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Simula Addresses Corporate Governance Issues

17 October 2000

Simula Addresses Corporate Governance Issues; Three Key Changes Designed to Build Shareholder Value

    PHOENIX--Oct. 16, 2000--Simula Inc. today announced the adoption of new corporate governance priorities and principles for managing the company, a milestone in the company's new initiatives to build shareholder value.
    Brad Forst, recently appointed president and chief executive officer of Simula, said that all members of the company's board of directors and Stan Desjardins, the company's founder, chairman and principal shareholder, have committed to the plan.
    Forst said that the new corporate governance plan addresses three policy areas: board unity; the future make-up of the board; and employment and severance contracts with senior managers.
    First, the company now requires that its board be composed predominantly of outside directors. No member of management other than the CEO will serve on the board. The company intends to recruit and nominate new board candidates in the ordinary course of nominations over the next two years. In addition, as an endorsement of the newly aligned board and executive management, Desjardins, a beneficial owner of nearly 30% of the company's outstanding common stock, has agreed not to seek changes to the board or management.
    Finally, the board and CEO have committed to seek to modify existing management agreements -- notably those covering employment and changes in control -- to align the terms and conditions required to attract and retain executive talent with the interests of shareholders, and to conform to more customary industry practices.
    The arrangements are set out in a proxy agreement and a corporate governance agreement included in a Form 8-K filed by the company on Oct. 13, 2000.
    "We are looking at Simula in a variety of ways -- organizationally, strategically, and economically -- all in an effort to build shareholder confidence," said Forst. "Corporate governance is an important element of this review," he said. Forst was named the company's new president and CEO on Oct. 2, 2000.