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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 27, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
SIMULA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Arizona 86-0320129
(STATE OF (I.R.S. EMPLOYER
INCORPORATION) IDENTIFICATION NO.)
2700 North Central Avenue, Suite 1000
Phoenix, Arizona 85004
(602) 631-4005
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
Bradley P. Forst, Esq.
Executive Vice President and General Counsel
2700 North Central Avenue, Suite 1000
Phoenix, Arizona 85004
(602) 631-4005
(NAME, ADDRESS INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X/
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS PROPOSED PROPOSED
OF SECURITIES TO BE AMOUNT TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
REGISTERED REGISTERED(1) PRICE PER SHARE(2) OFFERING PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share......... 2,000,921 shares $5.25 $10,504,835.00 $2,920.34
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(1) Represents the maximum number of shares for which the Registrant is
contractually obligated to register hereunder for shares issuable upon
conversion of Registrant's Series A Convertible Preferred Stock into
Common Stock and, pursuant to Rule 416 under the Securities Act of 1933,
an indeterminate number of additional shares of Common Stock as may be
issued or become issuable pursuant to the anti-dilution provisions of the
Series A Convertible Preferred Stock.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act of 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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PROSPECTUS
2,000,921 SHARES
SIMULA, INC.
COMMON STOCK
This prospectus relates to the offer and sale of up to 2,000,921 shares of our
Common Stock that may be sold from time to time by the holder of our Series A
Convertible Preferred Stock following that holder's conversion of their
Preferred Stock into our Common Stock. The actual number of shares sold under
this prospectus depends upon the prices at which those conversions are made.
We will not receive any proceeds from the issuance or sale of shares of Common
Stock sold under this prospectus. While we will pay certain of the expenses
associated with this offering, the Selling Shareholder will bear the cost of any
brokerage commissions and discounts that they incur when they sell their shares
under this prospectus. The Common Stock offered under this prospectus may be
sold from time to time in market transactions at the prices then prevailing for
our Common Stock on the New York Stock Exchange, or through privately negotiated
transactions.
Common Stock Trading Symbol: "SMU"
Where Listed: New York Stock Exchange
Closing Price on May 26, 1999: $5.125
AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. INVESTORS
SHOULD CAREFULLY CONSIDER THE FACTORS SET FORTH UNDER "RISK FACTORS," BEGINNING
ON PAGE 7.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION (SEC) NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
May 27, 1999
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ADDITIONAL INFORMATION AND INCORPORATION BY REFERENCE
We file annual, quarterly and special reports, proxy statements, and other
information with the SEC. You may read and copy the documents that we file at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
at the SEC's web site at http://www.sec.gov.
This prospectus is part of a registration statement that we filed with the SEC.
Certain parts of the registration statement were omitted because the SEC allows
us to "incorporate by reference" the information we file with them, which means
that we can disclose important information to you by referring you to those
documents. The information incorporated by reference is considered to be part of
this prospectus, and later information that we file with the SEC will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings made with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until
all of the Common Stock available for sale under this prospectus is sold by the
Selling Shareholder.
- Annual Report on Form 10-K for the year ended December 31, 1998
- Proxy Statement relating to our Annual Meeting of Shareholders to be
held June 17, 1999
- Quarterly Report on Form 10-Q for the quarter ended March 31, 1999
- Registration Statement on Form 8-A relating to the Common Stock
Upon your request, we will provide to you without charge a copy of any documents
incorporated by reference into this prospectus. Requests for copies of documents
should be made to:
Simula, Inc.
Investor Relations Department
2700 North Central Avenue, Suite 1000
Phoenix, Arizona 85004
(602) 631-4005
FORWARD-LOOKING STATEMENTS
We make statements in this prospectus and the documents that we incorporate by
reference that are considered "forward-looking statements" within the meaning of
the Securities Act of 1933 and the Securities Exchange Act of 1934. Sometimes
these statements will contain words such as "believes," "expects," "plans,"
"intends" and other similar words. These statements are not guarantees of our
future performance, profitability and cash flow, and are subject to risks,
uncertainties and other important factors that could cause our actual
performance to be materially different from those that we project. These risks,
uncertainties and factors include:
- ability to sell our discontinued rail seating operations
- availability of capital and terms upon which it is available
- manufacturing capacity and yield
- our costs of labor, raw materials, supplies and equipment
- reliability of our vendor base
- contract mix and shifting production and delivery schedules among
our two business segments
- amount of our resources committed to research and development from
time to time
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- our success in building strategic alliances with key parties in our
industries, particularly first tier suppliers and prime contractors
who sell our products to OEMs
- the level of orders that are received and can be shipped and
invoiced in a fiscal quarter
- customer order patterns
- the cyclical nature of the airline and automotive industries and
other markets addressed by our products
- the level and makeup of military expenditures
- competition and competitive pressures on pricing
- technological changes
- general economic, business and regulatory conditions
Given these uncertainties, you should not place undue reliance on these
forward-looking statements. Please see the documents that we incorporate by
reference for more information on these factors. These forward-looking
statements represent our estimates and assumptions only as of the date of this
prospectus.
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PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in this
prospectus and the documents that are incorporated into this prospectus by
reference. It is not complete and may not contain all of the information that is
important to you. To understand this offering fully, you should read the entire
prospectus carefully.
SIMULA, INC.
OUR ADDRESS AND TELEPHONE NUMBER........ Simula, Inc.
2700 North Central Avenue, Suite 1000
Phoenix, Arizona 85004
(602) 631-4005
STATE AND YEAR OF OUR INCORPORATION..... Arizona, 1975
OUR BUSINESS............................ We invent, manufacture, and market
occupant seating, restraint, and
other advanced-technology safety
systems for use in a wide range of
transportation vehicles.
We are a holding company for nine
operating units in two business
segments: Commercial Transportation
Products and Government and Defense
Products. We maintain operations
in four U.S. states and in the
United Kingdom, and have an
employee base of more than 1,000.
The largest markets in our Commercial
Transportation segment are commercial
airline seating systems and safety
systems for automobiles and trucks.
The largest markets in our Government
and Defense segment are energy
absorbing helicopter seats and armor
systems.
Our customers include commercial
airline airframe builders, leasing
companies and airlines; large
automotive component (airbag)
suppliers; and large government and
defense contractors as well as the
government and branches of the
military.
OUR NEW YORK STOCK EXCHANGE TRADING
SYMBOL................................ "SMU"
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THE OFFERING
PURPOSE OF THIS PROSPECTUS.............. In March 1999, we sold Series A
Convertible Preferred Stock to an
institutional investor. As part of
that offering we agreed to provide
the buyer (the Selling Shareholder
under this prospectus) with Common
Stock that is registered with the
SEC for issuance upon their
conversion of the Preferred Stock
into Common Stock. This prospectus
relates to the Selling
Shareholder's sale of the Common
Stock received following their
conversion of Preferred Stock. In
addition to this prospectus, you
should carefully read the documents
that are incorporated into this
prospectus by reference.
SELLING SHAREHOLDER..................... BayStar Capital, L.P.
USE OF PROCEEDS......................... We will not receive any proceeds
from the sale of Common Stock under
this prospectus. All proceeds will
be retained by the Selling
Shareholder for its own account.
OFFERING EXPENSES....................... We will pay expenses associated with
the registration with the SEC of the
Common Stock that this prospectus
relates to, as well as printing and
other costs associated with this
prospectus generally. The Selling
Shareholder will pay all commissions
and other expenses associated with
their sale of Common Stock under this
prospectus.
METHOD OF DISTRIBUTION.................. The Selling Shareholder may sell
Common Stock under this prospectus
from time to time at the then
prevailing price on the New York Stock
Exchange, or in transactions privately
negotiated with purchasers.
INVESTMENT RISKS........................ Your investment in our Common Stock
involves a high degree of risk.
You should carefully consider the
RISK FACTORS described below in
this prospectus prior to making
your investment decision.
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NUMBER OF SHARES OF OUR COMMON STOCK
OUTSTANDING AS OF MAY 26, 1999........ 10,009,610
NUMBER OF SHARES OF COMMON STOCK
OFFERED UNDER THIS PROSPECTUS......... 2,000,921
COMMON STOCK TO BE OUTSTANDING AFTER THE
SELLING SHAREHOLDER SELLS ALL OF THE
SHARES OFFERED UNDER THIS PROSPECTUS.. 12,010,531
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RISK FACTORS
In making your investment decision you should carefully consider the following
factors, as well as all risks and factors identified in the documents that we
incorporate by reference.
MANAGEMENT OF GROWTH
We are currently experiencing a period of significant growth. Our ability to
manage that growth effectively will require us to enhance our operational,
financial, and management information systems. In addition, we must also
effectively oversee operations of geographically dispersed operating
subsidiaries and divisions in diverse lines of business. In the past several
years we have increased staffing and other expenses, as well as expenditures on
manufacturing plants, capital equipment and leasehold improvements in order to
meet the anticipated demand of our customers. However, our customers generally
do not commit to firm production schedules for other than a relatively short
time in advance. Our profitability will be adversely affected if we have
increased or continue to increase our expenditures in anticipation of future
orders that do not materialize. Our customers may also require, from time to
time, rapid increases in design and production services that place an excessive
short-term burden on our resources. Our failure to manage our growth effectively
could have a material adverse effect on our business, operating results, and
financial condition.
RECENT OPERATING RESULTS
We reported losses for each of our fiscal years ending December 31, 1998, 1997
and 1996. These losses were $27,708,513, $3,539,526 and $10,049,914,
respectively. Part of our loss in 1998 resulted from a write-down of certain
inventory, part resulted from a write-down of the anticipated sale price of our
discontinued rail seating operations, and part was an operating loss. The 1997
and 1996 losses were both comprised of operating losses and the effect of a
change in our method of accounting for pre-contract costs. We reported a profit
for our quarter ended March 31, 1999. There can be no assurance, however, that
we will maintain profitability throughout 1999 or in the future.
LIQUIDITY AND CAPITAL RESOURCES
Until we are able to operate our business at a profitable level for an extended
period of time and generate positive cash flow, we may remain dependent on
outside capital sources. These sources include our bank line of credit and funds
raised in private or public offerings of securities. There can be no assurance
that these sources of funds will remain or become available, or that they will
remain or become available on acceptable terms. The inability to obtain cash
from outside sources may limit the amount of working capital that we have
available for the payment of short-term obligations, and may potentially affect
our ability to meet long-term obligations as well. To meet our working capital
needs in 1999, we will have to sell our discontinued rail seating operation,
which we anticipate will be completed in the second quarter of 1999.
Approximately $4.75 million of our Series C 10% Senior Subordinated Convertible
Notes, issued in September 1996, remain outstanding and are due to be repaid in
September 1999. A lack of sufficient cash at that time may require us to
exchange or refinance these Notes.
RECENT ENTRY INTO THE AIRLINE SEATING MARKET; MANUFACTURING CHALLENGES
Through our subsidiary Airline Interiors, we entered the commercial airline
seating market in 1996. Although we were the first successful entrant into this
market in 25 years and achieved a 6% worldwide
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market share by the end of 1998, our entry into the market has proven to be more
costly than we expected. We have not yet been completely successful in the
transition to high volume airline seat production and we have not yet operated
this business profitably. Engineering challenges, quality control and
certification issues, manufacturing throughput and part shortages have presented
problems for us over the past three years, resulting in cost overruns and late
shipments of seats to customers.
Sales of commercial airline seats presently comprise between 30% and 40% of our
overall corporate revenues. Failure to operate this business profitably could
adversely affect our overall corporate performance.
RECENT ENTRY INTO THE AUTOMOTIVE INFLATABLE RESTRAINT MARKET
Through our subsidiary Simula Automotive Safety Devices, Inc., we began
producing side-impact inflatable restraint systems for head and neck protection
(the ITS(R)) in 1996, and have since developed certain other applications
derived from that technology. While the ITS(R) has been favorably received by
our initial customers, there can be no assurance that we will be successful in
marketing and selling the ITS(R) to additional customers, or derivative products
to new customers. In addition, it is customary in the automobile component
supply industry that automobile manufacturers seek progressive volume price
reductions from their suppliers. We have implemented cost-cutting and efficiency
mechanisms to offset the reduction in our prices that result from these volume
discounts. Our failure to continue to do so may adversely impact our operating
results in this business.
POSSIBLE VOLATILITY OF STOCK PRICE
The trading price of our Common Stock has been and in the future may be subject
to wide fluctuations in response to quarterly variations in our operating
results; actual or anticipated announcements of technical innovations or new
products by us or our competitors; contracts with key customers; new agreement
negotiations; changes in analysts' estimates of our financial performance;
general industry conditions; military expenditures; worldwide economic and
financial conditions; and other events or factors. In addition, broad market
fluctuations and other factors may adversely affect the market price of our
Common Stock.
COMPETITION
The aerospace and automotive markets are intensely competitive. Most of our
competitors have greater marketing capabilities and financial resources than we
do. Although most of our technology is proprietary, many businesses are actively
engaged in the research and development of new products and in the manufacture
and sale of products that may compete with our aerospace, inflatable restraint
systems, structures, and materials capabilities. Competition for commercial
contracts relates primarily to technical know-how, cost, and marketing efforts.
Competition for government contracts relates primarily to the award of contracts
for the development of proposed products rather than for the supply of products
that have been developed under contracts. Numerous suppliers compete for
government and defense contracts as prime contractors or subcontractors.
DILUTION
In the context of this prospectus, dilution is the difference between the price
at which Common Stock is purchased under this prospectus and the net tangible
book value per share immediately after the sale of all shares under this
prospectus. The more shares that are issued and sold under this prospectus, the
lower the book value will be per share and the more that each shareholder will
have their per share
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interest in our Common Stock diluted from a book value standpoint. Further, the
greater the number of shares outstanding at any time, the lower our reported
earnings per share will be.
Additional dilution to shareholders will occur in the future upon the conversion
by the holders of our convertible debt securities into Common Stock, and the
exercise of stock options by option holders under our stock option plans.
DEPENDENCE ON INDUSTRY RELATIONSHIPS
A number of our products are components in our customers' final products. We
typically are a subcontractor to large prime contractors in the defense
business, and a sub-supplier to large first tier suppliers in the aerospace and
automotive business. For example, we manufacture the inflatable portion of our
automobile inflatable restraint product, then ship it to a first tier automotive
component supplier who incorporates a generator, packages the finished product,
and sells it to the automobile maker. Therefore, to be successful in this
business arrangement, we must be successful in marketing our product to both the
end customer and the first tier component supplier. A failure to do so may
adversely impact the success of our business operations.
We have been successful in establishing relationships with first tier suppliers.
However, difficulties may arise from our dependence upon these intermediaries.
Among these are our indirect access to the end customer, lack of control over
the marketing and pricing of the product to the end customer, and the fact that
the first tier suppliers may be marketing competing products at the same time
that they are marketing ours. The success of our operations may be adversely
impacted if we do not successfully control these and similar issues that may
place us at a competitive disadvantage.
INVESTMENT IN AND DEPENDENCE ON PROPRIETARY TECHNOLOGY
Our future success and competitive position depend to a significant extent upon
our proprietary technology. We have in the past, and will continue in the future
to make significant investments in the development and refinement of the
technologies for our business. We rely in part on patent, trade secret, and
copyright law to protect our intellectual property.
There can be no assurance that we will be successful in the future in developing
new technologies or in enhancing our existing technologies. In addition, there
can be no assurance that any patent that we own will not be invalidated or
challenged, that our intellectual property will provide us with any competitive
advantages, or that any of our pending or future patent applications will be
issued within the scope of the claims that we are seeking. Furthermore, there
can be no assurance that others will not develop technologies that are similar
or superior to our technology, duplicate our technology, or design around our
patents.
QUARTERLY OPERATING RESULTS; CYCLICALITY
As a growth company, our quarterly results may be especially variable and
historic results are not a reliable basis on which to predict future operating
results. Since the beginning of 1993 we have experienced significant growth in
our revenue as a result of our internal growth and corporate acquisitions in
1993 and 1994. At the same time our earnings have not shown similar
quarter-to-quarter growth.
Our continued success will be impacted by the cyclical nature of the airline and
automobile industries as well as other markets served by our products; the level
and makeup of military expenditures;
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technological changes; competition and competitive pressures on pricing; new
government regulations; and economic conditions in the United States and
worldwide markets served by us and our customers. Our products are incorporated
into a variety of transportation vehicles. A slowdown in demand for new
transportation vehicles or modification services to existing transportation
vehicles as a result of economic or other conditions in the United States or
worldwide markets served by us and our customers could adversely affect our
operating results and financial condition. Conversely, an increase in demand for
new transportation vehicles or modification services could strain our capacity,
manufacturing efficiency, and delivery schedules.
SUBSTANTIAL RELIANCE ON MAJOR CUSTOMERS
Our business has relied to a great extent on relatively few major customers,
although the mix of major customers has varied from year to year depending on
the status of then current contracts. During fiscal 1998 and to date in fiscal
1999, however, no customer accounted for more than 10% of our revenue. Although
we have established relationships with a number of our commercial and defense
customers, we do not have long-term supply contracts with any customers. Our
customers also generally do not commit to long-term production schedules and, as
a result, customer orders generally can be canceled and volume levels changed or
delayed. The timely replacement of canceled, delayed, or reduced orders cannot
be assured. Reliance upon defense contracts also involves certain inherent
risks, including dependence on Congressional appropriations, changes in
governmental policies that reflect military and political developments, and
other factors characteristic of the defense industry. The loss or reduction in
sales to a major customer may have a more material adverse effect on our
operations and financial condition than would be the case if our revenue was
less concentrated by customer.
EFFECT OF GOVERNMENT CONTRACT PROVISIONS
As a contractor and subcontractor to the United States government, we are
subject to various laws and regulations that are more restrictive than those
applicable to non-government contractors. Sales of many of our products are
governed by rules favoring the government's contractual position. As a
consequence, our contracts may be subject to protest or challenge by
unsuccessful bidders or to termination, reduction, or modification in the event
of changes in government requirements, reductions in federal spending, or other
factors.
Our government-related revenue has resulted almost exclusively from firm,
fixed-price contracts. Fixed-price contracts involve certain inherent risks to
us, including underestimating costs, problems with new technologies, and
economic and other changes that may occur over the contract period. The accuracy
and appropriateness of certain costs and expenses used to substantiate our
direct and indirect costs for the United States government under both cost-plus
and fixed-price contracts are subject to extensive regulation and audit by the
Defense Contract Audit Agency ("DCAA"), an arm of the United States Department
of Defense. The DCAA has the right to challenge our cost estimates or
allocations with respect to any of our contracts. If a DCAA audit establishes
overcharges or discrepancies in costs or accounting, it can seek the repayment
of those overcharges or seek other reconciliations.
GOVERNMENT SAFETY REGULATIONS
We regularly monitor regulations adopted or being considered by the Federal
Aviation Administration relating to airlines, particularly those relating to
seating and restraints, and by the National Highway Traffic and Safety
Administration, particularly those relating to airbags and other safety features
in automobiles. Administrative regulations are typically subject to industry
resistance, comment periods, and significant delays in implementation. To the
extent that proposed regulations are withdrawn or that
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new or existing regulations are subsequently amended, rescinded, or deadlines
for compliance extended, the demand for improved safety systems, such as those
that we provide, could be adversely impacted.
CONTROL BY MANAGEMENT
Following the sale of all of the shares of Common Stock offered under this
prospectus by the Selling Shareholder, our directors and executive officers will
likely continue to own in the aggregate more than 30% of our outstanding Common
Stock. Through their ownership of our Common Stock, current management will, as
a practical matter, continue to have the ability to elect or otherwise designate
members of our Board of Directors. Our directors and executive officers also
have the right to acquire additional shares upon their exercise of options
granted under our stock option plans, and the executive officers may acquire
additional shares under our Employee Stock Purchase Plan.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale by the Selling Shareholder
of the shares of Common Stock offered under this prospectus. Proceeds received
from purchasers of Common Stock offered under this prospectus will be retained
by the Selling Shareholder.
DETERMINATION OF OFFERING PRICE
This prospectus may be used from time to time by the Selling Shareholder to
offer our Common Stock for sale. The offering price in each transaction will be
determined by the Selling Shareholder and may be based on market prices
prevailing at the time of sale, or at privately negotiated prices.
The Selling Shareholder will acquire the shares for sale under this prospectus
by converting Preferred Stock into our Common Stock from time to time, as
provided under the terms of the private placement in which the Preferred Stock
was issued in March 1999. The number of shares and the price of the Common Stock
that the Selling Shareholder receives from us for future sale under this
prospectus will vary, and is a function of a conversion price formula that we
negotiated and agreed upon with the Selling Shareholder.
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SELLING SHAREHOLDER
The Selling Shareholder obtained or will obtain shares of Common Stock upon
conversion of our Series A Convertible Preferred Stock.
We have agreed to register initially 2,000,921 shares of our Common Stock that
we may be required to issue to the Selling Shareholder upon conversion of our
Series A Convertible Preferred Stock. We may be required to register additional
shares of our Common Stock if:
- we have either obtained approval from our shareholders or the New
York Stock Exchange to issue more than 2,000,921 shares of our
Common Stock (unless we are no longer subject to the New York Stock
Exchange rule that requires us to obtain shareholder approval prior
to issuing in excess of 19.99% of our Common Stock); or
- certain dilutive events occur with respect to the Common Stock
underlying our Series A Convertible Preferred Stock.
The number of shares of Common Stock that we will issue for our Series A
Convertible Preferred Stock is determined by calculating the conversion price
which, in general, is based upon the market price of our Common Stock. We cannot
determine the actual number of shares of our Common Stock that we will issue
because the conversion price of our Series A Convertible Preferred Stock will
fluctuate with the market price of our Common Stock. The number of shares
underlying our Series A Convertible Preferred Stock will increase if the
conversion price decreases, and will decrease if the conversion price increases.
The following table sets forth certain information as of the date of this
prospectus regarding the beneficial ownership of shares of Common Stock by the
Selling Shareholder, and as adjusted to reflect the sale of up to the maximum
number of shares of Common Stock that may be offered for sale by the Selling
Shareholder.
The number shares of Common Stock beneficially owned by the Selling Shareholder
set forth in the table below is equal to the number of shares that the Selling
Shareholder would have beneficially owned as of May 26, 1999, if the Selling
Shareholder converted all of its Series A Convertible Preferred Stock into
shares of Common Stock based on the conversion price of $4.81 in effect as of
that date.
"Beneficial ownership" of the Common Stock by the Selling Shareholder in the
following table is defined under Rule 13d-3 of the Securities Exchange Act of
1934, as amended. Generally, beneficial ownership includes securities with
respect to which the investor has voting or investment power. The rules also
provide that beneficial ownership includes shares of Common Stock underlying
options, warrants and convertible securities that can be exercised or converted
within 60 days. To that extent, the number of shares of our Common Stock
underlying our Series A Convertible Preferred Stock presented on the table may
not present the actual beneficial ownership from time to time of the Selling
Shareholder in accordance with these rules because of the floating-rate
conversion feature of our Series A Convertible Preferred Stock and because the
Selling Shareholder cannot convert its shares if such conversion would result in
the Selling Shareholder beneficially owning more than 4.99% of our Common Stock
at any time.
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<TABLE>
<CAPTION>
MAXIMUM SHARES PERCENT OWNED
SHARES AVAILABLE FOR SALE AFTER
NAME AND ADDRESS OF SELLING BENEFICIALLY UNDER THIS COMPLETION OF
SHAREHOLDER OWNED PROSPECTUS OFFERING
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<S> <C> <C> <C>
BayStar Capital, L.P. 1,559,252 2,000,921 0%
1500 West Market Street, Suite 200
Mequon, Wisconsin 53092
</TABLE>
DESCRIPTION OF COMMON STOCK
We are authorized to issue 50,000,000 shares of Common Stock, of which
10,009,610 shares were issued and outstanding as of May 26, 1999.
Holders of our Common Stock are entitled to one vote for each share owned by
them on all matters upon which they are entitled to vote. As required under
Arizona law, there is cumulative voting in the election of directors. This means
that each shareholder is entitled to vote the number of shares owned by them for
as many persons as there are directors to be elected, or to cumulate their votes
by giving one candidate as many votes as the number of such directors multiplied
by the number of their shares, or by distributing votes on the same principle
among any number of candidates.
Holders of our Common Stock are entitled to receive any dividends that may be
declared from time to time by our Board of Directors out of funds legally
available. If there is a liquidation, dissolution, or winding up of our
business, holders of our Common Stock will share ratably in all assets remaining
after the payment of our liabilities. The holders of our Common Stock have no
preemptive or conversion rights. There are no redemption or sinking fund
provisions applicable to our Common Stock. The rights of the holders of our
Common Stock are subject to any rights that may be fixed for holders of
preferred stock, including the Preferred Stock owned by the Selling Shareholder.
Our Common Stock is now and in the future will be validly issued, fully paid,
and nonassessable.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for our Common Stock is American Stock Transfer
& Trust Company, New York, New York.
LISTING
Our Common Stock is currently listed and traded on the New York Stock Exchange
under the symbol "SMU."
PLAN OF DISTRIBUTION
The distribution of the Common Stock offered under this prospectus by the
Selling Shareholder may be made from time to time, so long as the registration
statement of which this prospectus is a part remains effective. Sales of Common
Stock under this prospectus may be made in one or more transactions that may
take place on the New York Stock Exchange, including ordinary brokers'
transactions, in privately-negotiated transactions, or through sales to one or
more broker/dealers for resale of such Common Stock
13
<PAGE> 15
as principals, at market prices prevailing at the time of sale or at negotiated
prices. Usual and customary or specifically negotiated brokerage fees or
commissions will be paid by the Selling Shareholder in connection with its sales
of Common Stock under this prospectus.
We will pay expenses associated with the registration with the SEC of the Common
Stock that this prospectus relates to, as well as printing and other costs
associated with this prospectus generally. We will not, however, pay for any
expenses, commissions or discounts of underwriters, dealers or agents for the
Selling Shareholder. Those costs will be paid by the Selling Shareholder.
LEGAL MATTERS
The validity of the shares offered by this prospectus has been passed upon by
Bradley P. Forst, General Counsel of Simula, Inc.
EXPERTS
The consolidated financial statements of Simula, Inc. that are incorporated by
reference into this prospectus from the Simula, Inc. report on Form 10-K for the
year ended December 31, 1998 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report which is incorporated by
reference into this prospectus. The financial statements have been incorporated
into this prospectus in reliance upon the report of Deloitte and Touche LLP,
given upon their authority as experts in accounting and auditing.
14
<PAGE> 16
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE ANY
INFORMATION OR REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST NOT
RELY ON ANY UNAUTHORIZED INFORMATION. THIS PROSPECTUS DOES NOT OFFER TO SELL OR
BUY ANY SHARES IN ANY JURISDICTION WHERE IT IS UNLAWFUL. THE INFORMATION IN THIS
PROSPECTUS IS CURRENT AS OF MAY 27, 1999 AND WILL BE UPDATED BY THE DOCUMENTS
THAT ARE INCORPORATED INTO THIS PROSPECTUS BY REFERENCE ONCE THEY ARE FILED WITH
THE SEC.
---------------
TABLE OF CONTENTS
PAGE
Additional Information and Incorporation by Reference...................... 2
Prospectus Summary......................................................... 4
Risk Factors............................................................... 7
Use of Proceeds............................................................ 11
Determination of Offering Price............................................ 11
Selling Shareholder........................................................ 12
Description of Common Stock................................................ 13
Plan of Distribution....................................................... 13
Legal Matters.............................................................. 14
Experts.................................................................... 14
2,000,921 SHARES
SIMULA, INC.
COMMON STOCK
PROSPECTUS
May 27, 1999
<PAGE> 17
SIMULA, INC.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemized statement of all expenses in connection with
the issuance and distribution of the securities to be registered. These expenses
will be paid by Simula, Inc. (the "Company"). The information contained below is
subject to future contingencies. An asterisk to the right of a dollar figure
denotes that the figure is an estimate and the exact amount to be expended for
that category is not yet known.
<TABLE>
<S> <C>
Registration Fee........................................ $2,920.34
Printing and Engraving Costs............................ $1,000.00
Other................................................... $5,000.00
Total......................................... $8,920.34
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
ARTICLE 10 of the Articles of Incorporation of the Registrant provides as
follows:
The personal liability of the directors to the Corporation and its
shareholders for monetary damages by reason of their conduct as directors shall
be limited or eliminated to the fullest extent permitted by Arizona law.
Section 12.01 of the Bylaws of the Registrant provides as follows:
12.01 INDEMNIFICATION. To the full extent permitted by Arizona law,
the Corporation shall indemnify and pay the expenses of any person who is
or was made, or threatened to be made, a party to an action or proceeding
(whether civil, criminal, administrative or investigative) by reason of
the fact that he is or was a director, officer, employee, trustee or agent
of or for the Corporation or is or was serving at the request or with the
prior approval of the Corporation as a director, officer, employee,
trustee or agent of another corporation, trust or enterprise, against any
liability asserted against him and incurred by him in any capacity or
arising out of his status as such, whether or not the Corporation would
have the power to indemnify him against such liability under the
provisions of these Bylaws.
Section 10-202(B)(1) and Chapter 8, Article 5 (Section 10-850 et seq.) of
the General Corporation Law of Arizona, as amended, apply to registrant and
provide as follows:
Section 10-202(B). The articles of incorporation may set forth:
1. A provision eliminating or limiting the liability of a director to the
corporation or its shareholders for money damages for any action taken or any
failure to take any action as a director, except liability for any of the
following:
(a) The amount of a financial benefit received by a director to
which the director is not entitled.
(b) An intentional infliction of harm on the corporation or the
shareholders.
(c) A violation of Section 10-833.
(d) An intentional violation of criminal law.
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<PAGE> 18
2. A provision permitting or making obligatory indemnification of a
director for liability, as defined in Section 10 850, to any person for any
action taken, or any failure to take any action, as a director, except liability
for any of the exceptions described in paragraph 1, subdivisions (a), (b), (c)
and (d) of this subsection.
3. Any other provision, not inconsistent with law.
Chapter 8 -- Directors and Officers, Article 5 -- Indemnification.
Section 10-850. Definitions
In this article, unless the context otherwise requires:
1. "Corporation" includes any domestic or foreign predecessor entity of a
corporation in a merger or other transaction in which the predecessor's
existence ceased on consummation of the transaction.
2. "Director" means an individual who is or was a director of a
corporation or an individual who, while a director of a corporation, is or was
serving at the corporation's request as a director, officer, partner, trustee,
employee or agent of another foreign or domestic corporation, partnership, joint
venture, trust, employee benefit plan or other entity. A director is considered
to be serving an employee benefit plan at the corporation's request if his
duties to the corporation also impose duties on or otherwise involve services by
the director to the plan or to participants in or beneficiaries of the plan.
Director includes the estate or personal representative of a director.
3. "Expenses" includes attorney fees and all other costs and expenses
reasonably related to a proceeding.
4. "Liability" means the obligation to pay a judgment, settlement, penalty
or fine, including an excise tax assessed with respect to an employee benefit
plan, or reasonable expenses incurred with respect to a proceeding and includes
obligations and expenses that have not yet been paid by the indemnified person
but that have been or may be incurred.
5. "Officer" means an individual who is or was an officer of a corporation
or an individual who, while an officer of a corporation, is or was serving at
the corporation's request as a director, officer, partner, trustee, employee or
agent of another foreign or domestic corporation, partnership, joint venture,
trust, employee benefit plan or entity. An officer is considered to be serving
an employee benefit plan at the corporation's request if the officer's duties to
the corporation also impose duties on or otherwise involve services by the
officer to the plan or to participants in or beneficiaries of the plan. Officer
includes the estate or personal representative of an officer.
6. "Official capacity" means, if used with respect to a director, the
office of director in a corporation and, if used with respect to an officer as
contemplated in Section 10-856, the office in a corporation held by the officer.
Official capacity does not include service for any other foreign or domestic
corporation or any partnership, joint venture, trust, employee benefit plan or
other entity.
7. "Outside director" means a director who, when serving as a director,
was not an officer, employee or holder of more than five per cent of the
outstanding shares of any class of stock of the corporation or of any affiliate
of the corporation.
8. "Party" includes an individual who was, is or is threatened to be made
a named defendant or respondent in a proceeding.
9. "Proceeding" means any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative and whether
formal or informal.
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<PAGE> 19
Section 10-851. Authority to indemnify
A. Except as provided in subsection D of this section and in
Section 10-854, a corporation may indemnify an individual made a
party to a proceeding because either:
1. The individual is or was a director against liability incurred in
the proceeding if all of the following conditions exist:
(a) The individual's conduct was in good faith
(b) The individual reasonably believed:
(i) In the case of conduct in an official capacity with the
corporation, that the conduct was in its best interests.
(ii) In all other cases, that the conduct was at least not
opposed to its best interests.
(c) In the case of any criminal proceedings, the individual had no
reasonable cause to believe the conduct was unlawful.
2. The director engaged in conduct for which broader indemnification
has been made permissible or obligatory under a provision of the
articles of incorporation pursuant to Section 10-202, subsection b,
paragraph 2.
B. A director's conduct with respect to an employee benefit plan for a
purpose the director reasonably believed to be in the interests of the
participants in and beneficiaries of the plan is conduct that satisfies the
requirement of subsection A, paragraph 2, subdivision (a) of this section.
C. The termination of a proceeding by judgment, order, settlement or
conviction or on a plea of no contest or its equivalent is not of itself
determinative that the director did not meet the standard of conduct described
in this section.
D. A corporation may not indemnify a director under this section either:
1. In connection with a proceeding by or in the right of corporation in
which the director was adjudged liable to the corporation.
2. In connection with any other proceeding charging improper financial
benefit to the director, whether or not involving action in the director's
official capacity, in which the director was adjudged liable on the basis
that financial benefit was improperly received by the director.
E. Indemnification permitted under this section in connection with a
proceeding by or in the right of the corporation is limited to reasonable
expenses incurred in connection with the proceeding.
Section 10-852. Mandatory indemnification
A. Unless limited by its articles of incorporation, a corporation shall
indemnify a director who was the prevailing party, on the merits or otherwise,
in the defense of any proceeding to which the director was a party because the
director is or was a director of the corporation against reasonable expenses
incurred by the director in connection with the proceeding.
B. Unless limited by its articles of incorporation, Section 10-851,
subsection D or subsection C of this section, a corporation shall indemnify an
outside director against liability. Unless limited by its articles of
incorporation or subsection C of this section, a corporation shall pay an
outside director's expenses in advance of a final disposition of the proceeding,
if the director furnishes the corporation with a written affirmation of the
director's good faith
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<PAGE> 20
belief that the director met the standard of conduct described in Section
10-851, subsection A and the director furnishes the corporation with a written
undertaking executed personally, or on the director's behalf, to repay the
advance if it is ultimately determined that the director did not meet the
standard of conduct. The undertaking required by this subsection is an unlimited
general obligation of the director but need not be secured and shall be accepted
without reference to the director's financial ability to make repayment.
C. A corporation shall not provide the indemnification or advance payment
of expenses described in subsection B if this section if a court of competent
jurisdiction has determined before payment that the outside director failed to
meet the standards described in Section 10-851, subsection A, and a court of
competent jurisdiction does not otherwise authorize payment of indemnification
or expenses under subsection B of this section for more than sixty days after a
request is made unless ordered to do so by a court of competent jurisdiction.
Section 10-853. Advance for expenses
A. A corporation may pay for or reimburse the reasonable expenses incurred
by a director who is a party to a proceeding in advance of final disposition of
the proceeding if both of the following conditions exist:
1. The director furnishes the corporation with a written affirmation of
the director's good faith belief that the director has met the standard of
conduct described in Section 10-851 or that the proceeding involves conduct for
which liability has been eliminated under a provision of the articles of
incorporation pursuant to Section 10-202, subsection B, paragraph 1.
2. The director furnishes the corporation with a written undertaking
executed personally or on the director's behalf, to repay the advance the
director is not entitled to mandatory indemnification under Section 10-852 and
it is ultimately determined under Section 10-854 or 10-855 that the director did
not meet the standard of conduct.
B. The undertaking required by subsection A, paragraph 2 of this section
is an unlimited general obligation of the director but need not be secured and
may be accepted without reference to financial ability to make repayment.
C. Authorizations of payments under this section shall be made in the
manner consistent with Section 10-830 or 10-842.
D. This section does not apply to the advancement of expenses to or for
the benefit of an outside director. Advances to outside directors shall be made
pursuant to Section 10-852.
Section 10-854. Court ordered indemnification
Unless the corporation's articles of incorporation provide otherwise, a
director of the corporation who is a party to a proceeding may apply for
indemnification or an advance for expenses to the court conducting the
proceeding or to another court of competent jurisdiction. On receipt of an
application, the court after giving any notice the court considers necessary may
order indemnification or advance for expenses if it determines either:
1. The director is entitled to mandatory indemnification under
Section 10-852, in which case the court shall also order the corporation to pay
the director's reasonable expenses incurred to obtain court ordered
indemnification.
2. The director is fairly and reasonably entitled to indemnification in
view of all the relevant circumstances, whether or not the director met the
standard of conduct set forth in Section 10-851 or was adjudged liable as
described in Section 10-851, subsection D, but if the director was adjudged
liable under Section 10-851, subsection D, indemnification is limited to
reasonable expenses incurred.
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<PAGE> 21
Section 10-855. Determination and authorization of indemnification
A. A corporation may not indemnify a director under Section 10-851 unless
authorized in the specific case after determination has been made that
indemnification of the director is permissible in the circumstances because the
director has met the standard of conduct set forth in Section 10-851.
B. The determination shall be made either:
1. By the board of directors by a majority vote of the directors not
at the time parties to the proceeding.
2. By special legal counsel:
(a) Selected by majority vote of the disinterested directors.
(b) If there are no disinterested directors, selected by majority
vote of the board.
3. By the shareholders, but shares owned by or voted under the
control of directors who are at the time parties to the proceeding shall
not be voted on the determination.
C. Neither special legal counsel nor any shareholder has any liability
whatsoever for the determination made pursuant to this section. In voting
pursuant to subsection B of this section, directors shall discharge their duty
in accordance with Section 10-830.
D. Authorization of indemnification and evaluation as to reasonableness of
expenses shall be made in the same manner as the determination that
indemnification is permissible, except that if the determination is made by
special legal counsel, authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under subsection B,
paragraph 2 of this section to select counsel.
Section 10-856. Indemnification of officers
A. A corporation may indemnify and advance expenses under this article
to an officer of the corporation who is a party to a proceeding
because the individual is or was an officer of the corporation as
follows.
1. To the same extent as to a director.
2. If the individual is an officer but not a director, to the further
extent as may be provided by the articles of incorporation, the bylaws, a
resolution of the board of directors, or contract expert for:
(a) Liability in connection with a proceeding by or in the right of the
corporation other than for reasonable expenses incurred in
connection with the proceeding.
(b) Liability arising out of conduct that constitutes:
(i) Receipt by the officer of a financial benefit to which the
officer is not entitled
(ii) An intentional infliction of harm on the corporation or the
shareholders.
(iii) An intentional violation of criminal law.
B. Subsection A, paragraph 2 of this section applies to an officer who is
also director if the basis on which the officer is made a party to the
proceeding is an act or omission solely as an officer.
C. An officer of the corporation who is not a director is entitled to
mandatory indemnification under Section 10-852, subsection A and may apply to a
court under Section 10-854 for indemnification or an advance for expenses, in
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<PAGE> 22
each case to the same extent to which a director is entitled to indemnification
or advance for expenses under those sections.
Section 10-857. Insurance
A corporation may purchase and maintain insurance, including
retrospectively rated and self-insured programs, on behalf of an individual who
is or was a director or officer of the corporation or who, while a director or
officer of the corporation, is or was serving at the request of the corporation
as a director, officer, partner, trustee, employee or agent of another foreign
or domestic corporation, partnership, joint venture, trust, employee benefit
plan or other entity, against liability asserted against or incurred by the
individual in that capacity or arising from the individual's status as a
director or officer whether or not the corporation would have power to indemnify
or advance expenses to the individual against the same liability under this
article.
Section 10-858. Application of article
A. A provision that treats a corporation's indemnification of or advance
for expenses to directors and that is contained in its articles of
incorporation, its bylaws, a resolution of its shareholders or board of
directors or a contract or otherwise is valid only if and to the extent the
provision is consistent with this article. If the articles of incorporation
limit indemnification or advances for expenses, indemnification and advances for
expenses are valid only to the extent consistent with the articles.
B. This article does not limit a corporation's power to pay or reimburse
expenses incurred by a director in connection with the director's appearance as
a witness in a proceeding at a time when the director has not been made a named
defendant or respondent to the proceeding.
C. This article does not limit a corporation's power to indemnify, advance
expenses or maintain insurance on behalf of the employee or agent.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
In September 1996, the Company issued $14.3 million of Series C 10% Senior
Subordinated Convertible Notes (the "10% Notes") in a private placement to
accredited investors. During 1997, $9,550,000 of the 10% Notes and $475,548 of
accrued interest were converted into 679,633 shares of the Company's Common
Stock. The 10% Notes presently outstanding bear interest at 10% payable
semi-annually and are due in September 1999. These remaining 10% Notes are
convertible into approximately 280,000 shares of the Company's Common Stock. The
Company has the right to call the remaining 10% Notes at par plus accrued
interest.
In November 1998, the Company undertook to refinance at maturity its 12%
Senior Subordinated Notes and completed a private placement of $3,238,000 of
9-1/2% Senior Subordinated Notes (the "9-1/2% Notes"), comprised of cash
proceeds of approximately $1.0 million and the exchange of approximately $2.2
million of the 12% Notes. The 9-1/2% Notes may be redeemed at the Company's
option, upon at least 30 days' notice, in whole or in part on a pro rata basis,
on and after April 30, 1999, at 102% of par value plus all accrued interest
payable to the date of redemption. Proceeds received from the 9-1/2% Notes were
used in the retirement of the 12% Notes upon maturity. The 9-1/2 % Notes become
due on September 30, 2003 and bear interest payable semi-annually.
In March 1999, the Company completed a private placement to an accredited
investor of $7.5 million of the Company's Series A Convertible Preferred Stock
(the "Series A"). Under the terms of this offering the Series A bears a coupon
rate of 6% per annum payable quarterly in cash, or in stock that will be valued
at 90% of fair market value at the time of payment. The Series A is subject to
mandatory redemption at May 1, 2004. The Series A may be converted into shares
of the Company's Common Stock at any time at 101% of the average closing price
of any 15 out of the 30 consecutive trading days preceding conversion, up to a
specified maximum conversion price (the "Conversion Cap"). The Conversion Cap
for the first twelve months is $8.60 per share and is subject to an annual
adjustment to the lesser of the then existing Conversion Cap or 130% of the then
current market price of the Company's Common Stock. Conversion of the Series A
is limited to 10% of the initial amount per month,
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<PAGE> 23
accumulating monthly up to a maximum of 30% of the accumulated convertible
amount in any month. The Company may require the conversion of the Series A if
the market price of the Company's Common Stock exceeds the Conversion Cap by at
least 50% for at least 20 consecutive trading days, subject to the same
conversion limitations imposed upon the Series A holders. The Common Stock being
registered pursuant to this Registration Statement is to account for the
prospective issuance of Common Stock in the full amount of the Series A, plus
all accrued and unpaid dividends thereon, outstanding at any given time upon
notice of the Series A holders of such holders' election to convert their Series
A into Common Stock. As of the date of this Registration Statement, no Series A
has been converted into Common Stock.
Other than the foregoing transactions, the Registrant has not offered or
sold any unregistered securities within the last three years.
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<PAGE> 24
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
a. Exhibits. The following Exhibits are included pursuant to Regulation
S-K.
No. Description Reference
3.1 Articles of Incorporation of Simula, Inc., as amended and
restated....................................................... (4)
3.2 Bylaws of Simula, Inc., as amended and restated................ (1)
4.2 Indenture dated December 17, 1993, as amended.................. (2)
4.5 Supplemental Indenture No. 2 dated September 12, 1996, entered
into in connection with the Company's issuance of Series C 10%
Senior Subordinated Convertible Notes.......................... (6)
4.6 Supplemental Indenture No. 3, effective March 14, 1997,
amending the Indenture of Simula, Inc. dated December 17, 1993. (7)
4.7 Indenture dated April 1, 1997, in connection with the
Company's issuance of the 8% Senior Subordinated Convertible
Notes due May 1, 2004.......................................... (7)
4.8 Certificate of Designation, Preferences, Rights and
Privileges of the $7,500,000 Series A Preferred Stock......... (12)
*5. Opinion of Bradley P. Forst, General Counsel of Simula, Inc.
10.11 1992 Stock Option Plan, as amended effective September 15, 1998 (10)
10.12 1992 Restricted Stock Plan..................................... (1)
10.21 1994 Stock Option Plan, as amended effective September 15, 1998 (10)
10.24 Senior Credit Agreement with Bank One, Arizona, N.A. and
Imperial Bank, Arizona dated November 6, 1998.................. (10)
10.25 Modification Agreement with Bank One, Arizona, N.A. and
Imperial Bank, Arizona dated February 12, 1999................. (11)
10.26 Simula, Inc. Employee Stock Purchase Plan...................... (4)
10.29 Form of Change of Control Agreements, as amended and restated,
between the Company and Donald W. Townsend, Bradley P. Forst,
James A. Saunders, Donald Rutter, and Randall L. Taylor........ (9)
10.30 Form of Employment Agreements between the Company and Donald
W. Townsend, Bradley P. Forst, James A. Saunders, and Randall
L. Taylor ..................................................... (8)
10.31 Modification Agreement No. 2 with Bank One, Arizona, N.A. and
Imperial Bank, Arizona, dated April 28, 1999................... (12)
10.32 Form of Employment Agreement between the Company and James C.
Dodd........................................................... (12)
10.33 Form of Change of Control Agreement between the Company and
James C. Dodd.................................................. (12)
18. Preference Letter re: change in accounting principles.......... (5)
21. Subsidiaries of the Company.................................... (8)
*23.1 Consent of Deloitte & Touche, LLP
24. Powers of Attorney - Directors................................. (8)
27. Financial Data Schedule........................................ (12)
- ----------
* Filed herewith.
(1) Filed with Registration Statement on Form S-18, No. 33-46152-LA, under the
Securities Act of 1933, effective April 13, 1992.
(2) Filed with Registration Statement on Form SB-2, No. 33-61028 under the
Securities Act of 1933, effective December 10, 1993.
(3) Filed with Registration Statement on Form SB-2, No. 33-87582, under the
Securities Act of 1933, effective December 28, 1994.
(4) Filed with Definitive Proxy on May 14, 1996, for the Company's Annual
Meeting of Shareholders held on June 20, 1996.
(5) Filed with report on Form 10-Q/A for the quarter ended June 30, 1996.
(6) Filed with report on Form 10-K for the year ended December 31, 1996.
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<PAGE> 25
(7) Filed with registration Statement on Form S-3, No. 333-13499, under the
Securities Act of 1993, effective April 24, 1997.
(8) Filed with report on Form 10-K for the year ended December 31, 1997.
(9) Filed with report on Form 10-Q for the quarter ended March 31, 1998.
(10) Filed with report on Form 10-Q for the quarter ended September 30, 1998.
(11) Filed with report on Form 10-K for the year ended December 31, 1998.
(12) Filed with report on Form 10-Q for the Quarter ended March 31, 1999.
- -----------
ITEM 17. UNDERTAKINGS
(a) RULE 415 OFFERING
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;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of Securities offered (if the total dollar value of
securities offered would not exceed that which was registered) any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the Securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(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.
(b) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
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<PAGE> 26
(e) INCORPORATED ANNUAL AND QUARTERLY REPORTS
The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(h) REQUEST FOR ACCELERATION OF EFFECTIVE DATE
(3) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 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 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 Act and will
be governed by the final adjudication of such issue.
(i) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of a registration statement in reliance upon Rule 430A and contained
in the form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
II-10
<PAGE> 27
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-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Phoenix, State of Arizona on May 27, 1999.
SIMULA, INC.
By /s/ Donald W. Townsend
-------------------------------------
Donald W. Townsend, Chief Executive
Officer and President
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE AND TITLE DATE
------------------- ----
/s/ Donald W. Townsend May 27, 1999
- ---------------------------------------------------
Donald W. Townsend, Chief Executive Officer,
President, and Director
/s/ Bradley P. Forst
- ---------------------------------------------------
Bradley P. Forst, Executive Vice President, May 27, 1999
General Counsel, Secretary, and Director
/s/ James C. Dodd
- ---------------------------------------------------
James C. Dodd, Executive Vice President, Treasurer, May 27, 1999
and Chief Financial Officer
/s/ James A. Saunders
- ---------------------------------------------------
James A. Saunders, Executive Vice President,
Chief Operating Officer, and Director
*
- ---------------------------------------------------
Stanley P. Desjardins, Chairman
*
- ---------------------------------------------------
James C. Withers, Director
*
- ---------------------------------------------------
Robert D. Olliver, Director
*
- ---------------------------------------------------
John M. Leinonen, Director
*
- ---------------------------------------------------
Lon A. Offenbacher, Director
*By: /s/ Bradley P. Forst
----------------------------------------------
Bradley P. Forst, May 27, 1999
Attorney-in-Fact
II-11
<PAGE> 1
May 26, 1999
Board of Directors
Simula, Inc.
2700 North Central Avenue
Suite 1000
Phoenix, Arizona 85004
Re: Registration Statement on Form S-3 - 2,000,921 Shares of Common Stock
Gentlemen:
As Executive Vice President and General Counsel of Simula, Inc.
("Company"), I have reviewed the above-captioned Registration Statement on Form
S-3 under the Securities Act of 1933, as amended, which the Company intends to
file with the Securities and Exchange Commission with respect to the offer and
sale of up to 2,000,921 shares of Common Stock of the Company (the "Common
Stock") pursuant to the prospective conversion of the Company's Series A
Convertible Preferred Stock into Common Stock (the "Securities").
I have examined the Company's Articles of Incorporation, as amended and
restated, bylaws, minutes of the Company's Board of Directors meetings, and such
other records and documents as I have deemed relevant for purposes of rendering
this opinion. Based upon the foregoing, I am of the opinion that the Securities,
when issued and sold as set forth in the Registration Statement, will be legally
and validly issued, fully paid and non-assessable.
Very truly yours,
SIMULA, INC.
/s/ Bradley P. Forst
Bradley P. Forst
Executive Vice President and General Counsel
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Simula, Inc. on Form S-3 of our report dated March 26, 1999, appearing in the
Annual Report on Form 10-K of Simula, Inc. for the year ended December 31, 1998.
We also consent to the reference to us under the heading "Experts" in the
Prospectus, which is a part of this Registration Statement.
DELOITTE & TOUCHE LLP
Phoenix, Arizona
May 26, 1999
