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EXHIBIT 99.1
PROXY AGREEMENT
By this Proxy Agreement, entered into as of this 29th day of September,
2000 ("Agreement"), the parties identified below state, confirm, represent,
warrant and agree as follows:
1. RECITALS
1.1. OUTSIDE DIRECTORS. Xxxx X. Xxxxxxxx ("Xxxxxxxx"), Xxx X. Xxxxxxxxxxx
("Xxxxxxxxxxx"), Xxxxxx X. Xxxxxxx ("Xxxxxxx"), Xxxxx X. Xxxxxxx
("Xxxxxxx") and S. Xxxxxx Xxxxxxx ("Xxxxxxx") are each members of the
Board of Directors of Simula, Inc., an Arizona corporation ("Simula"
or the "Company"). Leinonen, Offenbacher, Olliver, Xxxxxxx and Xxxxxxx
are hereinafter collectively referred to as the "Director Parties,"
and individually as a "Director Party."
1.2. DESJARDINS. Xxxxxxx X. Xxxxxxxxxx ("Xxxxxxxxxx") 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. COMPANY AS THIRD PARTY BENEFICIARY. Neither the Company nor any of its
subsidiaries is a party to this Agreement. Notwithstanding the
foregoing, the parties hereto expressly acknowledge and agree that the
Company is intended to be a third party beneficiary of this Agreement
and shall be entitled to enforce same.
1.4. PURPOSE OF THIS AGREEMENT. Desjardins and the Director Parties 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.
1.5. 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. NO PROXY CONTEST. In consideration for the commitments and
undertakings by the Company provided for in the Corporate Governance
Agreement between Desjardins and the Company entered into
contemporaneously with this Agreement (the "Corporate Governance
Agreement"), Desjardins agrees that neither he, nor any of his
Affiliates (as defined in Section 2.2), agents or representatives or
any party acting at his instance or on his behalf, shall either alone,
or in concert with each other or any other person or entity, solicit,
induce, encourage or seek to obtain, or cause, solicit, encourage or
induce any other person or entity to solicit or seek to obtain, a
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proxy or other authority to vote with respect to any voting securities
of Simula, including but not limited to the common stock of Simula,
until the later of (i) the date which is two (2) years from the date
of this Agreement; or (ii) the date which is one hundred eighty (180)
days prior to the third annual meeting of shareholders of Simula held
following the date of this Agreement (the "Standstill Period").
Notwithstanding the foregoing, nothing in this Agreement shall
prohibit Desjardins from engaging in communications which encourage
other shareholders of Simula to grant their proxy to vote Simula
securities to those persons appointed by the Board of Directors of
Simula to solicit or vote proxies in connection with any meeting of
Simula shareholders.
2.2. GRANT OF PROXY. In consideration for the commitments and undertakings
by the Company in the Corporate Governance Agreement, Desjardins
hereby irrevocably appoints each of Leinonen, Offenbacher, Olliver,
Xxxxxxx and Xxxxxxx, or their designees, with full power of
substitution, as his proxy agents with the authority to vote any and
all shares of the Common Stock of Simula held by him or any Affiliate
(as hereinafter defined) on any record date established by the Board
of Directors with respect to any meeting of the shareholders of Simula
to be conducted during the 12-month period following the date of this
Agreement (the "Initial Proxy Period") with respect to (i) the
election of directors; (ii) the ratification of auditors; (iii) the
adoption of one or more stock option or other benefit plans,
reincorporation of Simula in a state other than Arizona pursuant to a
change of domicile merger, and any shareholder proposals, or any other
matter to be presented at such meeting other than in connection with
any action required of Desjardins pursuant to that certain Investor
Rights Agreement with Xxxxxx Xxxxxxxxx Capital Partners II, L.P. dated
December 31, 1999, a merger, share exchange, sale of substantially all
of the assets of the Company or amendment to the Articles of
Incorporation that adversely affects Desjardins' rights
disproportionate to those of other shareholders; provided further that
the proxy shall not be used to dissolve the Company. Desjardins
further agrees to execute and deliver upon request and without the
payment of additional consideration, such additional documentation as
the Director Parties may deem necessary and appropriate to effectuate
the foregoing proxy appointment, including but not limited to the
execution of separate proxy documentation. Notwithstanding the
foregoing commitment to execute such additional documentation, the
parties hereto agree that a copy of this Agreement may be presented to
the Inspector of Elections appointed in connection with any
shareholders' meeting conducted during the Initial Proxy Period as an
effective proxy with respect to all shares covered hereby. The parties
further agree that the proxy granted hereby is irrevocable and coupled
with an interest. Each of the Director Parties hereby covenants and
agrees that, he will vote in favor of the actions to be taken pursuant
to the Corporate Governance Agreement unless advised in writing by
legal counsel that it would be a breach of his fiduciary duty to the
Company to do so. For purposes of this Agreement, as it relates to
Desjardins, the term "Affiliate" shall mean (i) any person or entity
who controls, who is controlled by, or is under common control with
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Desjardins; or (ii) any person who has a contract, agreement,
arrangement or understanding with Desjardins, with respect to the
voting, acquisition or disposition of Simula securities.
2.3. MAJORITY VOTE OF DIRECTOR PARTIES TO CONTROL. In the event that a vote
of the Director Parties is not unanimous as to any matter brought
before any meeting of the shareholders of Simula during the Initial
Proxy Period as to which the proxy granted to the Director Parties
pursuant to Section 2.2 is to be exercised, then a vote of a majority
of the Director Parties shall control the voting of the shares subject
to the proxy.
2.4. TERMINATION AND REPLACEMENT OF DIRECTOR PARTIES. Each of the Director
Parties hereby acknowledges and agrees that in the event that, at any
time during the Initial Proxy Period, he should resign or otherwise
cease to be a member of the Company's Board of Directors, then the
proxy granted to such Director Party pursuant to Section 2.2 hereof
shall terminate effective as of the date of such resignation or other
termination of director status; provided that such proxy shall remain
in full force and effect and shall continue to be exercised by the
remaining Director Parties in accordance with Section 2.2 and Section
2.3 of this Agreement. In addition, each of the parties to this
Agreement hereby covenants and agrees that in the event that
additional individuals (who are independent of the Company and its
affiliates) are elected to the Company's Board of Directors during the
Initial Proxy Period to replace any Director Party, then each party
hereto will thereafter use its or his best efforts to cause such newly
elected director(s) to become a party to this Agreement.
2.5. REVOCATION OF PRIOR PROXIES. This Agreement shall serve as a
revocation of, and a consent to the revocation of, any proxy
previously granted by Desjardins with respect to the securities of
Simula.
2.6. AGREEMENT TO GRANT ADDITIONAL PROXIES. Desjardins hereby covenants and
agrees that, upon the expiration of the Initial Proxy Period,
Desjardins shall grant such additional irrevocable proxies to the
Director Parties as may be necessary in order for the Director Parties
to vote any and all shares of the Common Stock of Simula held by
Desjardins or any Affiliate at any meeting of shareholders of the
Company held following the expiration of the Initial Proxy Period but
prior to the expiration of the Standstill Period with respect to any
of the matters described in Section 2.2 of this Agreement. Desjardins
hereby acknowledges and agrees that any attempt by him or any
Affiliate to vote any shares of Simula Common Stock or other
securities during the Standstill Period shall be null and void.
2.7. DESJARDINS AS DIRECTOR. At the 2001 Annual Meeting of Shareholders,
the Director Parties shall vote all shares subject to the proxy
granted by Desjardins in favor of his election to the Board of
Directors of the Company to serve for a term of not less than two (2)
years.
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2.8. AVAILABILITY OF EQUITABLE RELIEF. In the event that any provision of
this Agreement is breached by Desjardins, the Director Parties and the
Company shall be entitled to obtain (i) an injunction restraining such
breach or threatened breach; (ii) specific performance of any
provision of this Agreement including but not limited to the
provisions of Section 2.2 and Section 2.6 hereof, or (iii) an order in
the nature of a declaratory judgment declaring that the proxy granted
hereby is valid and irrevocable, in addition to any other right or
remedy available to the Director Parties and Simula. Desjardins agrees
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.
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:
If to Desjardins: Xxxxxxx X. Xxxxxxxxxx
0000 Xxxxx Xxxxxxxxx Xxxxx
#000
Xxxxx, Xxxxxxx 00000
If to the Director Parties: Xxxx X. Xxxxxxxx
Vice President
Exponent Failure Analysis Associates,
Inc.
Engineering and Scientific Services
00000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxxxx Xxxxx, XX 00000
Xxx X. Xxxxxxxxxxx
Director of Product Engineering
Delphi Interior & Lighting Systems
Troy Engineering Center
MC480-009.T09
0000 Xxxxxx Xxxx
Xxxx, XX 00000-0000
Xxxxxx X. Xxxxxxx
Director, Risk Management Services
Acordia of Arizona
0000 X. Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000-0000
Xxxxx X. Xxxxxxx
Chief Executive Officer
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MER Corporation
0000 x. Xxxx Xxxx
Xxxxxx, XX 00000
S. Xxxxxx Xxxxxxx
Director
Xxxxxx X. Xxxxx Center for
Entrepreneurship
Carnegie Mellon University
Graduate School of Industrial
Administration
000 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
with copies to: Xxxxx Xxxx LLP
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxx
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 upon and inure
to the benefit of the parties hereto and their respective successors
and legal representatives.
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,
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or to perform any other act necessary to effectuate and carry out the
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.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly and delivered as of the date hereof.
DIRECTOR PARTIES:
/s/ Xxxx X. Xxxxxxxx
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XXXX X. XXXXXXXX
/s/ Xxx X. Xxxxxxxxxxx
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XXX X. XXXXXXXXXXX
/s/ Xxxxxx X. Xxxxxxx
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XXXXXX X. XXXXXXX
/s/ Xxxxx X. Xxxxxxx
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XXXXX X. XXXXXXX
/s/ S. Xxxxxx Xxxxxxx
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S. XXXXXX XXXXXXX
XXXXXXX X. XXXXXXXXXX
/s/ Xxxxxxx X. Xxxxxxxxxx
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