option is granted.
2.8 "FAIR MARKET VALUE" of the Stock as of any date means (a) the
closing price on that date on the principal securities exchange on which the
Stock is listed; or (b) if the Stock is not listed on a securities exchange, the
closing price of the Stock on that date as reported on the Nasdaq Stock Market;
or (c) if the Stock is not listed on the Nasdaq Stock Market, the average of the
high and low bid quotations for the Stock on that date as reported by the
National Quotation Bureau Incorporated; or (d) if none of the foregoing is
applicable, an amount, at the election of the Committee equal to (x) the average
between the closing bid and ask prices per share of Stock on the last preceding
date on which those prices were reported or (y) the value of the Stock as
determined by the Committee in its sole discretion.
2.9 "INCENTIVE OPTION" means an option granted under this Plan
which is designated as an "Incentive Option" and satisfies the requirements of
Section 422 of the Code.
2.10 "NONQUALIFIED OPTION" means an option granted under this
Plan other than an Incentive Option.
2.11 "OPTION" means both an Incentive Option and a Nonqualified
Option granted under this Plan to purchase shares of Stock.
2.12 "OPTION AGREEMENT" means the written agreement that sets out
the terms of an Option.
2.13 "OUTSIDE DIRECTOR" means a member of the Board of Directors
serving on the Committee who satisfies the criteria of Section 162(m) of the
Code.
2.14 "PLAN" means the Drypers Corporation Amended and Restated
1995 Key Employee Stock Option Plan, as set out in this document and as it may
be amended from time to time.
2.15 "STOCK" means the common stock of the Company, $.001 par
value, or, in the event that the outstanding shares of common stock are later
changed into or exchanged for a different class of stock or securities of the
Company or another corporation, that other stock or security.
2.16 "10% STOCKHOLDER" means an individual who, at the time the
Option is granted, owns stock possessing more than 10% of the total combined
voting power
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of all classes of stock of the Company or of any Affiliate. An individual shall
be considered as owning the stock owned, directly or indirectly, by or for his
brothers and sisters (whether by the whole or half blood), spouse, ancestors,
and lineal descendants; and stock owned, directly or indirectly, by or for a
corporation, partnership, estate, or trust, shall be considered as being owned
proportionately by or for its stockholders, partners, or beneficiaries.
ARTICLE III
ELIGIBILITY
The individuals who shall be eligible to receive Incentive
Options and Nonqualified Options shall be those key employees of the Company or
any of its Affiliates as the Committee shall determine from time to time.
However, no member of the Committee shall be eligible to receive any Option or
to receive stock, stock options, or stock appreciation rights under any other
plan of the Company or any of its Affiliates, if to do so would cause the
individual not to be a Disinterested Person or Outside Director. The Board of
Directors may designate one or more individuals who shall not be eligible to
receive any Option under this Plan or under other similar plans of the Company.
ARTICLE IV
GENERAL PROVISIONS RELATING TO OPTIONS
4.1 AUTHORITY TO GRANT OPTIONS. The Committee may grant to those
key employees of the Company or any of its Affiliates, as it shall from time to
time determine, Options under the terms and conditions of this Plan. Subject
only to any applicable limitations set out in this Plan, the number of shares of
Stock to be covered by any Option to be granted to an employee of the Company or
any of its Affiliates shall be as determined by the Committee.
4.2 DEDICATED SHARES. The total number of shares of Stock with
respect to which Options may be granted under the Plan shall be 2,500,000
shares. The shares may be treasury shares or authorized but unissued shares. The
maximum number of shares subject to Options that may be issued to any Employee
under the Plan during each year is 500,000 shares. The number of shares stated
in this Section 4.2 shall be subject to adjustment in accordance with the
provisions of Section 4.5.
In the event that any outstanding Option shall expire or
terminate for any reason or any Option is surrendered, the shares of Stock
allocable to the unexercised portion of that Option may again be subject to an
Option under the Plan.
4.3 NON-TRANSFERABILITY. Options shall not be transferable by the
Employee otherwise than by will or under the laws of descent and distribution,
and shall be exercisable, during the Employee's lifetime, only by him.
4.4 REQUIREMENTS OF LAW. The Company shall not be required to
sell or issue any Stock under any Option if issuing that Stock would constitute
or result in
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<PAGE>
a violation by the Employee or the Company of any provision of any law, statute,
or regulation of any governmental authority. Specifically, in connection with
any applicable statute or regulation relating to the registration of securities,
upon exercise of any Option, the Company shall not be required to issue any
Stock unless the Committee has received evidence satisfactory to it to the
effect that the holder of that Option will not transfer the Stock except in
accordance with applicable law, including receipt of an opinion of counsel
satisfactory to the Company to the effect that any proposed transfer complies
with applicable law. The determination by the Committee on this matter shall be
final, binding and conclusive. The Company may, but shall in no event be
obligated to, register any Stock covered by this Plan pursuant to applicable
securities laws of any country or any political subdivision. In the event the
Stock issuable on exercise of an Option is not registered, the Company may
imprint on the certificate evidencing the Stock any legend that counsel for the
Company considers necessary or advisable to comply with applicable law. The
Company shall not be obligated to take any other affirmative action in order to
cause the exercise of an Option and the issuance of shares thereunder, to comply
with any law or regulation of any governmental authority.
4.5 CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Stock or its rights, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.
If the Company shall effect a subdivision or consolidation of
shares or other capital readjustment, the payment of a stock dividend, or other
increase or reduction of the number of shares of the Stock outstanding, without
receiving compensation for it in money, services or property, then (a) the
number, class, and per share price of shares of Stock subject to outstanding
Options under this Plan shall be appropriately adjusted in such a manner as to
entitle each Employee to receive upon exercise of such Employee's Options, for
the same aggregate cash consideration, the equivalent total number and class of
shares he would have received had he exercised his Options in full immediately
prior to the event requiring the adjustment; and (b) the number and class of
shares of Stock then reserved to be issued under this Plan shall be adjusted by
substituting for the total number and class of shares of Stock then reserved
that number and class of shares of Stock that would have been received by the
owner of an equal number of outstanding shares of each class of Stock as the
result of the event requiring the adjustment.
If the Company is merged or consolidated with another corporation
and the Company is not the surviving corporation, or if the Company is
liquidated or sells or otherwise disposes of substantially all its assets, while
unexercised Options remain outstanding under this Plan, (a) subject to the
provisions of clause (c) below, after the effective date of the merger,
consolidation, liquidation, sale or other disposition, as the case may be, each
holder of an outstanding Option shall be entitled, upon exercise of
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the Option, to receive, in lieu of shares of Stock, the number and class or
classes of shares of stock or other securities or property to which the holder
would have been entitled if, immediately prior to the merger, consolidation,
liquidation, sale or other disposition, the holder had been the holder of record
of a number of shares of Stock equal to the number of shares as to which the
Option shall be so exercised; (b) all Options, immediately prior to the
effective date of the merger, consolidation, liquidation, sale or other
disposition, as the case may be, shall be exercisable in full; and (c) all
outstanding Options may be canceled by the Board of Directors as of the
effective date of any merger, consolidation, liquidation, sale or other
disposition, if (i) notice of cancellation shall be given to each holder of an
Option and (ii) each holder of an Option shall have the right to exercise that
Option in full (without regard to any limitations set out in or imposed under
this Plan or the Option Agreement granting such Option) during a period set by
the Board of Directors preceding the effective date of the merger,
consolidation, liquidation, sale or other disposition and, if in the event all
outstanding Options may not be exercised in full under applicable securities
laws without registration of the shares of Stock issuable on exercise of the
Options, the Board of Directors may limit the exercise of the Options to the
number of shares of Stock, if any, as may be issued without registration. The
method of choosing which Options may be exercised, and the number of shares of
Stock for which Options may be exercised, shall be solely within the discretion
of the Board of Directors.
The issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services either upon direct sale or upon the exercise of rights
or warrants to subscribe for them, or upon conversion of shares or obligations
of the Company convertible into shares or other securities, shall not affect,
and no adjustment by reason of such issuance shall be made with respect to, the
number, class, or price of shares of Stock then subject to outstanding Options.
4.6 ELECTION UNDER SECTION 83(B) OF THE CODE. No Employee shall
exercise the election permitted under Section 83(b) of the Code without written
approval of the Committee. Any Employee doing so shall forfeit all Options
issued to him under this Plan.
ARTICLE V
OPTIONS
5.1 TYPE OF OPTION. The Committee shall specify whether a given
Option shall constitute an Incentive Option or a Nonqualified Option.
5.2 OPTION PRICE. The price at which Stock may be purchased under
an Incentive Option shall not be less than the greater of: (a) 100% of the Fair
Market Value of the shares of Stock on the date the Option is granted or (b) the
aggregate par value of the shares of Stock on the date the Option is granted.
The Committee in its discretion may provide that the price at which shares of
Stock may be purchased under an Incentive Option shall be more than 100% of Fair
Market Value. In the case of any 10% Stockholder, the price at which shares of
Stock may be purchased under an
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Incentive Option shall not be less than 110% of the Fair Market Value of the
Stock on the date the Incentive Option is granted.
The price at which shares of Stock may be purchased under a
Nonqualified Option shall not be less than the greater of: (a) 80% of the Fair
Market Value of the shares of Stock on the date the Option is granted or (b) the
aggregate par value of the shares of Stock on the date the Option is granted.
The Committee in its discretion may provide that the price at which shares of
Stock may be purchased under a Nonqualified Option shall be more than 100% of
Fair Market Value.
5.3 DURATION OF OPTIONS. No Option shall be exercisable after the
expiration of 10 years from the date the Option is granted. In the case of a 10%
Stockholder, no Incentive Option shall be exercisable after the expiration of
five years from the date the Incentive Option is granted.
5.4 AMOUNT EXERCISABLE--INCENTIVE OPTIONS. Each Option may be
exercised from time to time, in whole or in part, in the manner and subject to
the conditions the Committee, in its sole discretion, may provide in the Option
Agreement, as long as the Option is valid and outstanding, provided that no
Option may be exercisable within six (6) months of the date of grant, except to
the extent that vesting is accelerated pursuant to Section 4.5 of this Plan, in
which case the Option may be exercisable immediately upon such vesting. To the
extent that the aggregate Fair Market Value (determined as of the time an
Incentive Option is granted) of the Stock with respect to which Incentive
Options first become exercisable by the Optionee during any calendar year (under
this Plan and any other incentive stock option plan(s) of the Company or any
Affiliate) exceeds $100,000, the Incentive Options shall be treated as
Nonqualified Options. In making this determination, Incentive Options shall be
taken into account in the order in which they were granted.
5.5 EXERCISE OF OPTIONS. Each Option shall be exercised by the
delivery of written notice to the Committee setting forth the number of shares
of Stock with respect to which the Option is to be exercised, together with: (a)
cash, certified check, bank draft, or postal or express money order payable to
the order of the Company, (b) Stock at its Fair Market Value on the date of
exercise, and/or (c) any other form of payment which is acceptable to the
Committee, in each case for an amount equal to the exercise price of such
shares, and specifying the address to which the certificates for such shares are
to be mailed. As promptly as practicable after receipt of written notification
and payment, the Company shall deliver to the Employee certificates for such
shares, issued in the Employee's name. If shares of Stock are used in payment of
the exercise price, the aggregate Fair Market Value of the shares of Stock
tendered must be equal to or less than the aggregate exercise price of the
shares being purchased upon exercise of the Option, and any difference must be
paid by cash, certified check, bank draft or postal or express money order
payable to the Company. Delivery of the shares shall be deemed effected for all
purposes when a stock transfer agent of the Company shall have deposited the
certificates in the United States mail, addressed to the Employee, at the
address specified by the Employee in his notice of exercise.
Whenever an Option is exercised by exchanging shares of Stock
owned by the Employee, the Employee shall deliver to the Company certificates
registered in the
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name of the Employee representing a number of shares of Stock legally and
beneficially owned by the Employee, free of all liens, claims, and encumbrances
of every kind, accompanied by stock powers duly endorsed in blank by the record
holder of the shares represented by the certificates, (with signature guaranteed
by a commercial bank or trust company or by a brokerage firm having a membership
on a registered national stock exchange). The delivery of certificates upon the
exercise of Options is subject to the condition that the person exercising the
Option provide the Company with the information the Company might reasonably
request pertaining to exercise, sale or other disposition of an Option.
5.6 EXERCISE ON TERMINATION OF EMPLOYMENT. Unless it is expressly
provided otherwise in the Option Agreement, Options shall terminate one day less
than three months after severance of employment of the Employee from the Company
and all Affiliates for any reason, with or without cause, other than death,
retirement under the then established rules of the Company, or severance for
disability. Whether authorized leave of absence or absence on military or
government service shall constitute severance of the employment of the Employee
shall be determined by the Committee at that time.
In determining the employment relationship between the Company
and the Employee, employment by any Affiliate shall be considered employment by
the Company, as shall employment by a corporation issuing or assuming a stock
option in a transaction to which Section 424(a) of the Code applies, or by a
parent corporation or subsidiary corporation of the corporation issuing or
assuming a stock option (and for this purpose, the phrase "corporation issuing
or assuming a stock option" shall be substituted for the word "Company" in the
definitions of parent corporation and subsidiary corporation in Section 2.1, and
the parent-subsidiary relationship shall be determined at the time of the
corporate action described in Section 424(a) of the Code).
DEATH. If, before the expiration of an Option, the Employee,
whether in the employ of the Company or after he has retired or was severed for
disability, dies, the Option shall continue until the earlier of the Option's
expiration date or one year following the date of his death, unless it is
expressly provided otherwise in the Option Agreement. After the death of the
Employee, his executors, administrators or any persons to whom his Option may be
transferred by will or by the laws of descent and distribution shall have the
right, at any time prior to the Option's expiration or termination, whichever is
earlier, to exercise it, to the extent to which he was entitled to exercise it
immediately prior to his death, unless it is expressly provided otherwise in the
Option Agreement.
RETIREMENT. If, before the expiration of an Incentive Option, the
Employee shall be retired in good standing from the employ of the Company under
the then established rules of the Company, the Incentive Option shall terminate
on the earlier of the Option's expiration date or one day less than three months
after his retirement. Unless it is expressly provided otherwise in the Option
Agreement, if before the expiration of a Nonqualified Option, the Employee shall
be retired in good standing from the employ of the Company under the then
established rules of the Company, the Nonqualified Option shall terminate on the
earlier of the Nonqualified Option's expiration date or one day less than one
year after his retirement. In the event of
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<PAGE>
retirement, the Employee shall have the right prior to the termination of the
Option to exercise the Option, to the extent to which he was entitled to
exercise it immediately prior to his retirement, unless it is expressly provided
otherwise in the Option Agreement.
DISABILITY. If, before the expiration of an Option, the Employee
shall be severed from the employ of the Company for disability, the Option shall
terminate on the earlier of the Option's expiration date or one day less than
one year after the date he was severed because of disability, unless it is
expressly provided otherwise in the Option Agreement. In the event that the
Employee shall be severed from the employ of the Company for disability, the
Employee shall have the right prior to the termination of the Option to exercise
the Option, to the extent to which he was entitled to exercise it immediately
prior to his severance of employment for disability, unless it is expressly
provided otherwise in the Option Agreement.
5.7 SUBSTITUTION OPTIONS. Options may be granted under this Plan
from time to time in substitution for stock options held by employees of other
corporations who are about to become employees of or affiliated with the Company
or any Affiliate as the result of a merger or consolidation of the employing
corporation with the Company or any Affiliate, or the acquisition by the Company
or any Affiliate of the assets of the employing corporation, or the acquisition
by the Company or any Affiliate of stock of the employing corporation as the
result of which it becomes an Affiliate of the Company. The terms and conditions
of the substitute Options granted may vary from the terms and conditions set out
in this Plan to the extent the Committee, at the time of grant, may deem
appropriate to conform, in whole or in part, to the provisions of the stock
options in substitution for which they are granted.
5.8 NO RIGHTS AS STOCKHOLDER. No Employee shall have any rights
as a stockholder with respect to Stock covered by his Option until the date a
stock certificate is issued for the Stock.
ARTICLE VI
ADMINISTRATION
This Plan shall be administered by the Committee. All questions
of interpretation and application of this Plan and Options shall be subject to
the determination of the Committee. A majority of the members of the Committee
shall constitute a quorum. All determinations of the Committee shall be made by
a majority of its members. Any decision or determination reduced to writing and
signed by a majority of the members shall be as effective as if it had been made
by a majority vote at a meeting properly called and held. This Plan shall be
administered in such a manner as to permit the Options granted under it that are
designated to be Incentive Options to qualify as Incentive Options. In carrying
out its authority under this Plan, the Committee shall have full and final
authority and discretion, including but not limited to the following rights,
powers and authorities, to:
(a) determine the Employees to whom and the time or times at
which Options will be made,
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(b) determine the number of shares and the purchase price of
Stock covered in each Option, subject to the terms of this Plan,
(c) determine the terms, provisions and conditions of each
Option, which need not be identical,
(d) accelerate the time at which any outstanding Option may be
exercised,
(e) define the effect, if any, on an Option of the death,
disability, retirement, or termination of employment of the Employee,
(f) prescribe, amend and rescind rules and regulations relating
to administration of this Plan, and
(g) make all other determinations and take all other actions
deemed necessary, appropriate, or advisable for the proper administration
of this Plan.
The actions of the Committee in exercising all of the rights, powers, and
authorities set out in this Article and all other Articles of this Plan, when
performed in good faith and in its sole judgment, shall be final, conclusive and
binding on all parties.
ARTICLE VII
AMENDMENT OR TERMINATION OF PLAN
The Board of Directors of the Company may amend, terminate or
suspend this Plan at any time, in its sole and absolute discretion; provided,
however, that to the extent required to qualify this Plan under Rule 16b-3
promulgated under Section 16 of the Securities Exchange Act of 1934, as amended,
no amendment that would (a) materially increase the number of shares of Stock
that may be issued under this Plan, (b) materially modify the requirements as to
eligibility for participation in this Plan, or (c) otherwise materially increase
the benefits accruing to participants under this Plan, shall be made without the
approval of the holders of a majority of the outstanding shares of the Company's
voting stock present in person or by proxy and entitled to vote thereon;
provided further, however, that to the extent required to maintain the status of
any Incentive Option under the Code, no amendment that would (a) change the
aggregate number of shares of Stock that may be issued under Incentive Options,
(b) change the class of employees eligible to receive Incentive Options, or (c)
decrease the exercise price for Incentive Options below the Fair Market Value of
the Stock at the time it is granted, shall be made without the approval of the
holders of a majority of the outstanding shares of the Company's voting stock
present in person or by proxy and entitled to vote thereon. Subject to the
preceding sentence, the Board shall have the power to make any changes in this
Plan and in the regulations and administrative provisions under it or in any
outstanding Incentive Option as in the opinion of counsel for the Company may be
necessary or appropriate from time to time to enable any Incentive Option
granted under this Plan to continue to qualify as an incentive stock
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<PAGE>
option or such other stock option as may be defined under the Code so as to
receive preferential federal income tax treatment.
ARTICLE VIII
MISCELLANEOUS
8.1 NO ESTABLISHMENT OF A TRUST FUND. No property shall be set
aside nor shall a trust fund of any kind be established to secure the rights of
any Employee under this Plan. All Employees shall at all times rely solely upon
the general credit of the Company for the payment of any benefit which becomes
payable under this Plan.
8.2 NO EMPLOYMENT OBLIGATION. The granting of any Option shall
not constitute an employment contract, express or implied, nor impose upon the
Company or any Affiliate any obligation to employ or continue to employ any
Employee. The right of the Company or any Affiliate to terminate the employment
of any person shall not be diminished or affected by reason of the fact that an
Option has been granted to him.
8.3 FORFEITURE. Notwithstanding any other provisions of this
Plan, if during the time that an Employee holds an Option the Committee finds by
a majority vote after full consideration of the facts that the Employee, before
or after termination of his employment with the Company or an Affiliate for any
reason, (a) committed or engaged in fraud, embezzlement, theft, commission of a
felony, or proven dishonesty in the course of his employment by the Company or
an Affiliate, which conduct damaged the Company or an Affiliate, or disclosed
trade secrets of the Company or an Affiliate, or (b) participated, engaged in or
had a material, financial or other interest, whether as an employee, officer,
director, consultant, contractor, stockholder, owner, or otherwise, in any
commercial endeavor anywhere in the world where the Company conducts business
that is competitive with the business of the Company or an Affiliate without the
written consent of the Company or such Affiliate, then the Employee shall
forfeit all outstanding Options, including all exercised Options pursuant to
which the Company has not yet delivered a stock certificate. Clause (b) shall
not be deemed to have been violated solely by reason of the Employee's ownership
of stock or securities of any publicly owned corporation, if that ownership does
not result in effective control of such corporation.
The decision of the Committee as to the cause of the Employee's
discharge, the damage done to the Company or an Affiliate, and the extent of the
Employee's competitive activity shall be final. No decision of the Committee,
however, shall affect the finality of the discharge of the Employee by the
Company or an Affiliate in any manner.
8.4 TAX WITHHOLDING. The Company or any Affiliate shall be
entitled to deduct from other compensation payable to each Employee any sums
required by federal, state, or local tax law to be withheld with respect to the
grant or exercise of an Option. In the alternative, the Company may require the
Employee (or other person exercising the Option) to pay the sum directly to the
employer corporation. If the Employee (or other person exercising the Option) is
required to pay the sum directly,
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payment in cash or by check of such sums for taxes shall be delivered within 10
days after the date of exercise or lapse of restrictions. The Company shall have
no obligation upon exercise of any Option until payment has been received,
unless withholding (or offset against a cash payment) as of or prior to the date
of exercise is sufficient to cover all sums due with respect to that exercise.
The Company and its Affiliates shall not be obligated to advise an Employee of
the existence of the tax or the amount that the employer corporation will be
required to withhold.
8.5 WRITTEN AGREEMENT. Each Option shall be embodied in a written
Option Agreement which shall be subject to the terms and conditions of this Plan
and shall be signed by the Employee and by a member of the Committee on behalf
of the Committee and the Company or an executive officer of the Company, other
than the Employee, on behalf of the Company. The Option Agreement may contain
any other provisions that the Committee in its discretion shall deem advisable
which are not inconsistent with the terms of this Plan.
8.6 INDEMNIFICATION OF THE COMMITTEE AND THE BOARD OF DIRECTORS.
With respect to administration of this Plan, the Company shall indemnify each
present and future member of the Committee and the Board of Directors against,
and each member of the Committee and the Board of Directors shall be entitled
without further act on his part to indemnity from the Company for, all expenses
(including attorney's fees, the amount of judgments and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of any action, suit, or proceeding in which he
may be involved by reason of his being or having been a member of the Committee
and/or the Board of Directors, whether or not he continues to be a member of the
Committee and/or the Board of Directors at the time of incurring the
expenses--including, without limitation, matters as to which he shall be finally
adjudged in any action, suit or proceeding to have been found to have been
negligent in the performance of his duty as a member of the Committee of the
Board of Directors. However, this indemnity shall not include any expenses
incurred by any member of the Committee and/or the Board of Directors in respect
of matters as to which he shall be finally adjudged in any action, suit or
proceeding to have been guilty of gross negligence or willful misconduct in the
performance of his duty as a member of the Committee or the Board of Directors.
In addition, no right of indemnification under this Plan shall be available to
or enforceable by any member of the Committee and the Board of Directors unless,
within 60 days after institution of any action, suit or proceeding, he shall
have offered the Company, in writing, the opportunity to handle and defend same
at its own expense. This right of indemnification shall inure to the benefit of
the heirs, executors or administrators of each member of the Committee and the
Board of Directors and shall be in addition to all other rights to which a
member of the Committee and the Board of Directors may be entitled as a matter
of law, contract, or otherwise.
8.7 GENDER. If the context requires, words of one gender when
used in this Plan shall include the others and words used in the singular or
plural shall include the other.
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8.8 HEADINGS. Headings of Articles and Sections are included for
convenience of reference only and do not constitute part of this Plan and shall
not be used in construing the terms of this Plan.
8.9 OTHER COMPENSATION PLANS. The adoption of this Plan shall not
affect any other stock option, incentive or other compensation or benefit plans
in effect for the Company or any Affiliate, nor shall this Plan preclude the
Company from establishing any other forms of incentive or other compensation for
employees of the Company or any Affiliate.
8.10 OTHER OPTIONS. The grant of an Option shall not confer upon
the Employee the right to receive any future or other Options under this Plan,
whether or not Options may be granted to similarly situated Employees, or the
right to receive future Options upon the same terms or conditions as previously
granted.
8.11 GOVERNING LAW. The provisions of this Plan shall be
construed, administered, and governed under the laws of the State of Texas.
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EXHIBIT 4.35
DRYPERS CORPORATION
1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. PURPOSE. The 1996 Non-Employee Director Stock Option Plan (the
"Plan") is to benefit Drypers Corporation (the "Company") by offering its
non-employee directors (the "Eligible Directors") an opportunity to become
owners of the Common Stock, $.001 par value, of the Company (the "Stock") and is
intended to advance the best interests of the Company by increasing their
proprietary interests in the Company by increasing their proprietary interest in
the success of the Company and its subsidiary corporations.
2. ADMINISTRATION. The Plan shall be administered by the Board of
Directors of the Company (the "Board"). Subject to the terms of the Plan, the
Board shall have the power to construe the provisions of the Plan, or of options
granted hereunder (the "Options"), to determine all questions arising
thereunder, and to adopt and amend such rules and regulations for administering
the Plan as the Board deems desirable.
3. AVAILABLE SHARES. The total amount of the Stock with respect to which
Options that may be granted under this Plan shall not exceed in the aggregate
250,000 shares; provided, that the class and aggregate number of shares of Stock
with respect to which Options may be granted hereunder shall be subject to
adjustment in accordance with the provisions of Paragraph 16 hereof. Such shares
of Stock may be treasury shares or authorized but unissued shares of Stock. In
the event that any outstanding Option for any reason shall expire or is
terminated or canceled, the shares of Stock allocable to the unexercised portion
of such Option may again be subject to an Option or Options under the Plan.
4. AUTHORITY TO GRANT OPTIONS AND STOCK. All Options granted under the
Plan shall be non-qualified stock options. No Options shall be granted under the
Plan subsequent to March 29, 2006. The only Options under the Plan that may be
granted are those that are granted after both adoption of the Plan and approval
thereof by the stockholders of the Company within twelve months after the date
of such adoption, all as provided in Paragraph 19 hereof.
5. ELIGIBILITY FOR STOCK OPTIONS. Except as specifically provided below,
the individuals who shall be eligible to receive Options under the Plan shall be
Eligible Directors of the Company.
6. OPTION GRANT SIZE AND GRANT DATES.
INITIAL GRANTS -- An Option to purchase (a) 1,000 shares of Stock (as
adjusted pursuant to Paragraph 16) shall be granted to each Eligible Director,
other than Eligible Directors on the date the Plan is adopted, on the day
following the annual meeting of stockholders ("Annual Meeting") at which such
Director is first elected or the day following the first Annual Meeting after
such Eligible Director is first elected or appointed by the Board to be a
Director, whichever is applicable, and (b) 6,000 shares of Stock (as adjusted
pursuant to Paragraph 16) shall be granted to each Eligible Director on the date
the Plan is adopted, other than Eligible Directors first elected on such date
(together with those grants set forth in clause (a), hereinafter referred to as
"Initial Grants"); provided, that if an Eligible Director who previously
received an Initial Grant terminates service as a Director and is subsequently
elected or appointed to the Board, such Director shall not be eligible to
receive a second Initial Grant, but shall be eligible to receive only Annual
Grants as provided in this Paragraph 6, beginning with the Annual Meeting held
during the fiscal year immediately following the year in which such Director was
reelected or appointed. If, however, the Chairman of the Board of the Company
<PAGE>
determines, in his sole discretion following discussions with the Company's
legal counsel, that the Company is in possession of material, nonpublic
information about the Company, then the Initial Grant and Annual Grant to the
Eligible Directors shall be suspended until the second trading day after public
dissemination of such information.
ANNUAL GRANTS -- An Option to purchase 4,000 shares of Stock (as
adjusted pursuant to Paragraph 16) shall be granted to each Eligible Director as
an annual retainer fee for service as a member of the Company's Board of
Directors (each, an "Annual Grant"). Such Option shall be granted the day
following each Annual Meeting or the day following the first Annual Meeting
after such Eligible Director is first elected or appointed by the Board to be a
director, whichever is applicable. If, however, the Chairman of the Board of the
Company determines, in his sole discretion following discussions with the
Company's legal counsel, that the Company is in possession of material,
nonpublic information about the Company, then such grant shall be delayed until
the second trading day after public dissemination of such information.
7. OPTION PRICE; FAIR MARKET VALUE. The price at which shares of Stock
may be purchased by an Eligible Director pursuant to an Option (the "Optionee")
shall be the fair market value of the shares of Stock on the date the Option is
granted. For all purposes of this Plan, the "fair market value" of the Stock
shall be the mean of the highest and lowest selling prices of the Stock as
reported in THE WALL STREET JOURNAL for the last trading day before the date as
of which such fair market value is to be determined. No Option may be repriced.
8. DURATION OF OPTIONS. The term of each Option hereunder shall be ten
years, and no Option shall be exercisable after the expiration of ten years from
the date such Option is granted. An Option shall expire immediately following
the last day of which such Option is exercisable pursuant to this Paragraph 8.
9. AMOUNT EXERCISABLE.
(a) No Option shall be exercisable earlier than six months
from the date of grant.
(b) An Option becomes exercisable according to the following
schedule:
PERIOD FROM PORTION OF GRANT THAT
THE DATE THE BECOMES EXERCISABLE
OPTION IS GRANTED AFTER SUCH PERIOD
One year after grant.................... 33 1/3%
Two years after grant................... 33 1/3%
Three years after grant................. 33 1/3%
10. EXERCISE OF OPTIONS. Options shall be exercised by the delivery of
written notice to the Company setting forth the number of shares of Stock with
respect to which the Option is to be exercised, together with cash, wire
transfer, certified check, bank draft or postal or express money order payable
to the order of the Company (the "Acceptable Funds") for an amount equal to the
Option price of such shares of Stock, or at the election of the Optionee, by
exchanging shares of Stock owned by the Optionee, so long as the exchanged
shares of Stock plus Acceptable Funds paid, if any, have a total fair market
value (determined in accordance with Paragraph 7, as of the date of exercise)
equal to the purchase prices for such shares to be acquired upon exercise of
said Option, and specifying the address to which the certificates for such
shares are to be mailed. Whenever an Option is exercised by exchanging
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shares of Stock theretofore owned by the Optionee: (1) no shares of Stock
received upon exercise of that Option thereafter may be exchanged to pay the
Option price for additional shares of Stock within the following six months; and
(2) the Optionee shall deliver to the Company certificates registered in the
name of such Optionee, free of all liens, claims, and encumbrances of every
kind, accompanied by stock powers duly endorsed in blank by the record holder of
the shares represented by such certificates, with signature guaranteed by a
commercial bank or trust company or by a brokerage firm having a membership on a
registered national stock exchange. Such notice may be delivered in person to
the Secretary of the Company, or may be sent by mail to the Secretary of the
Company, in which case delivery shall be deemed made on the date such notice is
received. As promptly as practicable after receipt of such written notification
and payment, the Company shall deliver to the Optionee certificates for the
number of shares with respect to which such Option has been so exercised, issued
in the Optionee's name; provided, that such delivery shall be deemed effected
for all purposes when a stock transfer agent of the Company shall have deposited
such certificates in the United States mail, addressed to the Optionee, at the
address specified pursuant to this Paragraph 10. The delivery of certificates
upon the exercise of Options is subject to the condition that the person
exercising such Option provide the Company with such information as the Company
might reasonably request pertaining to such exercise, sale or other disposition.
11. TRANSFERABILITY OF OPTIONS. Options shall not be transferable by the
Optionee other than by will or under the laws of descent and distribution.
Options shall be exercisable, during the Optionee's lifetime, only by the
Optionee or his legal guardian or representative.
12. TERMINATION OF DIRECTORSHIP OF OPTIONEE. If, before the date of
expiration of the Option, the Optionee shall cease to be a director of the
Company, the Option shall terminate on the earlier of such date of expiration or
one year after the date of ceasing to serve as a director. In such event, the
Optionee shall have the right prior to the termination of such Option to
exercise the Option to the extent to which he was entitled to exercise such
Option immediately prior to ceasing to serve as a director; however, in the
event that the Optionee has ceased to serve as a director on or after attaining
the age of sixty-two (62) years, the Optionee shall be entitled to exercise all
or any part of such Option (without regard to any limitations imposed pursuant
to Paragraph 9(b) hereof, but subject to Paragraph 9(a)). Upon the death of the
Optionee, his executors, administrators, or any person or persons to whom his
Option may be transferred by will or by the laws of descent and distribution,
shall have the right, at any time prior to the earlier of the date of expiration
or one year following the date of such death, to exercise the Option, in whole
or in part (without regard to any limitations imposed pursuant to Paragraph 9(b)
hereof, but subject to Paragraph 9(a)).
13. REQUIREMENTS OF LAW. The Company shall not be required to issue any
shares under any Option or as partial payment for annual retainer fees if the
issuance of such shares shall constitute a violation by the Optionee or the
Company of any provisions of any law or regulation of any governmental
authority.
14. NO RIGHTS AS STOCKHOLDER. No Optionee shall have rights as a
stockholder with respect to shares covered by any Option until the date of
issuance of a stock certificate for such shares; and, except as otherwise
provided in Paragraph 16 hereof, no adjustment for dividends, or otherwise,
shall be made if the record date thereof is prior to the date of issuance of
such certificate.
15. NO EMPLOYMENT OR NOMINATION OBLIGATION. The granting of any Option
shall not impose upon the Company or its stockholders any obligation to employ
any Optionee or to continue to nominate any Optionee for election as a director
of the Company.
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<PAGE>
16. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issuance of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Stock or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
If the Company shall effect a subdivision or consolidation or shares or
other capital readjustment, the payment of a stock dividend, or other increase
or reduction of the number of shares of the Stock outstanding, without receiving
compensation therefor in money, services or property, then (a) the number, class
and per share price of shares of Stock subject to outstanding Options hereunder
shall be appropriately adjusted in such a manner as to entitle an Optionee to
receive upon exercise of an Option, for the same aggregate cash consideration,
an equivalent total number and class of shares as he would have received had he
exercised his Option in full immediately prior to the event requiring the
adjustment; and (b) the number and class of shares then reserved for issuance
under the Plan shall be adjusted by substituting for the total number and class
of shares of Stock then reserved the number and class of shares of Stock that
would have been received by the owner of an equal number of outstanding shares
of each class of Stock as the result of the event requiring the adjustment.
After a merger of one or more corporations into the Company, or after a
consolidation of the Company and one or more corporations in which the Company
shall be the surviving corporation, each holder of an outstanding Option shall,
at no additional cost, be entitled upon exercise of such Option to receive
(subject to any required action by stockholders) in lieu of the number and class
of shares into which such Option would have been so exercisable in the absence
of such event, the number and class of shares of stock or other securities to
which such holder would have been entitled pursuant to the terms of the
agreement of merger or consolidation if, immediately prior to such merger or
consolidation, such holder had been the holder of record of the number and class
of shares of Stock equal to the number and class of shares into which such
Option shall be so exercised.
If the Company is merged into or consolidated with another corporation
under circumstances where the Company is not the surviving corporation, or if
the Company sells or otherwise disposes of substantially all its assets to
another corporation and is liquidated while unexercised Options remain
outstanding under the Plan, (i) after the effective date of such merger,
consolidation or sale and liquidation, as the case may be, each holder of an
outstanding Option shall be entitled, upon exercise of such Option, to receive,
in lieu of shares of the Stock, shares of such stock or other securities as the
holders of shares of such class of Stock received pursuant to the terms of the
merger, consolidation or sale; and (ii) notwithstanding Paragraph 9(b) hereof,
but subject to Paragraph 9(a), all Options, from and after the date of any
agreement regarding such merger, consolidation, or sale and liquidation, as the
case may be, shall be exercisable in full prior to the effective date of such
merger, consolidation or sale or liquidation.
Except as hereinbefore expressly provided, the issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash or property, or for labor or services either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number, class or price of shares of Stock then
subject to outstanding Options.
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<PAGE>
17. TERMINATION AND AMENDMENT OF PLAN. The Board of Directors of the
Company may amend, terminate or suspend the Plan at any time, in its sole and
absolute discretion; provided, however, to the extent required to qualify the
Plan under Rule 16b-3 promulgated under Section 16 of the Securities Exchange
Act of 1934, as amended, no amendment shall be made more than once every six
months that would change the amount, price or timing of the Initial and Annual
Grants, other than to comport with changes in the Internal Revenue Code of 1986,
as amended, the Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder; and provided, further, to the extent
required to qualify the Plan under Rule 16b-3, no amendment that would (a)
materially increase the number of shares of Stock that may be issued under the
Plan, (b) materially modify the requirements as to eligibility for participation
in the Plan, or (c) otherwise materially increase the benefits accruing to
participants under the Plan, shall be made without the approval of the holders
of a majority of the voting stock of the Company, present in person or by proxy
and entitled to vote thereon.
18. WRITTEN AGREEMENT. Each Option granted hereunder of Stock issued
hereunder shall be embodied in a written agreement, which shall be subject to
the terms and conditions prescribed above and shall be signed by the Eligible
Director and by the Chairman of the Board, any Co-Chief Executive Officer or any
Vice President of the Company for and in the name and on behalf of the Company.
19. ADOPTION, APPROVAL AND EFFECTIVE DATE OF PLAN. The Plan shall be
considered adopted and shall become effective on the date the Plan is approved
by the stockholders of the Company.
20. GOVERNING LAW. This Plan and all determinations made and actions
taken pursuant hereto shall be governed by the laws of the State of Delaware,
without reference to principles of conflict of laws, and shall be construed
accordingly.
21. COMPLIANCE WITH SEC REGULATIONS. It is the Company's intent that the
Plan comply in all respects with Rule 16b-3, and any successor rule pursuant
thereto. If any provision of this Plan is later found not to be in compliance
with Rule 16b-3, the provision shall be deemed null and void. All grants of
Options and all exercises of Options under this Plan shall be executed in
accordance with the requirements of Section 16 of the Securities Exchange Act of
1934, as amended, and any regulations promulgated thereunder.
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EXHIBIT 5.1
[LETTERHEAD OF FULBRIGHT & JAWORSKI L.L.P.]
November 13, 1996
Drypers Corporation
1415 West Loop North
Houston, Texas 77055
Ladies and Gentlemen:
We have acted as counsel to Drypers Corporation, a Delaware corporation
(the "Company"), in connection with the registration under the Securities Act of
1933 (the "Act") of 3,580,124 shares of the Company's common stock, $.001 par
value (the "Shares"), to be offered upon the terms and subject to the conditions
set forth in the Drypers Corporation Amended and Restated 1995 Key Employee
Stock Option Plan, Drypers Corporation 1996 Non-Employee Director Stock Option
Plan and Drypers Corporation Employee Stock Purchase Plan (the "Stock Option
Plans and Agreements").
In connection therewith, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the Restated
Certificate of Incorporation of the Company, the By-laws of the Company, as
amended, the Stock Option Plans and Agreements, records of relevant corporate
proceedings with respect to the offering of the Shares and such other documents,
instruments and corporate proceedings with respect to the offering of the Shares
and such other documents, instruments and corporate records as we have deemed
necessary or appropriate for the expression of the opinions contained herein. We
have also reviewed the Company's Registration Statement on Form S-8 dated
November 13, 1996 (the "Registration Statement") to be filed with the Securities
and Exchange Commission with respect to the Shares.
We have assumed the authenticity and completeness of all records,
certificates and other instruments submitted to us as originals, the conformity
to original documents of all records, certificates and other instruments
submitted to us as copies, the authenticity and completeness of the originals of
those records, certificates and other instruments submitted to us as copies and
the correctness of all statements of fact contained in all records, certificates
and other instruments that we have examined.
Based on the foregoing and having regard for such legal considerations
as we have deemed relevant, we are of the opinion that the Shares have been duly
authorized and, when issued in accordance with the terms of the Stock Option
Plans and Agreements, will be validly issued, fully paid and non-assessable.
The opinions expressed herein relate solely to, are based solely upon
and are limited exclusively to the laws of the State of Delaware and the federal
laws of the United States of America, to the extent applicable.
<PAGE>
Drypers Corporation
November 13, 1996
Page 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Interests
of Named Experts and Counsel" in the Registration Statement.
Very truly yours,
/s/ Fulbright & Jaworski L.L.P.
Fulbright & Jaworski L.L.P.
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EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
March 26, 1996 included in Drypers Corporation's Form 10-K for the year ended
December 31, 1995, and to all references to our Firm included in this
Registration Statement.
ARTHUR ANDERSEN L.L.P.
Houston, Texas
November 12, 1996
