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EXHIBIT 99.2
Corporate Governance Agreement
CORPORATE GOVERNANCE AGREEMENT
By this Corporate Governance Agreement, entered into as of this 30th day of
September, 2000 ("Agreement"), the parties identified below state, confirm,
represent, warrant and agree as follows:
1. RECITALS
1.1. SIMULA. Simula, Inc. ("Simula" or the "Company") is a corporation
organized and existing under and by virtue of the laws of the State of
Arizona, with its principal place of business in Phoenix, Arizona.
1.2. DESJARDINS. Stanley P. Desjardins ("Desjardins") is, and was at all
times material hereto, a resident of Maricopa County, Arizona.
Desjardins is the founder of Simula and currently serves as its
Chairman of the Board and owns approximately 28% of the outstanding
Common Stock of the Company.
1.3. PURPOSE OF THIS AGREEMENT. Simula and Desjardins desire to enter into
this Agreement to resolve certain issues that have arisen with respect
to Desjardins' relationship with the Company in order to provide
certainty to the Company, its employees, customers and shareholders
regarding the manner in which the business and corporate governance of
Simula will be conducted for the benefit of Simula and its
shareholders.
1.4. RECITALS PART OF AGREEMENT. The matters set forth in Article 1 of this
Agreement are and shall be deemed to be material and operative
provisions of this Agreement and not mere recitals.
2. TERMS OF AGREEMENT
2.1. CHANGES IN THE MANAGEMENT OF SIMULA. Effective immediately, Simula,
acting through its Board of Directors, shall act to replace Donald
Townsend as the Company's President and Chief Executive Officer with
Bradley Forst, who shall serve in that capacity pursuant to a written
employment agreement to be approved by the Board of Directors. The
Board shall work with the Company's new President and Chief Executive
Officer to effect additional management changes as soon as practicable
and to obtain any necessary approvals for such changes from the
Company's lenders. Without repudiating any existing agreement with the
Company's management, the Company shall review and seek to renegotiate
such agreements to modify the change in control and severance
provisions contained in such agreements in a manner acceptable to the
Board of Directors.
2.2. PUBLIC COMMUNICATIONS. Within 10 days of the execution hereof, the
Company and Desjardins will issue the press release attached hereto as
EXHIBIT A and incorporated herein. During the Standstill Period,
Desjardins agrees to publicly communicate his support for the Company
and the decisions and actions undertaken by the Company at the
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direction of its management or its Board of Directors and to refrain
from any actions or communications that would reasonably be regarded
as expressing a lack of support therefor, unless advised in writing by
legal counsel that he would more likely than not violate his fiduciary
duty to the Company by doing so.
2.3. ACTIVITIES AS CHAIRMAN. In his capacity as Chairman of the Board of
Directors, Desjardins shall undertake only those duties expressly set
forth in the Company's Bylaws or expressly required by law. Desjardins
acknowledges that the Chairman of the Board is not an officer position
and does not carry with it any day-to-day operational duties,
responsibilities or authority. Nothing in this Agreement shall be
deemed to modify the Consulting Agreement between Simula and
Desjardins, in the form attached hereto as EXHIBIT B and incorporated
herein by reference. In --------- his capacity as a Consultant,
Desjardins shall undertake only those duties and activities authorized
by the Consulting Agreement.
2.4. AVAILABILITY OF EQUITABLE RELIEF. The Company and Desjardins mutually
acknowledge and agree that the obligations undertaken by each of them
under this Agreement are special, unique and of an extraordinary
character, and that Simula and it shareholders, officers and directors
on the one hand, and Desjardins on the other hand, could not be
adequately compensated by money damages for a breach of any of the
provisions of this Agreement by the other party. In the event that any
provision of this Agreement is breached by either party hereto, the
non-breaching party shall be entitled to obtain (i) an injunction
restraining such breach or threatened breach; and (ii) specific
performance of any provision of this Agreement, in addition to any
other right or remedy available to such non-breaching party. The
parties hereto agree that a bond or other security shall not be a
condition to the issuance of such injunction and/or for the ordering
of such specific performance.
2.5. CHAIRMAN'S STATUS. For a period of two (2) years from the date hereof,
Desjardins will continue to serve as Chairman of the Board of
Directors of Simula until his successor is duly elected and qualified
in accordance with the Company's Articles of Incorporation and Bylaws.
He shall be included in the Company's slate of director nominees at
the 2001 Annual Meeting of Shareholders to serve on the Board of
Directors for a term of not less than two (2) years.
2.6. BOARD NOMINATIONS. Effective immediately, for a period of not less
than two years, the Board will implement a policy of nominating
persons to serve as directors who are not employees of the Company,
except that the Board will continue to be permitted to nominate, in
its discretion, the Company's Chief Executive Officer.
3. GENERAL
3.1. NOTICES. Any notice or other communication relating to this Agreement
and any and all communications which might become necessary to
effectuate the purposes of this Agreement, shall be delivered to the
parties by certified mail, facsimile, a recognized overnight national
delivery service, at the following addresses:
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If to Desjardins: Stanley P. Desjardins
5200 South Lakeshore Drive
#240
Tempe, Arizona 85283
If to Simula: Simula, Inc.
2700 North Central Avenue
Suite 1000
Phoenix, Arizona 85004
Fax: (602) 631-9005
Attention: Bradley P. Forst
with copies to: Bryan Cave LLP
2800 North Central Avenue
Suite 2100
Phoenix, Arizona 85004
Fax: (602) 364-7070
Attention: Frank M. Placenti, Esq.
3.2. MODIFICATIONS. No modification or amendment to this Agreement shall be
valid, unless in writing and signed by the parties to this Agreement.
3.3. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on and inure
to the benefit of the heirs, personal representatives, predecessors,
successors and assigns of the parties hereto.
3.4. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Arizona
applicable to agreements made or to be performed entirely within such
state, without regard to the conflict of law principles of such state.
3.5. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall together be considered one and the
same agreement, and shall become effective when one or more of such
counterparts have been signed by each of the parties.
3.6. SEVERABILITY. In the event that any provision of this Agreement is
declared to be invalid or illegal, for any reason, this Agreement
shall remain in full force and effect and the same shall be
interpreted as though such invalid or illegal provision was not a part
hereof.
3.7. ATTORNEYS' FEES. In the event that any party hereto is required to
commence or otherwise participate in an action or other proceeding to
enforce any right arising under this Agreement, the party prevailing
in such action or other proceeding shall be entitled to recover all
costs and attorneys' fees, such fees to be set by the court or other
tribunal, and not by the jury.
3.8. ADDITIONAL INSTRUMENTS AND ACTIONS. The parties hereto expressly agree
to execute any or further additional instruments as may be required,
or to perform any other act necessary to effectuate and carry out the
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purposes of this Agreement, without the payment of additional
consideration.
3.9. HEADINGS; INTERPRETATION. The headings used herein are used for
convenience of reference only and are not intended to define, limit or
describe the scope or intent of any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly and delivered as of the date hereof.
SIMULA, INC.
By: /s/ Brad Forst
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Its EVP - GENERAL COUNSEL
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STANLEY P. DESJARDINS
/s/ Stanley P. Desjardins
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