Document:

Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of
the 8 day of February, 2006, by and between EVANS & SUTHERLAND COMPUTER
CORPORATION, a Utah corporation (the “Company”) and Paul Dailey (the “Executive”).

 

W I T N E S S E T H:

 

WHEREAS, the
Executive is employed as an executive of Spitz, Inc. (“Spitz”);

 

WHEREAS, the
Company intends to acquire Spitz;

 

WHEREAS, the
Executive desires to provide services to the Company in an executive capacity;

 

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 has 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 the 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)                                 “Business
Disposition” shall mean the sale, transfer, liquidation or other
disposition of all or substantially all of the assets of the digital theater,
planetarium and related businesses of the Company to a Person or Persons; or
the sale, transfer, or other disposition by the Company of Spitz stock to a
Person or Persons; excluding the subsuming of Spitz into the Company;

 

(h)                                 “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

 

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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

 

(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.

 

(i)                                     “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

 

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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;

 

(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;

 

(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.

 

(j)                                     “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;

 

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

 

(l)                                     “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;

 

(m)                               “Effective
Date” shall mean the date that the Company acquires control of Spitz; but
not later than August 1, 2006 unless a later date is mutually agreed upon by
the Company and the Executive;

 

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

 

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

 

(i)                                     The
change of the Executive’s assigned employment location without the Executive’s
consent where the lesser of (A) the distance from the Executive’s residence at
the time of the change to the new work location; or (B)

 

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the distance from the Executive’s residence on the day preceding the
date of this Agreement to the new work location, is greater than fifty (50)
miles;

 

(ii)                                  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 date of a Business Disposition, 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 date of a
Business Disposition, and that which is necessary to perform any duties
assigned to the Executive during the 180-day period immediately preceding the
date of a Business Disposition; or

 

(iii)                               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.

 

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

 

(i)                                     The
change of the Executive’s assigned employment location without the Executive’s
consent where the lesser of (A) the distance from the Executive’s residence at
the time of the change to the new work location; or (B) the distance from the
Executive’s residence on the day preceding the date of this Agreement to the
new work location, is greater than fifty (50) miles;

 

(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

 

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(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;

 

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

 

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

 

(s)                                  “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;

 

(t)                                    “Prior
Employment Agreement” shall mean the employment agreement between Spitz and
the Executive dated September 1, 2002.

 

(u)                                 “Stay
Agreement” shall mean the agreement between Spitz and the Executive dated
December 20, 2004.

 

(v)                                 “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;

 

(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.

 

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

 

(x)                                   “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.

 

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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.

 

(a)                                  On
the Effective Date, the Prior Agreement shall be terminated and the Executive,
Transnational, Inc., Spitz, and the Company shall have no further obligations
under the Prior Agreement.

 

(b)                                 The
Company acknowledges the Stay Agreement and agrees to satisfy Spitz’
obligations under the Stay Agreement to the extent that Spitz fails to do so.

 

3.                                       TERM.

 

This Agreement
shall commence on the Effective Date. This Agreement shall 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 an executive 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 office of the Company in Chadds Ford, Pennsylvania except for required
travel on Company business.

 

6.                                       COMPENSATION
AND RELATED MATTERS.

 

(a)                                  Salary.
The Company shall pay to the Executive an annualized base salary at a rate of
$131,310 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;

 

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(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 (MIP), the Executive shall be entitled to participate in the
Evans & Sutherland 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 professional association, license fee and professional education
expenses related to the Executive’s position and duties and 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;

 

(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.

 

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 and
that the Executive is covered by a directors’ and officers’ liability insurance
or other policy applicable to the election or appointment.

 

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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.

 

11.                                 OTHER TERMINATION
BY COMPANY.

 

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

 

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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 commencement of this Agreement, as provided under Section 3, 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 reimburse the Executive for 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 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 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 equal to one (1.0) times
the Executive’s Gross Income. The Company will reimburse the Executive for 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.

 

(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 reimburse the
Executive for the full medical, dental and vision premiums for continuation
coverage under

 

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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 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

 

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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 payable as follows:

 

(i)                                     In
the event the Executive’s Termination Date is during a Change of Control
Period, any Termination Payment shall be paid to the Executive 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 regular 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 agreement of
the Company and the Executive to accommodate a reassignment of the Executive to
an entity created or acquired by the Company or Spitz, or to which the Company
or Spitz has contributed rights to technology, assets or business plans, if at
the time of such termination the Company or Spitz 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 determined 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.

 

13

 

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, for any reason, the Executive will not:

 

(a)                                  Own,
manage, operate or control any business of the type and character engaged in
and competitive with the digital theater, planetarium, and related businesses
of the Company or any subsidiary 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 of the type and character engaged in and competitive with the
digital theater, planetarium, and related businesses of the Company or any of
its subsidiaries; or

 

(c)                                  Solicit
any similar business to that of the digital theater, planetarium, and related
businesses of the Company’s for, or sell any products that are in competition
with the Company’s digital theater, planetarium, and related business products
to, any company 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.

 

(e)                                  Notwithstanding
the foregoing provisions of Section 15, the Executive shall have no obligations
under this Section 15, and the Company covenants not to initiate litigation or
any other dispute resolution mechanism involving this Section 15 if the Company
fails to satisfy, in any respect, any of its obligations under Section 13. This
Section 15(e) does not apply if there is there is no obligation for a
Termination Payment.

 

16.                                 REMEDIES AND
JURISDICTION.

 

(a)                                  The
Executive hereby acknowledges and agrees in addition to all other remedies
available to the Company for a breach of this Agreement (including, without
limitation, the right to recover damages), the Company shall be entitled to
seek injunctive relief. To enforce the provisions of this Section 16(a), the
Company may seek relief from any court with proper jurisdiction.

 

(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

 

14

 

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 AGREEMENT AND THERE SHALL BE NO RECOURSE TO COURT, WITH OR WITHOUT A JURY
TRIAL. The arbitration hearing shall occur at a time and place convenient to
the parties in Philadelphia, Pennsylvania, 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

 

(a)                                  to
which all or substantially all of the business and assets of the Company shall
be transferred whether by merger, consolidation, transfer or sale, or

 

(b)                                 to
which the Company shall transfer ownership under a Business Disposition.

 

15

 

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.

 

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 shall survive termination of this Agreement.

 

22.                                 ENTIRE AGREEMENT.

 

Except for the
Confidentiality 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 subject matter hereof, and supersedes all prior
oral or written agreements, negotiations, commitments and understandings with
respect thereto. Prior employment agreements between the Executive and the Company
are hereby terminated in their entirety and superceded by this Agreement.

 

23.                                 VENUE; 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.

 

16

 

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 sent, if sent by facsimile; provided, however, that the
facsimile is promptly confirmed by telephone confirmation thereof, (iii) 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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Executive:

  	
  Paul Dailey

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fax:
  (      )       -      

  
	
   

  	
   

  	
  Tel: (      )
        -       

  

 

Or to such
other address as the Company shall have given to the Executive or, if to the
Executive, to such address as the Executive shall have given to the Company or
facsimile number as the party to whom notice is given may have previously
furnished to the other 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.

 

27.                                 COUNTERPARTS.

 

This Agreement
may be executed in one or more counterparts, each of which shall be deemed to
be an original but all of which together will constitute one and the same
instrument.

 

17

 

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/
  Paul Dailey

  	
   

  
	
   

  	
  Paul Dailey

  	
   

  

 

18Exhibit 10.3

 

SEPARATION AND RELEASE AGREEMENT

 

This
SEPARATION AND RELEASE AGREEMENT (“Separation Agreement”) is made and entered
into by and between EVANS & SUTHERLAND COMPUTER CORPORATION, a Utah
corporation (the “Company”), and JAMES R. OYLER (“Mr. Oyler”).

 

Recitals

 

WHEREAS, Mr.
Oyler has been serving as President and Chief Executive Officer of the Company
pursuant to an Employment Agreement dated as of May 16, 2000 (“Employment
“Agreement”), as amended by that certain Amendment No. 1 to Employment Agreement
dated as of September 22, 2000 (“Amendment No. 1”) (collectively the “Amended
Employment Agreement”), and as a member of the Company’s Board of Directors
(“Board”); and

 

WHEREAS, Mr.
Oyler has notified the Company of his intention to resign as President and
Chief Executive Officer of the Company and as a member of the Board; and

 

WHEREAS, Mr.
Oyler is willing to accept from the Company the termination payment and other
consideration set forth herein in lieu of any termination payment provided in
the Amended Employment Agreement in exchange for the promises, covenants and
other consideration to be provided by the Company as set forth herein, in
accordance with the terms hereof; and

 

WHEREAS, the
Company is willing to pay Mr. Oyler the termination payment and other
consideration set forth herein in lieu of any termination payment that
otherwise may have been payable to Mr. Oyler as provided in the Amended
Employment Agreement in exchange for Mr. Oyler’s promises, covenants and other
consideration to be provided by Mr. Oyler as set forth herein, in accordance
with the terms hereof;

 

NOW,
THEREFORE, in consideration of the promises, covenants and agreements contained
herein, and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:

 

Agreement

 

1.                                                                                       Resignation as President, CEO and Board Member.
Mr. Oyler has submitted to the Board a written notice of resignation,
whereby he has notified the Company that he is resigning as President and CEO
of the Company and as a member of the Board effective immediately, and any
other similar positions with any subsidiaries of the Company. The Board
accepted Mr. Oyler’s resignation effective June 7, 2006 (“Resignation Date”),
after which Mr. Oyler will no longer function as the President or CEO, or as a
director, of the Company.

 

 

 

Mr. Oyler
shall remain a statutory employee for thirty days after the Resignation Date
(until July 7, 2006), at which time his employment with the Company will
officially end (“Termination Date”).

 

2.                                                                                       Press Release. The Company shall issue
a press release on June 7, 2006, regarding Mr. Oyler’s resignation as President
and Chief Executive Office of the Company and as a member of the Board, in the
form attached hereto as Exhibit A.

 

3.                                                                                       Termination Payment. The Company shall
pay Mr. Oyler a termination payment (“Termination Payment”) in an amount equal
to two (2.0) times Mr. Oyler’s Gross Income (as defined in paragraph 1(n) of
the Amended Employment Agreement), provided, however, that the Company’s
payment of the Termination Payment shall be subject to the provisions of
paragraph 13(e) of the Amended Employment Agreement (relating to Section 280G
of the Internal Revenue Code), provided that for purposes of applying such
paragraph 13(e), the term “Termination Payment” shall have the definition as
set forth in this Separation Agreement. The Termination Payment shall be in
lieu of any termination payment that Mr. Oyler otherwise may have been paid
pursuant to the terms of the Amended Employment Agreement. The Company shall
pay the Termination Payment on January 10, 2007 (the “Termination Payment
Date”). The parties agree that the Termination Payment, calculated in
accordance with the foregoing, shall be One Million Three Hundred Sixty-five
Thousand Seven Hundred Eighty-seven and 86/100 Dollars ($1,365,787.86), plus
interest at the rate of four percent (4%) per annum on such amount, which shall
accrue from July 17, 2006 until paid, on the basis of a 360-day year. The
parties each acknowledge that this Separation Agreement and any payments made
to Mr. Oyler, including without limitation the Termination Payment, are
unrelated to the Rockwell Collins transaction.

 

a.                                                                                                                                       The
term “Gross Income” is defined in paragraph 1(n) of the Amended Employment
Agreement to mean Mr. Oyler’s “current calendar year targeted compensation
(base salary plus cash bonus), plus any other compensation payable to [Mr.
Oyler] by the Company for the same period, whether taxable or non-taxable,”
which includes and is limited to base salary, target bonus equal to 65% of such
base salary, the Company’s matching contributions to the Executive Savings Plan
(“ESP”) and 401(k) Deferred Compensation Plan, based on the contributions by
Mr. Oyler to the ESP and 401(k) plans as of the Termination Date, the Company’s
payment on Mr. Oyler’s behalf of life insurance premiums (excluding, however,
the portion of the life insurance premium payment that is allocated to cash
build-up of the policy), the Company’s payment of long-term disability premiums,
and the Company’s payment of group term life insurance premiums.

 

b.                                                                                                                                      The
parties acknowledge and agree that the phrase “any other compensation payable
to [Mr. Oyler] by the Company for the same period, whether taxable or
non-taxable,” in paragraph 1(n) of the Amended Employment Agreement shall not
include any discretionary contribution made by the Company to the ESP or any
other executive compensation plan maintained by the Company, and therefore the
term “Gross Income” does not

 

 

2

 

 

include any
discretionary contribution to the Company’s ESP for normalization of the
Company’s Supplemental Executive Retirement Plan (“SERP”).

 

4.                                                                                       COBRA Premiums to Be Paid for the Benefit of Mr. Oyler.
The Company shall reimburse Mr. Oyler for payments made by him for the full
medical, dental and vision premiums for continuation coverage under COBRA and,
after expiration of the COBRA continuation period, for conversion coverage for
Mr. Oyler and his dependents who qualify for continuation coverage under COBRA,
until and including July 7, 2008, provided that the Company’s reimbursement
under this paragraph 4 shall include an additional amount of reimbursement for
any additional income tax payable by Mr. Oyler (the “Tax Gross-up”) in respect
of the reimbursement required under this paragraph 4.

 

5.                                                                                       Payment of Base Salary for Thirty Days. Mr.
Oyler shall receive his base salary for the thirty (30) day period ending on
the Termination Date, subject to applicable tax withholdings. Such salary
payments shall be made on the Company’s regular paydays prior to the
Termination Date, provided that all salary payable to Mr. Oyler shall
nevertheless be paid in full as of the Termination Date.

 

6.                                                                                       Payment for Unused Accrued Paid Vacation Leave.
On the Termination Date, the Company shall pay Mr. Oyler for his unused
accrued paid vacation leave in accordance with the Company’s vacation leave
policy.

 

7.                                                                                       Payment for Reimbursable Expenses. On
the Termination Date, the Company shall pay Mr. Oyler for his reimbursable
expenses incurred on behalf of the Company, through June 7, 2006, in accordance
with the Company’s expense reimbursement policy.

 

8.                                                                                       Payment Under Executive Compensation Plans.
The Company shall make all payments due to Mr. Oyler as a result of the
cessation of his employment under or with respect to any executive compensation
or retirement plan or program maintained by the Company in accordance with the
terms thereof, provided, however, that on January 10, 2007, the Company shall
make payments to Mr. Oyler under the ESP which fall under Section 409A of the
Internal Revenue Code (“Section 409A”) to avoid any excise tax thereunder,
provided further that the Company shall make payments to Mr. Oyler under the
ESP which do not fall under Section 409A in accordance with the otherwise
applicable terms of the ESP.

 

9.                                                                                       Transfer of Title to Certain Personal Property.
Mr. Oyler shall, and hereby does, receive from the Company legal title to
the following assets:  (i) one desktop
computer system currently located at Mr. Oyler’s former office at the Company;
(ii) one IBM laptop computer system currently in Mr. Oyler’s possession; (iii)
one cell phone currently in Mr. Oyler’s possession; (iv) the telephone number
currently assigned to that cell phone; (v) a PDA currently in Mr. Oyler’s
possession; and (vi) a framed picture located in Mr. Oyler’s former office at
the Company; provided that in the case of the computer equipment described in
clauses (i) and (ii) above, Mr. Oyler agrees, upon request, to allow the Company
or its agents to delete

 

 

3

 

any
confidential or proprietary information of the Company that is stored thereon. Except
as set forth above, Mr. Oyler agrees to return to the Company by the Termination
Date any and all documents, books, manuals, drawings, lists, writings, computer
records and other tangible Company property in his possession or control which
he obtained during or in connection with his employment with the Company.

 

10.                                                                                 Time to Exercise Stock Options; Acceleration of Stock
Options. Notwithstanding anything to the Contrary in the Amended
Employment Agreement, and notwithstanding any provision for the accelerated
expiration or accelerated vesting of any stock options granted to Mr. Oyler on
or prior to the Termination Date (the “Stock Options”) in any stock option
agreement or under any plan of the Company under which the Stock Options were
granted, as a result of the cessation of Mr. Oyler’s employment: (a) the Stock
Options shall not expire until the earlier of (i) the expiration of the
otherwise applicable term thereof or (ii) one (1) year from the Resignation
Date (June 7, 2007); and (b) all Stock Options shall be vested and become
exercisable in full as of the Termination Date.

 

11.                                                                                 Consulting Services. Mr. Oyler hereby
agrees that until July 7, 2007 he will provide consulting services to the
Company to the extent reasonably requested by the Company, provided that for
any such services rendered after the Termination Date Mr. Oyler shall be
compensated for such services at the rate of $250 per hour, and further
provided that the Company shall reimburse Mr. Oyler for all out-of-pocket
expenses incurred by him in connection with such consulting services, subject
to the delivery of documentary evidence of such expenses as specified by the
Company’s then applicable expense reimbursement policy. In performing the
consulting services required under this paragraph 11, Mr. Oyler shall be an
independent contractor of the Company, and he shall be solely responsible for
any withholding or payment of any income tax on amounts paid hereunder.

 

12.                                                                                 Amended Employment Agreement Remains In Effect.
The parties acknowledge that the Amended Employment Agreement shall remain
in full force and effect following the effective date of this Agreement and
that all terms, conditions, covenants and obligations contained therein shall
continue to be binding upon the parties, except as expressly modified herein. Nothing
contained herein shall be construed as waiving or releasing any of the terms,
conditions or covenants set forth in the Amended Employment Agreement that have
not been modified by the terms of this Separation Agreement. It is expressly
acknowledged and agreed that the terms, promises, covenants and obligations of
paragraphs 1 and 15-31 of the Amended Employment Agreement shall remain in full
force and effect and shall be binding on the parties, following the effective
date of this Separation Agreement, except as modified hereby.

 

13.                                                                                 Release of Claims by Mr. Oyler. In
consideration of the promises, covenants and agreements contained herein, Mr.
Oyler, for himself and his heirs, successors, and assigns, hereby releases and
forever discharges the Company and its officers, shareholders, directors,
employees, agents, representatives, attorneys, parent, subsidiary and
affiliated companies, successors and assigns, and each of them, of and from any
and all claims, losses, demands, actions, causes of action, obligations, debts
and/or liabilities (“Oyler Released Claims”)

 

 

4

 

relating to
any matters of any kind, presently known or unknown, in law or in equity,
arising out of any acts, omissions, events or facts which have occurred up to,
and including the time of, the effective date of this Separation Agreement.

 

a.                                                                                                                                       The
Oyler Released Claims released pursuant to the foregoing paragraph include,
without limitation, any claims, losses, demands, actions, causes of action,
obligations, debts, and/or liabilities resulting from or arising out of Mr.
Oyler’s employment by the Company, the termination thereof, or any transaction,
event, action, dispute and/or activity related thereto, as well as any claims
arising under Title VII of the Civil Rights Act of 1964, as amended, the Fair
Labor Standards Act, the Equal Pay Act of 1963, the Americans with Disabilities
Act, the Family and Medical Leave Act (“FMLA”), the Employment Retirement
Income Security Act (“ERISA”), the Utah Anti-Discrimination Act, the Utah
Payment of Wages Act, the Utah Protection of Public Employees Act, or any other
federal, state or local statute prohibiting employment discrimination,
harassment, or retaliation, or any claim for general, special, or other
compensatory damages, consequential damages, punitive damages, back or front
pay, fringe benefits, attorneys’ fees, costs, or other damages or expenses, or
any claim for injunctive relief or other equitable relief, or any claim for
alleged wrongful discharge, breach of express or implied contract, breach of the
covenant of good faith and fair dealing, termination in violation of public
policy, negligence, negligent hiring, retention, or employment, invasion of
privacy, defamation, intentional or negligent infliction of emotional distress,
fraud, assault and battery, interference with contract or other economic
opportunity, failure to pay wages due or other monies owed, failure to pay
pension benefits, conversion, breach of duty, vicarious liability, or any claim
arising under any federal or state statute or local ordinance regulating the
health and/or safety of the workplace, or any other tort, contract or statutory
claim.

 

b.                                                                                                                                      Notwithstanding
the terms of the foregoing paragraph, Mr. Oyler does not release the Company
from any obligations it may have with respect to any of the following, except
as otherwise expressly provided in this Separation Agreement:  the Employee’s right to the continuation of
health, dental and vision insurance coverage under COBRA; Mr. Oyler’s rights
under the Evans & Sutherland Incentive Plan (which is sometimes referred to
as “ESIP” or ‘MIP”), the SERP, the Company’s 401(k) Deferred Compensation Plan,
and the ESP; Mr. Oyler’s rights with respect to his stock options as modified
hereby; the Company’s obligations under the continuing provisions of the
Amended Employment Agreement, as set forth in Section 9 herein; the Company’s
obligations under the Agreement and Release of ADEA Claims, of even date
herewith (the “ADEA Agreement”), the Company’s indemnification obligations
under Article VI of the Company’s Bylaws, as amended and restated as of the
date hereof, and the Company’s obligations under this Separation Agreement.

 

14.                                                                                 Release of Claims by the Company. In
consideration of the promises, covenants and agreements contained herein, the Company,
for itself and its officers, directors, shareholders, employees, agents,
representatives, attorneys, parent, subsidiary and affiliated companies,
predecessors, successors, and assigns, hereby releases and forever discharges

 

 

5

 

Mr. Oyler and
his agents, representatives, attorneys, heirs, successors and assigns, and each
of them, of and from any and all claims, losses, demands, actions, causes of
action, obligations, debts and/or liabilities (“Company Released Claims”)
relating to any matters of any kind, presently known or unknown, in law or in
equity, arising out of any acts, omissions, events or facts which have occurred
up to, and including the time of, the effective date of this Separation Agreement.

 

a.                                                                                                                                       The
Company Released Claims released pursuant to the foregoing paragraph include,
without limitation, any claims, losses, demands, actions, causes of action,
obligations, debts, and/or liabilities resulting from or arising out of Mr.
Oyler’s employment by the Company, the termination thereof, or any transaction,
event, action, dispute and/or activity related thereto, as well as any claim
for general, special, or other compensatory damages, consequential damages,
punitive damages, attorneys’ fees, costs, or other damages or expenses, or any
claim for injunctive relief or other equitable relief, or any claim for alleged
breach of express or implied contract, breach of the covenant of good faith and
fair dealing, negligence, negligent hiring, retention, or employment, invasion
of privacy, defamation, intentional or negligent infliction of emotional
distress, fraud, assault and battery, interference with contract or other
economic opportunity, conversion, breach of duty, vicarious liability, or any
other tort, contract or statutory claim.

 

b.                                                                                                                                      Notwithstanding
the terms of the foregoing paragraph, the Company does not release Mr. Oyler
from any obligations he may have with respect to any of the following:  Mr. Oyler’s obligations under the continuing
provisions of the Amended Employment Agreement as set forth in Section 9
herein; Mr. Oyler’s obligations under the ADEA Agreement; and Mr. Oyler’s
obligations under this Separation Agreement.

 

15.                                                                                 No Admission of Liability. Neither the
execution of this Agreement, the consideration given for this Agreement, nor
the performance of any of the terms of this Agreement shall constitute or be
construed as any admission by the Company of any liability of any kind to Mr.
Oyler, or by Mr. Oyler of any liability of any kind to the Company, which
respective liability is expressly denied.

 

16.                                                                                 Effective Date of Separation Agreement. This
Separation Agreement shall take effect and be binding upon the parties at such
time as it has been signed by both parties.

 

17.                                                                                 Entire Agreement. This Agreement
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof, and fully supersedes any and all prior agreements or
understandings, oral or written, between the parties hereto pertaining to the
subject matter hereof. Notwithstanding the foregoing, it is expressly
understood and agreed by the parties that the Amended Employment Agreement,
including paragraphs 1 and 15 to 31 of the Amended Employment Agreement, shall
remain in full force and effect, as provided above and that the Agreement and
Release of ADEA Claims between the Company and Mr. Oyler, of even date
herewith, shall not be superseded.

 

 

6

 

18.                                                                                 Governing Law. It is understood and
agreed that the construction and interpretation of this Separation Agreement
shall be governed by the laws of the State of Utah.

 

19.                                                                                 Choice of Law; Jurisdiction and Venue. This
Separation Agreement shall be construed, interpreted and the rights of the
parties determined in accordance with the laws of the State of Utah (without
giving effect to its choice of law principles). Each of the parties submits to
the jurisdiction of any state or federal court sitting in Utah, in any action
or proceeding arising out of or relating to this Separation Agreement and
agrees that all claims in respect of the action or proceeding may be heard and
determined in any such court. Each party also agrees not to bring any action or
proceeding arising out of or relating to this Separation Agreement in any other
court. Each of the parties waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond, surety
or other security that might be required of any other party with respect
thereto.

 

20.                                                                                 Cooperation. Upon Mr. Oyler’s
reasonable request, the Company shall take commercially reasonable steps to
cooperate with Mr. Oyler in the timing of any payments hereunder to accommodate
Mr. Oyler’s personal tax planning, provided that, in the Company’s sole
discretion, such cooperation shall not be detrimental to the Company or
inconsistent with or prohibited by any law, rule, regulation, court order,
contract or plan document applicable to the Company.

 

21.                                                                                 Tax Withholding. The Company shall
withhold from all payments made to Mr. Oyler hereunder all required amounts for
income taxes and payroll taxes, both federal and state; provided that no
withholding shall be required on amounts paid by the Company to Mr. Oyler for
consulting services pursuant to paragraph 11 herein; and provided further, that
no withholding shall be required on any expense reimbursements pursuant to
paragraph 7 herein.

 

[Remainder of
page intentionally left blank]

 

[Signature page
follows immediately]

 

 

7

 

IN WITNESS
WHEREOF, the parties hereto have executed this Separation Agreement on the
dates set forth below.

 

	
   

  	
   

  	
  EVANS
  & SUTHERLAND COMPUTER

  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
     8-June-2006

  	
   

  	
  By:

  	
     /s/David
  Coghlan

  	
   

  
	
   

  	
   

  	
   

  	
  David
  Coghlan, Chairman of the Board

  	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
     8-June-2006

  	
   

  	
       /s/James
  R. Oyler

  	
   

  
	
   

  	
   

  	
   

  	
  JAMES R.
  OYLER

  
									

 

 

8

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