Exhibit
10.13


 


EMPLOYMENT AGREEMENT


 


THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered
into effective as of the 19th day of August, 2004, by and between EVANS &
SUTHERLAND COMPUTER CORPORATION, a Utah corporation (the “Company”) and
Kevin A. Paprzycki (the “Executive”).


 


W I T N E S S E T H:


 


WHEREAS, the Executive has provided services to the Company in an
executive capacity and desires to continue to provide such services;


 


WHEREAS, the Company desires to have the benefit of the Executive’s efforts
and services;


 


WHEREAS, the Company and the Executive desire to terminate all prior
employment agreements with the Company, if any; and


 


WHEREAS, the Company determined that it is appropriate and in the best
interests of the Company to provide to the Executive protection in the event of
certain terminations of the Executive’s employment relationship with the
Company in accordance with the terms and conditions contained herein and the
Executive desires to have such protection.


 


NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the Company and the Executive
hereto mutually covenant and agree as follows:


 


1.                                       DEFINITIONS.


 


Whenever used in this Agreement, the following terms shall have the
meanings set forth below:


 


(a)                                  “Accrued
Benefits” shall mean the amount equal to the sum of the following to the
extent not previously paid:


 


(i)                                     All salary earned
or accrued through the Termination Date;


 


(ii)                                  Reimbursement
pursuant to Section 6(d) for any and all monies expended by the Executive
and not advanced by Company in connection with the Executive’s employment for
reasonable and necessary expenses incurred by the Executive through the
Termination Date;


 


(iii)                               Any and all other cash
benefits of deferred compensation plans previously earned through the
Termination Date unless deferred at the election of


 





















 


the
Executive for payment at another time or the applicable deferred compensation
plan provides for payment at another time;


 


(iv)                              The
full amount of any bonus earned in a prior period and payable to the Executive
in accordance with Section 6(b) herein, subject to the limitations in Section 10
and Section 12; and


 


(v)                                 All
other payments and benefits to which the Executive may be entitled under the
terms of any benefit plan of the Company, which as of the Termination Date, is
applicable to all regular full-time employees of the Company generally.


 


(b)                                 “Act”
shall mean the Securities Exchange Act of 1934;


 


(c)                                  “Affiliate”
shall have the same meaning as given to that term in Rule 12b-2 of Regulation
12B promulgated under the Act;


 


(d)                                 “Base
Period Income” shall be an amount equal to the Executive’s “annualized
includable compensation” for the “base period” as defined in Sections
280G(d)(1) and (2) of the Code and the regulations adopted thereunder;


 


(e)                                  “Beneficial
Owner” shall have the same meaning as given to that term in Rule 13d-3 of
the Act, provided that any pledgee of Company voting securities shall not be
deemed to be the Beneficial Owner thereof prior to its disposition of, or
acquisition of voting rights with respect to, such securities;


 


(f)                                    “Board”
shall mean the Board of Directors of the Company;


 


(g)                                 “Cause”
shall mean any of the following:


 


(i)                                     The engaging by
the Executive in fraudulent conduct, as evidenced by a determination in a
binding and final judgment, order or decree of a court or administrative agency
of competent jurisdiction, in effect after exhaustion or lapse of all rights of
appeal, in an action, suit or proceeding, whether civil, criminal,
administrative or investigative, which the Chief Executive Officer of the
Company determines, in his sole discretion, has a significant adverse impact on
the Company or on the performance of the Executive’s duties to the Company;


 


(ii)                                  Conviction of a
felony, as evidenced by a binding and final judgment, order or decree of a
court of competent jurisdiction, in effect after exhaustion or lapse of all
rights of appeal, which the Chief Executive Officer of the Company determines,
in his sole discretion, has a significant adverse impact on the Company or on
the performance of the Executive’s duties to the Company;


 


(iii)                               Neglect or refusal by
the Executive to perform the Executive’s duties or responsibilities; or


 


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(iv)                              A significant
violation by the Executive of the Company’s established policies and
procedures;


 


Notwithstanding the
foregoing, Cause shall not exist under Sections 1(g)(iii)
and (iv) herein unless the Company furnishes written notice to the Executive of
the specific offending conduct and the Executive fails to correct such
offending conduct within the thirty (30) day period commencing on the receipt
of such notice.


 


(h)                                 “Change
of Control” shall mean a change in ownership or managerial control of the
stock, assets or business of the Company resulting from one or more of the
following circumstances:


 


(i)                                     A change of
control of the Company, of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under
the Act, or any successor regulation of similar import, regardless of whether
the Company is subject to such reporting requirement;


 


(ii)                                  A change in ownership
of the Company through a transaction or series of transactions, such that any
Person or Persons (other than any current officer of the Company or member of
the Board) become(s), in the aggregate, the Beneficial Owner(s), directly or
indirectly, of securities of the Company representing thirty percent (30%) or
more of the Company’s then outstanding securities;


 


(iii)                               Any consolidation or
merger of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the common stock of the Company
would be converted into cash (other than cash attributable to dissenters’
rights), securities or other property provided by a Person or Persons other
than the Company, other than a consolidation or merger of the Company in which
the holders of the common stock of the Company immediately prior to the
consolidation or merger have approximately the same proportionate ownership of
common stock of the surviving corporation immediately after the consolidation
or merger;


 


(iv)                              The shareholders
of the Company approve a sale, transfer, liquidation or other disposition of
all or substantially all of the assets of the Company to a Person or Persons;


 


(v)                                 During any period of
two (2) consecutive years, individuals who, at the beginning of such period,
constituted the Board of Directors of the Company cease, for any reason, to
constitute at least a majority thereof, unless the election or nomination for
election of each new director was approved by the vote of at least two-thirds
(2/3) of the directors then still in office who were directors at the beginning
of the period;


 


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(vi)                              The filing of a
proceeding under Chapter 7 of the Federal Bankruptcy Code (or any successor or
other statute of similar import) for liquidation with respect to the Company;
or


 


(vii)                           The filing of a proceeding
under Chapter 11 of the Federal Bankruptcy Code (or any successor or other
statute of similar import) for reorganization with respect to the Company if in
connection with any such proceeding, this Agreement is rejected, or a plan of
reorganization is approved an element of which plan entails the liquidation of
all or substantially all the assets of the Company.


 


A “Change of Control”
shall be deemed to occur on the actual date on which any of the foregoing
circumstances shall occur; provided, however, that in connection with a “Change
of Control” specified in Section 1(h)(vii), a “Change
of Control” shall be deemed to occur on the date of the filing of the relevant
proceeding under Chapter 7 or Chapter 11 of the Federal Bankruptcy Code (or any
successor or other statute of similar import). 
Notwithstanding the foregoing, a “Change of Control” shall not include
any transaction that constitutes a “Rule 13e-3 transaction” under Rule 13e-3 of
the Act or an “issuer tender offer” under Rule 13e-4 of the Act.


 


(i)                                     “Change
of Control Period” shall mean the period commencing 180 days immediately
prior to the date a Change of Control is deemed to occur pursuant to Section 1(h),
herein, and ending on the second anniversary of such date of Change of Control;


 


(j)                                     “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time;


 


(k)                                  “Disability”
shall mean a physical or mental condition whereby the Executive is unable to
perform on a full-time basis the customary duties of the Executive under this
Agreement;


 


(l)                                     “Federal
Short Term Rate” shall mean the rate defined in Section 1274(d)(1)(C)(i) of the Code;


 


(m)                               “Good
Reason” shall mean any of the following:


 


(i)                                     The required
relocation of the Executive, without the Executive’s consent, to an employment
location which is more than seventy-five (75) miles from the Executive’s
employment location on the day preceding the date of this Agreement; or


 


(ii)                                  Breach or violation
of any material provision of this Agreement by the Company, which is not
remedied within five business days following notice to the Company by the
Executive.


 


(n)                                 “Good
Reason During a Change of Control” shall mean any
of the following events occurring during a Change of Control Period:


 


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(i)                                     The required
relocation of the Executive, without the Executive’s consent, to an employment
location which is more than seventy-five (75) miles from the Executive’s
employment location on the day preceding the date of this Agreement;


 


(ii)                                  The removal of the
Executive from or any failure to reelect the Executive to any of the positions
held by the Executive during the 180-day period immediately preceding the
Change of Control Period, except in the event that such removal or failure to
reelect relates to the termination by the Company of the Executive’s employment
for Cause or by reason of death, Disability or voluntary retirement;


 


(iii)                               A significant adverse
change, without the Executive’s written consent, in the nature or scope of the
Executive’s authority, powers, functions, duties or responsibilities that
existed during the 180-day period immediately preceding the Change of Control
Period, or a material reduction in the level of support services, staff,
secretarial and other assistance, office space and accoutrements available to a
level below that which was provided to the Executive during the 180-day period
immediately preceding the Change of Control Period, and that which is necessary
to perform any duties assigned to the Executive during the 180-day period
immediately preceding the Change of Control Period; or


 


(iv)                              Breach or
violation of any material provision of this Agreement by the Company, which is
not remedied within five business days following notice to the Company by the
Executive;


 


(o)                                 “Gross
Income” shall mean the Executive’s current calendar year targeted
compensation under Sections 6(a) and (b) of this Agreement;


 


(p)                                 “Notice
of Termination” shall mean the notice described in Section 14 herein;


 


(q)                                 “Person”
shall mean any individual, partnership, joint venture, association, trust,
corporation or other entity, other than an employee benefit plan of the Company
or an entity organized, appointed or established pursuant to the terms of any
such benefit plan;


 


(r)                                    “Termination
Date” shall mean, except as otherwise provided in Section 14 herein,


 


(i)                                     The Executive’s
date of death;


 


(ii)                                  Thirty (30) days
after the delivery of the Notice of Termination terminating the Executive’s
employment on account of Disability pursuant to Section 9 herein, unless
the Executive returns on a full-time basis to the performance of his or her
duties prior to the expiration of such period;


 


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(iii)                               Thirty
(30) days after the delivery of the Notice of Termination if the Executive’s
employment is terminated by the Executive voluntarily;


 


(iv)                              Thirty
(30) days after the delivery of the Notice of Termination if the Executive’s
employment is terminated by the Company for any reason other than death or
Disability; or


 


(v)                                 The
date the Executive is terminated for Cause.


 


(s)                                  “Termination
Payment” shall mean the payment described in Section 13 herein;


 


(t)                                    “Total
Payments” shall mean the sum of the Termination Payment and any other “payments
in the nature of compensation” (as defined in Section 280G of the Code and
the regulations adopted thereunder) to or for the benefit of the Executive, the
receipt of which is contingent on a Change of Control and to which Section 280G
of the Code applies.


 


2.                                       EMPLOYMENT.


 


The Company hereby agrees to employ the Executive and the Executive
hereby agrees to serve the Company, on the terms and conditions set forth
herein.


 


3.                                       TERM.


 


The employment of the Executive by the Company pursuant to the
provisions of this Agreement shall commence on the date hereof and end on that
date employment of the Executive is terminated pursuant to the terms and
conditions of either Section 8, 9, 10, 11 or 12, herein.


 


4.                                       POSITIONS
AND DUTIES.


 


The Executive shall serve as Chief Financial Officer and Secretary of
the Company and in such additional capacities as set forth in Section 7
herein.  In connection with the foregoing
positions, the Executive shall have such duties, responsibilities and authority
as may from time to time be assigned to the Executive by the Chief Executive
Officer.  The Executive shall devote
substantially all the Executive’s working time and efforts to the business and
affairs of the Company.  The Chief
Executive Officer, in his or her sole discretion, may alter, modify, or change
the Executive’s duties, offices, positions, responsibilities and obligations
set forth in this Agreement at any time, consistent with the status of a senior
executive of the Company.


 


5.                                       PLACE
OF PERFORMANCE.


 


In connection with the Executive’s employment by the Company, the
Executive shall be based at the principal executive offices of the Company in
Salt Lake City, Utah except for required travel on Company business.


 


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6.                                       COMPENSATION
AND RELATED MATTERS.


 


(a)                                  Salary.  The Company shall pay to the Executive an
annualized base salary at a rate of $135,000.00 in equal installments as nearly
as practicable on the Company’s regular payroll dates, in arrears.  Such annualized base salary may be increased
from time to time in accordance with normal business practices of the
Company.  The annualized base salary of
the Executive shall not be decreased below its then existing amount during the
term of this Agreement;


 


(b)                                 MIP.  Subject to the Company’s right to terminate
or amend, at any time with or without notice to the Executive, the Evans &
Sutherland Management Incentive Plan (the “MIP”), the Executive shall be
entitled to participate in the MIP as agreed in writing in a MIP document;


 


(c)                                  Executive
Savings Plan.  Subject to the Company’s
right to terminate or amend, at any time with or without notice to the
Executive, the Company’s Executive Savings Plan, the Executive shall be
entitled to participate in the Executive Savings Plan according to the terms
and conditions of the Executive Savings Plan.


 


(d)                                 Expenses.  The Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the Executive in
performing services hereunder, including all expenses for travel and living
expenses while away from home on business or at the request of and in the
service of the Company, provided that such expenses are incurred and accounted
for in accordance with the policies and procedures established by the Company
at the time incurred;


 


(e)                                  Other
Benefits.  The Company shall provide
the Executive with all other benefits normally provided to an employee of the
Company similarly situated to the Executive, including being added as a named officer on the Company’s existing
directors’ and officers’ liability insurance policy.  Such D&O policy and replacement or
successor policies, including any extended reporting period for a current
policy in the event the current policy is written on a claims made basis, shall
provide continuous coverage for claims which may be brought against Executive
in connection with Executive’s employment while a named officer of the Company
regardless of when a claim is made, including claims brought post-termination.
 In the event of a Change of Control, the Executive will be a named
officer under a policy that provides continuous coverage comparable to coverage
in effect before the Change of Control.


 


(f)                                    Vacations.  The Executive shall be entitled to the number
of vacation days in each calendar year, and to compensation in respect of
earned but unused vacation days, determined in accordance with the Company’s
vacation plan as in effect from time to time. 
The Executive shall also be entitled to all paid holidays given by the
Company to its executives; and


 


(g)                                 Services
Furnished.  The Company shall furnish
the Executive with office space, and such other facilities and services as
shall be suitable to the Executive’s position and adequate for the performance
of the Executive’s duties as set forth in Section 4 hereof.


 


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7.                                       OFFICES.


 


The Executive agrees to serve without additional compensation, if
elected or appointed thereto, in one or more executive offices of the Company,
or any affiliate or subsidiary of the Company, or as a member of the board of
directors of any subsidiary or affiliate of the Company; provided, however,
that the Executive is indemnified for serving in any and all such capacities on
a basis no less favorable than is currently provided in the Company’s bylaws,
or otherwise.


 


8.                                       TERMINATION
AS A RESULT OF DEATH.


 


If the Executive shall die during the term of this Agreement, the
Executive’s employment shall terminate on the Executive’s date of death and the
Executive’s surviving spouse, or the Executive’s
estate if the Executive dies without a surviving spouse, shall be entitled to
the Executive’s Accrued Benefits as of the Termination Date and the applicable
Termination Payment.


 


9.                                       TERMINATION
FOR DISABILITY.


 


If, as a result of the Executive’s Disability, the Executive shall have
been unable to perform the Executive’s duties hereunder on a full-time basis
for four (4) consecutive months and within thirty (30) days after the Company
provides the Executive with a Termination Notice, the Executive shall not have
returned to the performance of the Executive’s duties on a full-time basis, the
Company may terminate the Executive’s employment, subject to Section 14
herein.  During the term of the Executive’s
Disability prior to termination, the Executive shall continue to receive all
salary and other benefits payable under Section 6 herein, including
participation in all employee benefit plans, programs and arrangements in which
the Executive was entitled to participate immediately prior to the Disability; provided,
however, that the Executive’s continued participation is permitted under the
terms and provisions of such plans, programs and arrangements.  In the event that the Executive’s
participation in any such plan, program or arrangement is barred as the result
of such Disability, the Executive shall be entitled to receive an amount equal
to the contributions, payments, credits or allocations which would have been
paid by the Company to the Executive, to the Executive’s account or on the
Executive’s behalf under such plans, programs and arrangements.  In the event the Executive’s employment is
terminated on account of the Executive’s Disability in accordance with this Section 9,
the Executive shall receive the Executive’s Accrued Benefits as of the Termination
Date and shall remain eligible for all benefits provided by any long-term
disability programs of the Company in effect at the time of such termination.  The Executive shall also be entitled to the
Termination Payment described in Section 13(a).


 


10.                                 TERMINATION
FOR CAUSE.


 


If the Executive’s employment with the Company is terminated by the
Company for Cause, subject to the procedures set forth in Section 14
herein, the Executive shall be entitled to receive the Executive’s Accrued
Benefits as of the Termination Date, however, the Executive’s Accrued Benefits
will not include any amount for bonus under Section 1(a)(iv).  The Executive shall not be entitled to
receipt of any Termination Payment.


 


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11.                                 OTHER
TERMINATION BY COMPANY.


 


From and after the date of this Agreement, provided that the Company
furnishes thirty (30) days prior written notice to the Executive, the Company
shall have the right to terminate this Agreement at any time, with or without
Cause.  If the Executive’s employment
with the Company is terminated by the Company other than by reason of death,
Disability or Cause, subject to the procedures set forth in Section 14
herein, the Executive (or in the event of the Executive’s death following the
Termination Date, the Executive’s surviving spouse or the Executive’s estate if
the Executive dies without a surviving spouse) shall receive the Executive’s
Accrued Benefits and the applicable Termination Payment.  The Executive shall not, in connection with
any consideration receivable in accordance with this Section 11, be
required to mitigate the amount of such consideration by securing other
employment or otherwise and such consideration shall not be reduced by reason
of the Executive securing other employment or for any other reason.


 


12.                                 VOLUNTARY
TERMINATION BY EXECUTIVE.


 


From and after the date of this Agreement, provided that the Executive
furnishes thirty (30) days prior written notice to the Company, the Executive
shall have the right to voluntarily terminate this Agreement at any time.  If the Executive’s voluntary termination is
without Good Reason or without Good Reason During a Change of Control, the
Executive shall receive the Executive’s Accrued Benefits as of the Termination
Date and shall not be entitled to any Termination Payment, however, the
Executive’s Accrued Benefits will not include any amount for bonus under Section 1(a)(iv).  If the
Executive’s voluntary termination is for Good Reason or Good Reason During a
Change of Control, the Executive (or in the event of the Executive’s death
following the Termination Date, the Executive’s surviving spouse or the
Executive’s estate if the Executive dies without a surviving spouse) shall
receive the Executive’s Accrued Benefits and the applicable Termination
Payment.  The Executive shall not, in
connection with any consideration receivable in accordance with this Section 12,
be required to mitigate the amount of such consideration by securing other
employment or otherwise and such consideration shall not be reduced by reason
of the Executive securing other employment or for any other reason.


 


13.                                 TERMINATION
PAYMENT.


 


(a)                                  If
the Executive’s employment is terminated as a result of death or Disability,
the Executive shall receive a Termination Payment equal to one (1.0) times the
Executive’s Gross Income.  The Company
will also pay the full medical, dental, and vision premiums for continuation
coverage under COBRA for the Executive and dependents who qualify for
continuation coverage under COBRA for one year following the Termination Date.


 


(b)                                 If,
prior to a Change of Control Period, the Executive’s employment is terminated
by the Executive for Good Reason or by the Company other than by reason of
death, Disability or Cause, the Termination Payment payable to the Executive by
the Company or an affiliate of the Company shall be one (1.0) times the
Executive’s Gross Income.  The Company
will pay the full medical, dental, and vision premiums for continuation
coverage under COBRA for the Executive and dependents who qualify for continuation
coverage under COBRA for one year following the Termination Date.


 


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(c)                                  If,
during a Change of Control Period, the Executive’s employment is terminated by
the Executive for Good Reason During a Change of Control or by the Company for
any reason other than death, Disability, or Cause, the Termination Payment
payable to the Executive by the Company or an affiliate of the Company shall be
one (1.0) times the Executive’s Gross Income. 
The Company will pay the full medical, dental and vision premiums for
continuation coverage under COBRA for the Executive and dependents who qualify
for continuation coverage under COBRA for one (1) year following the
Termination Date.


 


(d)                                 It
is the intention of the Company and the Executive that the benefits under this
Agreement shall be capped such that no portion of the Termination Payment and
any other “payments in the nature of compensation” (as defined in Section 280G
of the Code and the regulations adopted thereunder) to or for the benefit of
the Executive under this Agreement, or under any other agreement, plan or
arrangement, shall be deemed to be an “excess parachute payment” as defined in Section 280G
of the Code.  It is agreed that the
present value of the Total Payments shall not exceed an amount equal to two and
ninety-nine hundredths (2.99) times the Executive’s Base Period Income, which
is the maximum amount which the Executive may receive without becoming subject
to the tax imposed by Section 4999 of the Code or which the Company may
pay without loss of deduction under Section 280G(a)
of the Code.  Present value for purposes
of this Agreement shall be calculated in accordance with the regulations issued
under Section 280G of the Code. 
Within sixty (60) days following delivery of the Notice of Termination
or notice by the Company to the Executive of its belief that there is a payment
or benefit due the Executive which will result in an excess parachute payment
as defined in Section 280G of the Code, the Executive and the Company
shall, at the Company’s expense, obtain such opinions as more fully described
hereafter, which need not be unqualified, of legal counsel and certified public
accountants or a firm of recognized executive compensation consultants.  The Executive shall select said legal
counsel, certified public accountants and executive compensation consultants;
provided, however, that if the Company does not accept one (1) or more of the
parties selected by the Executive, the Company shall provide the Executive with
the names of such legal counsel, certified public accountants and/or executive
compensation consultants as the Company may select; provided, further, however,
that if the Executive does not accept the party or parties selected by the
Company, the legal counsel, certified public accountants and/or executive
compensation consultants selected by the Executive and the Company,
respectively, shall select the legal counsel, certified public accountants
and/or executive compensation consultants, whichever is applicable, who shall
provide the opinions required by this Section 13(d).  The opinions required hereunder shall set
forth (a) the amount of the Base Period Income of the Executive, (b) the
present value of Total Payments and (c) the amount and present value of any
excess parachute payments.  In the event
that such opinions determine that there would be an excess parachute payment,
the Termination Payment or any other payment determined by such counsel to be
includable in Total Payments shall be reduced or eliminated as specified by the
Executive in writing delivered to the Company within thirty (30) days of his or
her receipt of such opinions or, if the Executive fails to so notify the
Company, then as the Company shall reasonably determine, so that under the
bases of calculation set forth in such opinions there will be no excess
parachute payment.  The provisions of
this Section 13(d), including the


 


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calculations, notices and
opinions provided for herein shall be based upon the conclusive presumption
that the compensation and other benefits, including but not limited to the
Gross Income, earned on or after the date of a Change of Control by the
Executive pursuant to the Company’s compensation programs if such payments
would have been made in the future in any event, even though the timing of such
payment is triggered by the Change of Control, are reasonable compensation for
services rendered prior to the Change of Control; provided, however, that in
the event legal counsel so requests in connection with the opinion required by
this Section 13(d), a firm of recognized executive compensation
consultants, selected by the Executive and the Company pursuant to the procedures
set forth above, shall provide an opinion, upon which such legal counsel may
rely, as to the reasonableness of any item of compensation as reasonable
compensation for services rendered prior to the Change of Control by the
Executive.  In the event that the
provisions of Sections 280G and 4999 of the Code are repealed without
succession, this Section 13(d) shall be of no further force or effect.


 


(e)                                  The
Termination Payment shall be paid to the Executive as follows:


 


(i)                                     In
the event the Executive’s Termination Date is during a Change of Control
Period, any Termination Payment shall be paid in a lump sum not later than ten
(10) days following the Executive’s Termination Date.  Such lump sum payment shall not be reduced by
any present value, interest rate, or similar factor.  Further, the Executive shall not be required
to mitigate the amount of such payment by securing other employment or
otherwise and such payment shall not be reduced by reason of the Executive
securing other employment or for any other reason.


 


(ii)                                  In
the event the Executive’s Termination Date is prior to or after a Change of
Control Period, any Termination Payment shall be paid to the Executive in equal
installments on the Company’s twenty-six (26) regular bi-weekly paydays over
the twelve-month period following the Termination Date.  Such payments shall not be reduced or
increased by any present value, interest rate, or similar factor.  Further, the Executive shall not be required
to mitigate the amount of such payment by securing other employment or
otherwise and such payment shall not be reduced by reason of the Executive
securing other employment or for any other reason.                                     


 


(f)                                    Notwithstanding
anything to the contrary herein, in no event will a termination of the
Executive’s employment with the Company be deemed to trigger a right to receive
a Termination Payment if the termination is effected by the mutual written agreement
of the Company and the Executive to accommodate a reassignment of the Executive
to an entity created or acquired by the Company, or to which the Company has
contributed rights to technology, assets or business plans, if at the time of
such termination the Company owns or is acquiring a minimum of a 19% equity
interest in such entity.  In the event of
any such termination, the Executive shall only be entitled to receive the
Executive’s Accrued Benefits as of the Termination Date.


 


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14.                                 TERMINATION
NOTICE AND PROCEDURE.


 


Any termination by the Company or the Executive of the Executive’s
employment during the employment period shall be communicated by written Notice
of Termination (“Notice of Termination”) to the Executive, if such Notice of
Termination is delivered by the Company, and to the Company, if such Notice of
Termination is delivered by the Executive, all in accordance with the following
procedures:


 


(a)                                  The
Notice of Termination shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and circumstances
alleged to provide a basis for termination;


 


(b)                                 Any
Notice of Termination by the Company shall be approved by a resolution duly
adopted by a majority of the Board, or a majority of the Board may delegate
such authority to approve any Notice of Termination to the Chief Executive
Officer of the Company;


 


(c)                                  If
the Executive shall in good faith furnish a Notice of Termination for Good
Reason or for Good Reason During a Change of Control and the Company notifies
the Executive that a dispute exists concerning the existence of Good Reason or Good
Reason During a Change of Control, within the fifteen (15) day period following
the Company’s receipt of such notice, the Executive shall continue the
Executive’s employment during such dispute. 
If it is thereafter agreed by the parties to this Agreement or
determined by arbitration that (i) Good Reason or Good Reason During a Change
of Control did exist, the Executive’s Termination Date shall be the earlier of
(A) the date on which the dispute is finally determined, either by mutual
written agreement of the parties or pursuant to Section 16, (B) the date
of the Executive’s death or (C) one day prior to the second (2nd) anniversary
of a Change of Control, if any,  or
(ii) Good Reason or Good Reason During a Change of Control did not exist,
the employment of the Executive shall continue after such determination as if
the Executive had not delivered the Notice of Termination asserting Good Reason
or Good Reason During a Change of Control; and


 


(d)                                 If
the Executive gives Notice of Termination of his or her employment for Good
Reason or Good Reason During a Change of Control and a dispute arises as to the
existence of Good Reason or Good Reason During a Change of Control, and the
Executive does not continue his employment during such dispute, and it is
finally determined that the reason for termination set forth in such Notice of
Termination did not exist, if such notice was delivered by the Executive, the
Executive shall be deemed to have voluntarily terminated the Executive’s
employment other than for Good Reason or Good Reason During a Change of
Control.


 


15.                                 NON-COMPETE.


 


The Executive hereby agrees that during the term of this Agreement and
for the period of one (1) year from the
termination hereof, that the Executive will not:


 


(a)                                  Own,
manage, operate or control any business within the United States of the type
and character engaged in and competitive with the Company or any subsidiary


 


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thereof.  For purposes of this Section 15,
ownership of securities of not in excess of five percent (5%) of any class of
securities of a public company shall not be considered to be competition with
the Company or any subsidiary thereof; or


 


(b)                                 Act
as, or become employed as, an officer, director, employee, consultant or agent
of any business within the United States of the type and character engaged in
and competitive with the Company or any of its subsidiaries; or


 


(c)                                  Solicit
any similar business to that of the Company’s for, or sell any products that
are in competition with the Company’s products to, any company in the United
States, which is, as of the date hereof or through the Termination Date, a
customer or client of the Company or any of its subsidiaries, or was such a customer
or client thereof within two years prior to the Termination Date; or


 


(d)                                 Solicit
the employment of (i) any employee of the Company or its subsidiaries that is
an employee at anytime during this term of this Agreement or during the one
year period following the termination of this Agreement or (ii) any former
employee of the Company or its subsidiaries who was employed by the Company or
its subsidiaries during the one (1) year period preceding the Termination Date.


 


For purposes of this Section 15, any business in
the design, production, sale or support of 3D visualization simulation hardware
or software systems shall be deemed to be competitive with the Company.


 


16.                                 REMEDIES
AND JURISDICTION.


 


(a)                                  The
Executive hereby acknowledges and agrees that a breach of the agreements
contained in this Agreement will cause irreparable harm and damage to the
Company, that the remedy at law for the breach or threatened breach of the
agreements set forth in this Agreement will be inadequate, and that, in addition
to all other remedies available to the Company for such breach or threatened
breach (including, without limitation, the right to recover damages), the
Company shall be entitled to injunctive relief for any breach or threatened
breach of the agreements contained in this Agreement.  To enforce the provisions of this Section 16(a),
the Company may seek relief from any court with proper jurisdiction and the
provisions of Section 16(b) through (d) shall not be applicable for
purposes of this Section 16(a).


 


(b)                                 All
claims, disputes and other matters in question between the parties arising
under this Agreement, shall, unless otherwise provided herein, be decided by
binding arbitration before a single independent arbitrator selected pursuant to
Section 16(d).  TO THE EXTENT
ALLOWABLE UNDER APPLICABLE LAW, ALL DISPUTES INVOLVING ALLEGED UNLAWFUL
EMPLOYMENT DISCRIMINATION, BREACH OF CONTRACT OR POLICY, OR EMPLOYMENT TORT
COMMITTED BY THE COMPANY OR A REPRESENTATIVE OF THE COMPANY, INCLUDING CLAIMS
OF VIOLATIONS OF FEDERAL OR STATE DISCRIMINATION STATUTES OR PUBLIC POLICY,
SHALL BE RESOLVED PURSUANT TO THIS POLICY AND THERE SHALL BE NO RECOURSE TO


 


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COURT, WITH OR WITHOUT A
JURY TRIAL.  The arbitration hearing
shall occur at a time and place convenient to the parties in Salt Lake County,
Utah, within thirty (30) days of selection or appointment of the
arbitrator.  The arbitration shall be
governed by the National Rules for the Resolution of Employment Disputes of AAA
in effect on the date of the first notice of demand for arbitration.  The arbitrator shall issue written findings
of fact and conclusions of law, and an award, within fifteen (15) days of the
date of the hearing unless the parties otherwise agree.


 


(c)                                  In
cases of breach of contract or policy, damages shall be limited to contract
damages.  In cases of discrimination
claims prohibited by statute, the arbitrator may direct payment consistent with
the applicable statute.  Issues of
procedure, arbitrability, or confirmation of award shall be governed by the
Federal Arbitration Act, 9 U.S.C. §§ 1-16.


 


(d)                                 The
parties shall select the arbitrator from a panel list made available by the
AAA.  If the parties are unable to agree
to an arbitrator within ten (10) days of receipt of a demand for arbitration,
the arbitrator will be chosen by alternatively striking from a list of five (5)
arbitrators obtained by the Company from AAA. 
The Executive shall have the first strike.


 


17.                                 ATTORNEYS’
FEES.


 


In the event that either party hereunder institutes any legal or
arbitration proceedings in connection with its rights or obligations under this
Agreement, each party in such proceeding shall be responsible for all of its
own costs incurred in connection with such proceeding, including attorneys’
fees and any other fees, expenses, or costs.


 


18.                                 SUCCESSORS.


 


This Agreement and all rights of the Executive shall inure to the
benefit of and be enforceable by the Executive’s personal or legal
representatives, estates, executors, administrators, heirs and
beneficiaries.  In the event of the
Executive’s death, all amounts payable to the Executive under this Agreement
shall be paid to the Executive’s surviving spouse, or
the Executive’s estate if the Executive dies without a surviving spouse.  This Agreement shall inure to the benefit of,
be binding upon and be enforceable by, any successor, surviving or resulting
corporation or other entity to which all or substantially all of the business
and assets of the Company shall be transferred whether by merger,
consolidation, transfer or sale.


 


19.                                 ENFORCEMENT.


 


The provisions of this Agreement shall be regarded as divisible, and if
any of said provisions or any part hereof are declared invalid or unenforceable
by a court of competent jurisdiction, the validity and enforceability of the
remainder of such provisions or parts hereof and the applicability thereof
shall not be affected thereby.


 


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20.                                 AMENDMENT
OR TERMINATION.


 


This Agreement may not be amended or terminated during its term, except
by written instrument executed by the Company and the Executive.


 


21.                                 SURVIVABILITY.


 


The provisions of Sections 15, 16, 17, 18 and 19 and the Company’s
obligation to pay Executive monies or benefits due hereunder shall survive
termination of this Agreement.


 


22.                                 ENTIRE
AGREEMENT.


 


Except for the Confidentiality, Proprietary Information, and Inventions
Agreement between the Executive and the Company, this Agreement sets forth the
entire agreement between the Executive and the Company with respect to the terms
of the Executive’s employment with the Company. 
This Agreement supersedes all prior oral or written agreements,
negotiations, commitments and understandings with respect thereto, and in the
event of conflict between the terms of this Agreement and any other agreement,
the terms of this Agreement govern.  Prior Employment Agreements
between the Executive and the Company are hereby terminated in their entirety
and superceded by this Agreement.


 


23.                                 GOVERNING
LAW.


 


This Agreement and the Executive’s and Company’s respective rights and
obligations hereunder shall be governed by and construed in accordance with the
laws of the State of Utah without giving effect to the provisions, principles,
or policies thereof relating to choice or conflicts of laws.


 


24.                                 NOTICE.


 


All notices,
requests, instructions or other documents to be given under this Agreement
shall be in writing and shall be deemed given (i) three business days following
sending by registered or certified mail, postage prepaid, (ii) when delivered,
if delivered personally to the intended recipient and (iv) one business day
following sending by overnight delivery via a national courier service, and in
each case, addressed to a party at the following address for such party:


 


	
  Company:

  	
   

  	
  Evans & Sutherland
  Computer Corporation

  
	
   

  	
   

  	
  600 Komas Drive

  
	
   

  	
   

  	
  Salt Lake City, Utah
  84108

  
	
   

  	
   

  	
  Attn: Vice President of
  Human Resources

  
	
   

  	
   

  	
  Fax: (801) 588-4517

  
	
   

  	
   

  	
  Tel: (801) 588-1609

  



 


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  Executive:

  	
   

  	
  Kevin A. Paprzycki

  
	
   

  	
   

  	
  6413 W. Ketchum Drive

  
	
   

  	
   

  	
  West Valley City, Utah
  84128

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tel: (801) 508-1589

  



 


or
to such other address as the Company shall have given to the Executive or the
Executive shall have given to the Company in writing in the manner set forth
above.


 


25.                                 NO
WAIVER.


 


No waiver by either party at any time of any breach by the other party
of, or compliance with, any condition or provision of this Agreement to be
performed by the other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same time or any prior or subsequent time.


 


26.                                 HEADINGS.


 


The headings herein contained are for reference only and shall not
affect the meaning or interpretation of any provision of this Agreement.


 


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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and the Executive has executed this
Agreement, on the date and year first above written.


 


	
   

  	
   

  	
  “COMPANY”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EVANS & SUTHERLAND
  COMPUTER

  CORPORATION, a Utah
  Corporation

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ James R. Oyler

  	
   

  
	
   

  	
   

  	
   

  	
  James R. Oyler

  
	
   

  	
   

  	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “EXECUTIVE”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Kevin A. Paprzycki

  	
   

  
	
   

  	
   

  	
   

  	
  Kevin A. Paprzycki

  
							



 


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