**Exhibit10.13**

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**EMPLOYMENT AGREEMENT**

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

 

W I T N E S S E T H:

 

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

 

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

 

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

 

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

 

NOW, THEREFORE, in consideration of the foregoing and of the mutualcovenants and agreements hereinafter set forth, the Company and the Executivehereto mutually covenant and agree as follows:

 

1.**                                      **DEFINITIONS.

 

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

 

(a)                                  “AccruedBenefits” shall mean the amount equal to the sum of the following to theextent not previously paid:

 

(i)                                     All salary earnedor accrued through the Termination Date;

 

(ii)                                  Reimbursementpursuant to Section 6(d) for any and all monies expended by the Executiveand not advanced by Company in connection with the Executive’s employment forreasonable and necessary expenses incurred by the Executive through theTermination Date;

 

(iii)                               Any and all other cashbenefits of deferred compensation plans previously earned through theTermination Date unless deferred at the election of

 

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theExecutive for payment at another time or the applicable deferred compensationplan provides for payment at another time;

 

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

 

(v)                                 Allother payments and benefits to which the Executive may be entitled under theterms of any benefit plan of the Company, which as of the Termination Date, isapplicable 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 Regulation12B promulgated under the Act;

 

(d)                                 “BasePeriod Income” shall be an amount equal to the Executive’s “annualizedincludable compensation” for the “base period” as defined in Sections280G(d)(1) and (2) of the Code and the regulations adopted thereunder;

 

(e)                                  “BeneficialOwner” shall have the same meaning as given to that term in Rule 13d-3 ofthe Act, provided that any pledgee of Company voting securities shall not bedeemed to be the Beneficial Owner thereof prior to its disposition of, oracquisition 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 bythe Executive in fraudulent conduct, as evidenced by a determination in abinding and final judgment, order or decree of a court or administrative agencyof competent jurisdiction, in effect after exhaustion or lapse of all rights ofappeal, in an action, suit or proceeding, whether civil, criminal,administrative or investigative, which the Chief Executive Officer of theCompany determines, in his sole discretion, has a significant adverse impact onthe Company or on the performance of the Executive’s duties to the Company;

 

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

 

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

 

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(iv)                              A significantviolation by the Executive of the Company’s established policies andprocedures;

 

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

 

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

 

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

 

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

 

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

 

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

 

(v)                                 During any period oftwo (2) consecutive years, individuals who, at the beginning of such period,constituted the Board of Directors of the Company cease, for any reason, toconstitute at least a majority thereof, unless the election or nomination forelection 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 beginningof the period;

 

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

 

(vii)                           The filing of a proceedingunder Chapter 11 of the Federal Bankruptcy Code (or any successor or otherstatute of similar import) for reorganization with respect to the Company if inconnection with any such proceeding, this Agreement is rejected, or a plan ofreorganization is approved an element of which plan entails the liquidation ofall 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 foregoingcircumstances shall occur; provided, however, that in connection with a “Changeof Control” specified in Section 1(h)(vii), a “Changeof Control” shall be deemed to occur on the date of the filing of the relevantproceeding under Chapter 7 or Chapter 11 of the Federal Bankruptcy Code (or anysuccessor or other statute of similar import). Notwithstanding the foregoing, a “Change of Control” shall not includeany transaction that constitutes a “Rule 13e-3 transaction” under Rule 13e-3 ofthe Act or an “issuer tender offer” under Rule 13e-4 of the Act.

 

(i)                                     “Changeof Control Period” shall mean the period commencing 180 days immediatelyprior 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 toperform on a full-time basis the customary duties of the Executive under thisAgreement;

 

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

 

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

 

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

 

(ii)                                  Breach or violationof any material provision of this Agreement by the Company, which is notremedied within five business days following notice to the Company by theExecutive.

 

(n)                                 “GoodReason During a Change of Control” shall mean anyof the following events occurring during a Change of Control Period:

 

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

 

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

 

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

 

(iv)                              Breach orviolation of any material provision of this Agreement by the Company, which isnot remedied within five business days following notice to the Company by theExecutive;

 

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

 

(p)                                 “Noticeof 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 Companyor an entity organized, appointed or established pursuant to the terms of anysuch benefit plan;

 

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

 

(i)                                     The Executive’sdate of death;

 

(ii)                                  Thirty (30) daysafter the delivery of the Notice of Termination terminating the Executive’semployment on account of Disability pursuant to Section 9 herein, unlessthe Executive returns on a full-time basis to the performance of his or herduties 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’semployment is terminated by the Executive voluntarily;

 

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

 

(v)                                 Thedate the Executive is terminated for Cause.

 

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

 

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

 

2.**                                      **EMPLOYMENT.

 

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

 

3.**                                      **TERM.

 

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

 

4.**                                      **POSITIONSAND DUTIES.

 

The Executive shall serve as Chief Financial Officer and Secretary ofthe Company and in such additional capacities as set forth in Section 7herein.  In connection with the foregoingpositions, the Executive shall have such duties, responsibilities and authorityas may from time to time be assigned to the Executive by the Chief ExecutiveOfficer.  The Executive shall devotesubstantially all the Executive’s working time and efforts to the business andaffairs of the Company.  The ChiefExecutive Officer, in his or her sole discretion, may alter, modify, or changethe Executive’s duties, offices, positions, responsibilities and obligationsset forth in this Agreement at any time, consistent with the status of a seniorexecutive of the Company.

 

5.**                                      **PLACEOF PERFORMANCE.

 

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

 

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6.**                                      **COMPENSATIONAND RELATED MATTERS.

 

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

 

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

 

(c)                                  ExecutiveSavings Plan.  Subject to the Company’sright to terminate or amend, at any time with or without notice to theExecutive, the Company’s Executive Savings Plan, the Executive shall beentitled to participate in the Executive Savings Plan according to the termsand conditions of the Executive Savings Plan.

 

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

 

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

 

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

 

(g)                                 ServicesFurnished.  The Company shall furnishthe Executive with office space, and such other facilities and services asshall be suitable to the Executive’s position and adequate for the performanceof 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, ifelected 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 ofdirectors of any subsidiary or affiliate of the Company; provided, however,that the Executive is indemnified for serving in any and all such capacities ona basis no less favorable than is currently provided in the Company’s bylaws,or otherwise.

 

8.                                       TERMINATIONAS A RESULT OF DEATH.

 

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

 

9.**                                      **TERMINATIONFOR DISABILITY.

 

If, as a result of the Executive’s Disability, the Executive shall havebeen unable to perform the Executive’s duties hereunder on a full-time basisfor four (4) consecutive months and within thirty (30) days after the Companyprovides the Executive with a Termination Notice, the Executive shall not havereturned to the performance of the Executive’s duties on a full-time basis, theCompany may terminate the Executive’s employment, subject to Section 14herein.  During the term of the Executive’sDisability prior to termination, the Executive shall continue to receive allsalary and other benefits payable under Section 6 herein, includingparticipation in all employee benefit plans, programs and arrangements in whichthe Executive was entitled to participate immediately prior to the Disability; provided,however, that the Executive’s continued participation is permitted under theterms and provisions of such plans, programs and arrangements.  In the event that the Executive’sparticipation in any such plan, program or arrangement is barred as the resultof such Disability, the Executive shall be entitled to receive an amount equalto the contributions, payments, credits or allocations which would have beenpaid by the Company to the Executive, to the Executive’s account or on theExecutive’s behalf under such plans, programs and arrangements.  In the event the Executive’s employment isterminated 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 TerminationDate and shall remain eligible for all benefits provided by any long-termdisability programs of the Company in effect at the time of such termination.  The Executive shall also be entitled to theTermination Payment described in Section 13(a).

 

10.**                                **TERMINATIONFOR CAUSE.

 

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

 

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11.**                                **OTHERTERMINATION BY COMPANY.

 

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

 

12.**                                **VOLUNTARYTERMINATION BY EXECUTIVE.

 

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

 

13.**                                **TERMINATIONPAYMENT.

 

(a)                                  Ifthe 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 theExecutive’s Gross Income.  The Companywill also pay the full medical, dental, and vision premiums for continuationcoverage under COBRA for the Executive and dependents who qualify forcontinuation coverage under COBRA for one year following the Termination Date.

 

(b)                                 If,prior to a Change of Control Period, the Executive’s employment is terminatedby the Executive for Good Reason or by the Company other than by reason ofdeath, Disability or Cause, the Termination Payment payable to the Executive bythe Company or an affiliate of the Company shall be one (1.0) times theExecutive’s Gross Income.  The Companywill pay the full medical, dental, and vision premiums for continuationcoverage under COBRA for the Executive and dependents who qualify for continuationcoverage 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 bythe Executive for Good Reason During a Change of Control or by the Company forany reason other than death, Disability, or Cause, the Termination Paymentpayable to the Executive by the Company or an affiliate of the Company shall beone (1.0) times the Executive’s Gross Income. The Company will pay the full medical, dental and vision premiums forcontinuation coverage under COBRA for the Executive and dependents who qualifyfor continuation coverage under COBRA for one (1) year following theTermination Date.

 

(d)                                 Itis the intention of the Company and the Executive that the benefits under thisAgreement shall be capped such that no portion of the Termination Payment andany other “payments in the nature of compensation” (as defined in Section 280Gof the Code and the regulations adopted thereunder) to or for the benefit ofthe Executive under this Agreement, or under any other agreement, plan orarrangement, shall be deemed to be an “excess parachute payment” as defined in Section 280Gof the Code.  It is agreed that thepresent value of the Total Payments shall not exceed an amount equal to two andninety-nine hundredths (2.99) times the Executive’s Base Period Income, whichis the maximum amount which the Executive may receive without becoming subjectto the tax imposed by Section 4999 of the Code or which the Company maypay without loss of deduction under Section 280G(a)of the Code.  Present value for purposesof this Agreement shall be calculated in accordance with the regulations issuedunder Section 280G of the Code. Within sixty (60) days following delivery of the Notice of Terminationor notice by the Company to the Executive of its belief that there is a paymentor benefit due the Executive which will result in an excess parachute paymentas defined in Section 280G of the Code, the Executive and the Companyshall, at the Company’s expense, obtain such opinions as more fully describedhereafter, which need not be unqualified, of legal counsel and certified publicaccountants or a firm of recognized executive compensation consultants.  The Executive shall select said legalcounsel, certified public accountants and executive compensation consultants;provided, however, that if the Company does not accept one (1) or more of theparties selected by the Executive, the Company shall provide the Executive withthe names of such legal counsel, certified public accountants and/or executivecompensation consultants as the Company may select; provided, further, however,that if the Executive does not accept the party or parties selected by theCompany, the legal counsel, certified public accountants and/or executivecompensation consultants selected by the Executive and the Company,respectively, shall select the legal counsel, certified public accountantsand/or executive compensation consultants, whichever is applicable, who shallprovide the opinions required by this Section 13(d).  The opinions required hereunder shall setforth (a) the amount of the Base Period Income of the Executive, (b) thepresent value of Total Payments and (c) the amount and present value of anyexcess parachute payments.  In the eventthat such opinions determine that there would be an excess parachute payment,the Termination Payment or any other payment determined by such counsel to beincludable in Total Payments shall be reduced or eliminated as specified by theExecutive in writing delivered to the Company within thirty (30) days of his orher receipt of such opinions or, if the Executive fails to so notify theCompany, then as the Company shall reasonably determine, so that under thebases of calculation set forth in such opinions there will be no excessparachute payment.  The provisions ofthis Section 13(d), including the

 

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calculations, notices andopinions provided for herein shall be based upon the conclusive presumptionthat the compensation and other benefits, including but not limited to theGross Income, earned on or after the date of a Change of Control by theExecutive pursuant to the Company’s compensation programs if such paymentswould have been made in the future in any event, even though the timing of suchpayment is triggered by the Change of Control, are reasonable compensation forservices rendered prior to the Change of Control; provided, however, that inthe event legal counsel so requests in connection with the opinion required bythis Section 13(d), a firm of recognized executive compensationconsultants, selected by the Executive and the Company pursuant to the proceduresset forth above, shall provide an opinion, upon which such legal counsel mayrely, as to the reasonableness of any item of compensation as reasonablecompensation for services rendered prior to the Change of Control by theExecutive.  In the event that theprovisions of Sections 280G and 4999 of the Code are repealed withoutsuccession, this Section 13(d) shall be of no further force or effect.

 

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

 

(i)                                     Inthe event the Executive’s Termination Date is during a Change of ControlPeriod, 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 byany present value, interest rate, or similar factor.  Further, the Executive shall not be requiredto mitigate the amount of such payment by securing other employment orotherwise and such payment shall not be reduced by reason of the Executivesecuring other employment or for any other reason.

 

(ii)                                  Inthe event the Executive’s Termination Date is prior to or after a Change ofControl Period, any Termination Payment shall be paid to the Executive in equalinstallments on the Company’s twenty-six (26) regular bi-weekly paydays overthe twelve-month period following the Termination Date.  Such payments shall not be reduced orincreased by any present value, interest rate, or similar factor.  Further, the Executive shall not be requiredto mitigate the amount of such payment by securing other employment orotherwise and such payment shall not be reduced by reason of the Executivesecuring other employment or for any other reason.                                     

 

(f)                                    Notwithstandinganything to the contrary herein, in no event will a termination of theExecutive’s employment with the Company be deemed to trigger a right to receivea Termination Payment if the termination is effected by the mutual written agreementof the Company and the Executive to accommodate a reassignment of the Executiveto an entity created or acquired by the Company, or to which the Company hascontributed rights to technology, assets or business plans, if at the time ofsuch termination the Company owns or is acquiring a minimum of a 19% equityinterest in such entity.  In the event ofany such termination, the Executive shall only be entitled to receive theExecutive’s Accrued Benefits as of the Termination Date.

 

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14.**                                **TERMINATIONNOTICE AND PROCEDURE.

 

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

 

(a)                                  TheNotice of Termination shall indicate the specific termination provision in thisAgreement relied upon and shall set forth in reasonable detail the facts and circumstancesalleged to provide a basis for termination;

 

(b)                                 AnyNotice of Termination by the Company shall be approved by a resolution dulyadopted by a majority of the Board, or a majority of the Board may delegatesuch authority to approve any Notice of Termination to the Chief ExecutiveOfficer of the Company;

 

(c)                                  Ifthe Executive shall in good faith furnish a Notice of Termination for GoodReason or for Good Reason During a Change of Control and the Company notifiesthe Executive that a dispute exists concerning the existence of Good Reason or GoodReason During a Change of Control, within the fifteen (15) day period followingthe Company’s receipt of such notice, the Executive shall continue theExecutive’s employment during such dispute. If it is thereafter agreed by the parties to this Agreement ordetermined by arbitration that (i) Good Reason or Good Reason During a Changeof 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 mutualwritten agreement of the parties or pursuant to Section 16, (B) the dateof the Executive’s death or (C) one day prior to the second (2nd) anniversaryof 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 ifthe Executive had not delivered the Notice of Termination asserting Good Reasonor Good Reason During a Change of Control; and

 

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

 

15.**                                **NON-COMPETE.

 

The Executive hereby agrees that during the term of this Agreement andfor the period of one (1) year****from thetermination hereof, that the Executive will not:

 

(a)                                  Own,manage, operate or control any business within the United States of the typeand 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 ofsecurities of a public company shall not be considered to be competition withthe Company or any subsidiary thereof; or

 

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

 

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

 

(d)                                 Solicitthe employment of (i) any employee of the Company or its subsidiaries that isan employee at anytime during this term of this Agreement or during the oneyear period following the termination of this Agreement or (ii) any formeremployee of the Company or its subsidiaries who was employed by the Company orits subsidiaries during the one (1) year period preceding the Termination Date.

 

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

 

16.**                                **REMEDIESAND JURISDICTION.

 

(a)                                  TheExecutive hereby acknowledges and agrees that a breach of the agreementscontained in this Agreement will cause irreparable harm and damage to theCompany, that the remedy at law for the breach or threatened breach of theagreements set forth in this Agreement will be inadequate, and that, in additionto all other remedies available to the Company for such breach or threatenedbreach (including, without limitation, the right to recover damages), theCompany shall be entitled to injunctive relief for any breach or threatenedbreach 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 theprovisions of Section 16(b) through (d) shall not be applicable forpurposes of this Section 16(a).

 

(b)                                 Allclaims, disputes and other matters in question between the parties arisingunder this Agreement, shall, unless otherwise provided herein, be decided bybinding arbitration before a single independent arbitrator selected pursuant toSection 16(d).  TO THE EXTENTALLOWABLE UNDER APPLICABLE LAW, ALL DISPUTES INVOLVING ALLEGED UNLAWFULEMPLOYMENT DISCRIMINATION, BREACH OF CONTRACT OR POLICY, OR EMPLOYMENT TORTCOMMITTED BY THE COMPANY OR A REPRESENTATIVE OF THE COMPANY, INCLUDING CLAIMSOF 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 AJURY TRIAL.  The arbitration hearingshall occur at a time and place convenient to the parties in Salt Lake County,Utah, within thirty (30) days of selection or appointment of thearbitrator.  The arbitration shall begoverned by the National Rules for the Resolution of Employment Disputes of AAAin effect on the date of the first notice of demand for arbitration.  The arbitrator shall issue written findingsof fact and conclusions of law, and an award, within fifteen (15) days of thedate of the hearing unless the parties otherwise agree.

 

(c)                                  Incases of breach of contract or policy, damages shall be limited to contractdamages.  In cases of discriminationclaims prohibited by statute, the arbitrator may direct payment consistent withthe applicable statute.  Issues ofprocedure, arbitrability, or confirmation of award shall be governed by theFederal Arbitration Act, 9 U.S.C. §§ 1-16.

 

(d)                                 Theparties shall select the arbitrator from a panel list made available by theAAA.  If the parties are unable to agreeto 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 orarbitration proceedings in connection with its rights or obligations under thisAgreement, each party in such proceeding shall be responsible for all of itsown 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 thebenefit of and be enforceable by the Executive’s personal or legalrepresentatives, estates, executors, administrators, heirs andbeneficiaries.  In the event of theExecutive’s death, all amounts payable to the Executive under this Agreementshall be paid to the Executive’s surviving spouse, orthe 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 resultingcorporation or other entity to which all or substantially all of the businessand 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 ifany of said provisions or any part hereof are declared invalid or unenforceableby a court of competent jurisdiction, the validity and enforceability of theremainder of such provisions or parts hereof and the applicability thereofshall not be affected thereby.

 

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20.**                                **AMENDMENTOR TERMINATION.

 

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

 

21.**                                **SURVIVABILITY.

 

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

 

22.**                                **ENTIREAGREEMENT.

 

Except for the Confidentiality, Proprietary Information, and InventionsAgreement between the Executive and the Company, this Agreement sets forth theentire agreement between the Executive and the Company with respect to the termsof 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 theevent of conflict between the terms of this Agreement and any other agreement,the terms of this Agreement govern.** **Prior Employment Agreementsbetween the Executive and the Company are hereby terminated in their entiretyand superceded by this Agreement.

 

23.**                                **GOVERNINGLAW.

 

This Agreement and the Executive’s and Company’s respective rights andobligations hereunder shall be governed by and construed in accordance with thelaws 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 Agreementshall be in writing and shall be deemed given (i) three business days followingsending by registered or certified mail, postage prepaid, (ii) when delivered,if delivered personally to the intended recipient and (iv) one business dayfollowing sending by overnight delivery via a national courier service, and ineach 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           |

 

orto such other address as the Company shall have given to the Executive or theExecutive shall have given to the Company in writing in the manner set forthabove.

 

25.**                                **NOWAIVER.

 

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

 

26.**                                **HEADINGS.

 

The headings herein contained are for reference only and shall notaffect the meaning or interpretation of any provision of this Agreement.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to beexecuted by its duly authorized officer, and the Executive has executed thisAgreement, 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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