Document:

EMPLOYMENT AGREEMENT

         THIS  EMPLOYMENT  AGREEMENT (the  "Agreement") is made and entered into
effective  as of the  22nd  day of  September,  2000,  by and  between  EVANS  &
SUTHERLAND COMPUTER CORPORATION, a Utah corporation (the "Company") and NICHOLAS
J. IUANOW (the "Executive").

                              W I T N E S S E T H:

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

         WHEREAS,  the Company  desires to have the  benefit of the  Executive's
efforts and services; 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
hereby 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 payable not later
         than ten (10) days following an applicable  Termination  Date and which
         shall be equal to the sum of the following amounts:

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

                           (ii) Reimbursement for any and all monies advanced 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  previously
                  earned  through  the  Termination  Date  and  deferred  at the
                  election  of  the   Executive  or  pursuant  to  any  deferred
                  compensation plans then in effect;

                           (iv) The full amount of any stated  bonus  payable to
                  the Executive in accordance with Sections 6(b)-(c) herein with
                  respect to the year in which termination occurs; and

<PAGE>

                           (v) All  other  payments  and  benefits  to which the
                  Executive may be entitled  under the terms of any benefit plan
                  of the Company.

                  (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  General  Rules and  Regulations  of the
         Act,  provided that any pledgee of Company voting  securities shall not
         be deemed to be the Beneficial  Owner thereof prior to its  disposition
         of, or acquisition of voting rights with respect to, such securities;

                  (f) "Board" shall mean the Board of Directors of the Company;

                  (g) "Cause" shall mean any of the following:

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

                           (ii)  Conviction  of  a  felony,  as  evidenced  by a
                  binding  and  final  judgment,  order or  decree of a court of
                  competent jurisdiction, in effect after exhaustion or lapse of
                  all rights of appeal, which the Board determines,  in its sole
                  discretion, has a significant adverse impact on the Company in
                  the conduct of the Company's business;

                           (iii)  Neglect or refusal by the Executive to perform
                  the   Executive's   duties   or    responsibilities    (unless
                  significantly changed without the Executive's consent); 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.

                                       2
<PAGE>

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

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

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

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

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

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

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

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

                                       3
<PAGE>

         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 11 of
         the  Federal  Bankruptcy  Code (or any  successor  or other  statute of
         similar import).  Notwithstanding the foregoing,  a "Change of Control"
         shall not  include  any  transaction  that  constitutes  a "Rule  13e-3
         transaction"  under Rule 13e-3 of the Act or an "issuer  tender  offer"
         under Rule 13e-4 of the Act.

                  (i)  "Change  of  Control   Period"   shall  mean  the  period
         commencing  on the date a Change of  Control  occurs  and ending on the
         second anniversary of such Change of Control;

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

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

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

                  (m)      "Good Reason" shall mean:

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

                           (ii) The removal of the Executive from or any failure
                  to reelect the Executive to any of the  positions  held by the
                  Executive  as of the  date  of  this  Agreement  or any  other
                  positions to which the Executive  shall  thereafter be elected
                  or assigned  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,  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 on the day  preceding the
                  date of this  Agreement and that which is necessary to perform
                  any additional duties assigned to the Executive  following the
                  date of this  Agreement,  which  change  or  reduction  is not
                  generally effective for all executives employed by the Company
                  (or its successor) in the Executive's class or category; or

                                       4
<PAGE>

                  (iv) Breach or  violation  of any  material  provision of this
                  Agreement by the Company;

                  (n) "Gross Income" shall mean the Executive's current calendar
         year  targeted  compensation  (base salary plus cash  bonus),  plus any
         other compensation payable to the Executive by the Company for the same
         period, whether taxable or non-taxable;

                  (o) "Notice of Termination" shall mean the notice described in
         Section 14 herein;

                  (p) "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;

                  (q)  "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; or

                  (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;

                  (r) "Termination  Payment" shall mean the payment described in
         Section 13 herein;

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

         2.       EMPLOYMENT.

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

                                       5
<PAGE>

         3.       TERM.

         The  employment  of  the  Executive  by  the  Company  pursuant  to the
provisions  of this  Agreement  shall  commence  on the date  hereof  and end on
December 31, 2001,  unless further extended or sooner  terminated as hereinafter
provided.  On  December  31,  2001,  and on the last day of  December  each year
thereafter,  the  term  of  the  Executive's  employment  shall,  unless  sooner
terminated as hereinafter provided, be automatically  extended for an additional
one year period from the date  thereof  unless,  at least six (6) months  before
such  December  31, the Company  shall have  delivered  to the  Executive or the
Executive  shall have  delivered to the Company  written notice that the term of
the  Executive's  employment  hereunder will not be extended beyond its existing
duration.

         4.       POSITIONS AND DUTIES.

         The  Executive  shall  serve as Vice  President  and  Treasurer  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  Board.  The  Executive  shall  devote  substantially  all the
Executive's working time and efforts to the business and affairs of the Company.

         5.       PLACE OF PERFORMANCE.

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

         6.       COMPENSATION AND RELATED MATTERS.

                  (a)  Salary.  The  Company  shall  pay  to the  Executive  his
         annualized  base  salary  (as in effect on the  effective  date of this
         Agreement  and  subject  to  adjustment  as  provided  herein) in equal
         installments  (as  nearly  as  practicable),  in  accordance  with  the
         Company's  standard  payroll  policy (as in effect  from time to time),
         which  currently  provides for payments to be made every two weeks,  in
         arrears. Such annualized base salary may be increased from time to time
         in  accordance  with normal  business  practices  of the  Company.  The
         annualized  base salary of the Executive  shall not be decreased  below
         its then existing amount during the term of this Agreement.

                  (b) ESIP.  The Executive  shall be entitled to  participate in
         the Evans & Sutherland Incentive Program.

                  (c) SERP.  The Executive  shall be entitled to  participate in
         the Company's Supplemental Executive Retirement Plan.

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

                                       6
<PAGE>

                  (e) Other Benefits.  The Company shall provide  Executive with
         all other  benefits  normally  provided  to an  employee of the Company
         similarly  situated  to  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, but in no event less than fifteen (15) days.
         The Executive  shall also be entitled to all paid holidays given by the
         Company to its executives.

                  (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.

         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 any 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  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

                                       7
<PAGE>

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.  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,  or as described in
paragraph 13(g) below, 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  applicable
Termination   Payment.   The  Executive   shall  not,  in  connection  with  any
consideration  receivable  in  accordance  with this  Section 11, be required to
mitigate  the amount of such  consideration  by  securing  other  employment  or
otherwise and such consideration shall not be reduced by reason of the Executive
securing other employment or for any other reason.

         12.      VOLUNTARY TERMINATION BY EXECUTIVE.

         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,  the  Executive  shall receive the  Executive's  Accrued
Benefits as of the Termination Date and shall not be entitled to any Termination
Payment.  If the  Executive's  voluntary  termination  (other than a termination
described in paragraph 13(g) below) is for Good Reason, 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  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.

                                       8
<PAGE>

         13.      TERMINATION PAYMENT.

                  (a) If the Executive's employment is terminated as a result of
         death or disability,  the lump sum  Termination  Payment payable to the
         Executive shall be equal to the Executive's  Gross Income.  The Company
         will pay the full medical,  dental and vision premiums for continuation
         coverage  under COBRA for the Executive and  dependents who qualify for
         continuation   coverage   under  COBRA  for  one  year   following  the
         Termination Date.

                  (b)  If  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 the Executive's Gross Income. The Company will pay the full medical,
         dental and vision  premiums for  continuation  coverage under COBRA for
         the  Executive and  dependents  who qualify for  continuation  coverage
         under COBRA for one year following the Termination Date.

                  (c) If,  during 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 one and  one-half  (1.5) times the
         Executive's Gross Income. The Company will pay the full medical, dental
         and vision  premiums  for  continuation  coverage  under  COBRA for the
         Executive and  dependents who qualify for  continuation  coverage under
         COBRA for one and one-half (1.5) years following the Termination Date.

                  (d) It is the intention of the Company and the Executive  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,  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

                                       9
<PAGE>

         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(e). 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(e),  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 Accrued Benefits,  earned on or after the date of Change
         of Control by the  Executive  pursuant  to the  Company's  compensation
         programs  if such  payments  would  have been made in the future in any
         event,  even  though the timing of such  payment  is  triggered  by the
         Change of Control,  are reasonable  compensation for services  rendered
         prior to the Change of Control;  provided,  however,  that in the event
         legal  counsel so requests in connection  with the opinion  required by
         this  Section  13(e),  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(e) shall be of no further force or effect.

                  (f) The Termination Payment shall be payable 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 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.

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

                                       10
<PAGE>

         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  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  directors  of the
         Company then in office;

                  (c) If the  Executive  shall in good faith furnish a Notice of
         Termination for Good Reason and the Company notifies the Executive that
         a dispute exists  concerning the  termination,  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 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 19, (B) the date of the
         Executive's  death or (C) one day prior to the second (2nd) anniversary
         of a Change of Control,  and the Executive's  Termination  Payment,  if
         applicable,   shall  reflect  events   occurring  after  the  Executive
         delivered the Executive's  Notice of  Termination;  or (ii) Good Reason
         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; and

                  (d) If the  Executive  gives  notice to  terminate  his or her
         employment  for Good Reason and a dispute  arises as to the validity of
         such dispute, 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.

         15.      NONDISCLOSURE OF PROPRIETARY INFORMATION.

         Recognizing  that the Company is presently  engaged,  and may hereafter
continue to be engaged,  in the  research  and  development  of  processes,  the
manufacturing of products or performance of services, which involve experimental
and  inventive  work and that  the  success  of its  business  depends  upon the
protection of the  processes,  products and services by patent,  copyright or by
secrecy and that the Executive  has had, or during the course of his  engagement
may have,  access to Proprietary  Information,  as hereinafter  defined,  of the
Company or other  information and data of a secret or proprietary  nature of the

                                       11
<PAGE>

Company  which the Company  wishes to keep  confidential  and the  Executive has
furnished,  or during the course of his engagement may furnish, such information
to the Company, the Executive agrees that:

                  (a) "Proprietary  Information" shall mean any and all methods,
         inventions,  improvements or discoveries,  whether or not patentable or
         copyrightable, and any other information of a similar nature related to
         the  business of the Company  disclosed  to the  Executive or otherwise
         made known to him as a consequence  of or through his engagement by the
         Company  (including  information  originated  by the  Executive) in any
         technological  area  previously  developed by the Company or developed,
         engaged  in,  or  researched,  by the  Company  during  the term of the
         Executive's engagement,  including,  but not limited to, trade secrets,
         processes,   products,  formulae,  apparatus,   techniques,   know-how,
         marketing plans, data, improvements,  strategies,  forecasts,  customer
         lists, and technical requirements of customers, unless such information
         is in the public domain to such an extent as to be readily available to
         competitors;

                  (b) The Executive  acknowledges that the Company has exclusive
         property rights to all Proprietary Information and the Executive hereby
         assigns  all  rights  he might  otherwise  possess  in any  Proprietary
         Information  to the Company.  Except as required in the  performance of
         his duties to the Company, the Executive will not at any time during or
         after the term of his engagement,  which term shall include any time in
         which the  Executive  may be retained  by the Company as a  consultant,
         directly or indirectly  use,  communicate,  disclose or disseminate any
         Proprietary   Information  or  any  other   information  of  a  secret,
         proprietary,  confidential or generally  undisclosed nature relating to
         the Company, its products, customers, processes and services, including
         information relating to testing, research, development,  manufacturing,
         marketing and selling;

                  (c) All documents,  records,  notebooks,  notes, memoranda and
         similar repositories of, or containing,  Proprietary Information or any
         other information of a secret,  proprietary,  confidential or generally
         undisclosed  nature  relating  to the  Company  or its  operations  and
         activities  made  or  compiled  by the  Executive  at any  time or made
         available  to him or her prior to or during the term of his  engagement
         by the  Company,  including  any and all copies  thereof,  shall be the
         property of the  Company,  shall be held by him or her in trust  solely
         for the benefit of the  Company,  and shall be delivered to the Company
         by him or her on the  termination  of his or her  engagement  or at any
         other time on the request of the Company; and

                  (d) The  Executive  will  not  assert  any  rights  under  any
         inventions, copyrights, discoveries, concepts or ideas, or improvements
         thereof,  or know-how related thereto,  as having been made or acquired
         by him or her  prior to his or her  being  engaged  by the  Company  or
         during the term of his  engagement if based on or otherwise  related to
         Proprietary Information.

         16.      ASSIGNMENT OF INVENTIONS.

                  (a) For  purposes of this  Section  16, the term  "Inventions"
         shall mean  discoveries,  concepts,  and ideas,  whether  patentable or
         copyrightable  or not,  including  but  not  limited  to  improvements,

                                       12
<PAGE>

         know-how, data, processes,  methods,  formulae, and techniques, as well
         as improvements  thereof or know-how  related  thereto,  concerning any
         past,  present  or  prospective  activities  of the  Company  which the
         Executive  makes,  discovers  or  conceives  (whether or not during the
         hours of his  engagement or with the use of the  Company's  facilities,
         materials or  personnel),  either  solely or jointly with others during
         his or her  engagement by the Company or any affiliate and, if based on
         or related to Proprietary Information, at any time after termination of
         such  engagement.  All  Inventions  shall be the sole  property  of the
         Company, and Executive agrees to perform the provisions of this Section
         16 with  respect  thereto  without  the  payment by the  Company of any
         royalty  or  any   consideration   therefor   other  than  the  regular
         compensation  paid to the  Executive  in the capacity of an employee or
         consultant.

                  (b) The Executive shall maintain written notebooks in which he
         or she  shall set  forth,  on a current  basis,  information  as to all
         Inventions,  describing  in  detail  the  procedures  employed  and the
         results  achieved as well as  information as to any studies or research
         projects  undertaken on the  Company's  behalf.  The written  notebooks
         shall  at all  times  be the  property  of the  Company  and  shall  be
         surrendered  to the Company upon  termination  of his or her engagement
         or, upon request of the Company, at any time prior thereto.

                  (c) The Executive  shall apply,  at the Company's  request and
         expense,  for United  States and foreign  letters  patent or copyrights
         either  in the  Executive's  name or  otherwise  as the  Company  shall
         desire.

                  (d) The Executive  hereby assigns to the Company all of his or
         her rights to such  Inventions,  and to applications  for United States
         and/or foreign letters patent or copyrights and to United States and/or
         foreign letters patent or copyrights granted upon such Inventions.

                  (e) The Executive shall  acknowledge  and deliver  promptly to
         the Company,  without charge to the Company,  but at its expense,  such
         written  instruments  (including  applications  and assignments) and do
         such other acts, such as giving testimony in support of the Executive's
         inventorship,  as may be  necessary  in the  opinion of the  Company to
         obtain,  maintain,  extend,  reissue and enforce  United  States and/or
         foreign letters patent and copyrights relating to the Inventions and to
         vest the entire right and title  thereto in the Company or its nominee.
         The Executive  acknowledges and agrees that any copyright  developed or
         conceived of by the Executive during the term of Executive's employment
         which is related to the  business of the  Company  shall be a "work for
         hire" under the copyright law of the United States and other applicable
         jurisdictions.

                  (f) The Executive  represents  that his or her  performance of
         all the terms of this  Agreement and as an employee of or consultant to
         the Company  does not and will not breach any trust prior to his or her
         employment by the Company.  The Executive  agrees not to enter into any
         agreement  either  written or oral in conflict  herewith and represents
         and agrees  that he or she has not  brought and will not bring with him
         to the Company or use in the performance of his or her responsibilities
         at the Company any  materials or documents of a former  employer  which

                                       13
<PAGE>

         are  not  generally  available  to the  public,  unless  he or she  has
         obtained  written  authorization  from the  former  employer  for their
         possession and use, a copy of which has been provided to the Company.

                  (g) No provisions of this Section shall be deemed to limit the
         restrictions applicable to the Executive under Section 15.

                  (h) No provisions of this Section shall be deemed or construed
         to  require  the  Executive  to assign  to the  Company  any  rights or
         intellectual  property  with  respect  to any  invention  which  (i) is
         created  by the  Executive  entirely  on his own  time,  (ii)  does not
         constitute an "employment  invention" as defined in the Utah Employment
         Inventions  Act, and (iii) is not exempted  from the  application f the
         Utah Employment Inventions Act.

         17.      SHOP RIGHTS.

         The  Company  shall  also  have  the  royalty-free  right to use in its
business, and to make, use and sell products,  processes and/or services derived
from any inventions, discoveries, concepts and ideas, whether or not patentable,
including but not limited to processes,  methods,  formulas and  techniques,  as
well as improvements  thereof or know-how related thereto,  which are not within
the scope of Inventions as defined in Section 16 but which are conceived or made
by the  Executive  during the period he or she is engaged by the Company or with
the use or assistance of the Company's facilities, materials or personnel.

         18.      NON-COMPETE.

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

                  (a) Within any  jurisdiction  or marketing  area in the United
         States  in  which  the  Company  or any  subsidiary  thereof  is  doing
         business,  own, manage, operate or control any business of the type and
         character engaged in and competitive with the Company or any subsidiary
         thereof.  For purposes of this Section,  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) Within any  jurisdiction  or marketing  area in the United
         States  in  which  the  Company  or any  subsidiary  thereof  is  doing
         business,  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 Company or any of its subsidiaries;
         or

                  (c) Solicit any similar business to that of the Company's for,
         or sell  any  products  that  are in  competition  with  the  Company's
         products to, any company in the United States, which is, as of the date
         hereof, 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
         date of this Agreement; or

                  (d) Solicit the employment of any full time employee  employed
         by the Company or its  subsidiaries  as of the date of  termination  of
         this Agreement.

                                       14
<PAGE>

         19.      REMEDIES AND JURISDICTION.

                  (a) The Executive hereby acknowledges and agrees that a breach
         of the agreements  contained in this  Agreement will cause  irreparable
         harm and damage to the  Company,  that the remedy at law for the breach
         or threatened breach of the agreements set forth in this Agreement will
         be inadequate, and that, in addition to all other remedies available to
         the Company for such breach or threatened  breach  (including,  without
         limitation,  the  right  to  recover  damages),  the  Company  shall be
         entitled to injunctive  relief for any breach or  threatened  breach of
         the agreements contained in this Agreement.

                  (b) All claims, disputes and other matters in question between
         the parties  arising  under this  Agreement,  shall,  unless  otherwise
         provided herein,  be decided by arbitration in Salt Lake City, Utah, in
         accordance  with the Model  Employment  Arbitration  Procedures  of the
         American Arbitration  Association  (including such procedures governing
         selection  of the  specific  arbitrator  or  arbitrators),  unless  the
         parties  mutually agree  otherwise.  The Company shall pay the costs of
         any such arbitration.  The award by the arbitrator or arbitrators shall
         be final,  and  judgment  may be  entered  upon it in  accordance  with
         applicable  law in any  state  or  Federal  court  having  jurisdiction
         thereof.

         20.      ATTORNEYS' FEES.

         In  the  event  that  either  party  hereunder   institutes  any  legal
proceedings in connection  with its rights or obligations  under this Agreement,
the prevailing  party in such  proceeding  shall be entitled to recover from the
other party,  all costs incurred in connection with such  proceeding,  including
reasonable  attorneys'  fees,  together with  interest  thereon from the date of
demand at the rate of twelve percent (12%) per annum.

         21.      SUCCESSORS.

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

         22.      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.

                                       15
<PAGE>

         23.      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.

         24.      SURVIVABILITY.

         The  provisions  of Sections  15, 16, 17, 18, 19, and 20 shall  survive
termination of this Agreement.

         25.      ENTIRE AGREEMENT.

         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.

         26.      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.

         27.      NOTICE.

         Notices given pursuant to this Agreement  shall be in writing and shall
be deemed given when received,  and if mailed,  shall be mailed by United States
registered or certified mail, return receipt requested,  addressee only, postage
prepaid, if to the Company, to:

                  Company:          Evans & Sutherland Computer Corporation
                                    600 Komas Drive
                                    Salt Lake City, Utah 84108
                                    Attn: Human Resources
                                    Fax: (801) 588-4500

                  Executive:        Nicholas J. Iuanow
                                    P.O. Box 3206
                                    Salt Lake City, Utah 84110
                                    Phone: (801) 534-1817

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.

                                       16
<PAGE>

         28.      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.

         29.      HEADINGS.

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

         30.      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.

         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 CEO

                                    "EXECUTIVE"

                                    /s/ Nicholas J. Iuanow
                                    --------------------------------------
                                    Nicholas J. Iuanow

                                       17EMPLOYMENT AGREEMENT - CHAIRMAN OF THE BOARD

EMPLOYMENT AGREEMENT

(Chairman of the Board)

THIS AGREEMENT, made and entered into as of August 17, 2000, by
and between Michael J. Birck (the "Executive") and Tellabs, Inc., a Delaware
corporation (the "Company");

WITNESSETH THAT:

WHEREAS, the parties desire to enter into this Agreement
pertaining to the continuing employment of the Executive by the Company;

NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth below, it is hereby covenanted and agreed by the Executive and the
Company as follows:

1.Employment.  Subject to the terms of this Agreement,
the Company hereby agrees to employ the Executive as its Chairman of the Board of
Directors during the Agreement Term (as defined below), with the authority,
responsibilities and duties described in the Company's By-Laws as amended and restated
August 16, 2000, with such additions or modifications thereto which are consistent with
his authority, responsibilities and duties hereunder, as the Board of Directors of the
Company (the "Board") may, from time to time, in its discretion and after
consultation with the Executive, adopt.  The "Agreement Term" shall be the
period beginning on September 18, 2000 (the "Effective Date") and ending
on the second anniversary of the Effective Date, subject to earlier termination as
provided herein; provided, however, that the Agreement Term will be automatically
extended by twelve months on the first anniversary of the Effective Date and on each
anniversary thereof, unless one party to this Agreement provides written notice of
non-renewal to the other party at least 30 days prior to the date of such automatic
extension.

2.Performance of Duties.  The Executive agrees that
during his employment with the Company, he shall devote his full business time,
energies and talents to serving as its Chairman of the Board of Directors and that he
shall perform his duties faithfully and efficiently subject to the directions of the
Board.  Notwithstanding the foregoing provisions of this Section  2, the
Executive may (i) serve as a director, trustee or officer or otherwise participate
in not-for-profit educational, welfare, social, religious and civic organizations;
(ii) after consultation with, and approval by, the Board, serve as a director of
any for-profit business which does not compete with the Company or any of its
subsidiaries or affiliates, and (iii) acquire passive investment interests in one
or more entities; provided, that such activities described in clauses (i), (ii) and
(iii) are not prohibited under the Company's Integrity Policy and do not inhibit or
interfere with the performance of the Executive's duties under this Agreement.

3.Compensation.  Subject to the terms of this Agreement, during the Agreement Term, while the Executive is employed by the Company, the Company shall compensate him for his services as follows:

a.Base Salary.  The Executive shall receive a Base
Salary of $680,000 per annum payable in 26 bi-weekly installments.  The Executive's
Base Salary shall be reviewed and subject to increase or decrease annually by the
Board pursuant to its normal performance review policies for senior executives, with
the first such review occurring in 2001.

b.Annual Bonus.  For each calendar year, the
Executive shall be eligible to receive an Annual Bonus payment in accordance with the
Company's annual bonus plans as in effect from time to time.  The target level for each
Annual Bonus shall not be less than 50% of the Executive's Base Salary for the year,
provided that the Company achieves the applicable financial and strategic objectives
established for the year. Commencing with calendar year 2001, such objectives will be
established by the Compensation Committee of the Board, in consultation with the
Executive and other senior officers.  The Executive shall be eligible to receive a
bonus for calendar year 2000, based on the Company's achievement of financial and
strategic goals established for the year 2000. 

c.Annual Equity Awards.  The Executive shall be
entitled to receive stock option grants or other stock based compensation as may from
time to time be awarded by the Compensation Committee.

d.Employee Benefits, Fringe Benefits and Perquisites.
The Executive shall be provided with employee benefits, fringe benefits and perquisites
on a basis no less favorable than such benefits and perquisites are provided by the
Company from time to time to the Company's other senior executives.  In the event of
the Executive's termination of employment with the Company for any reason other than
termination by the Company for Cause, the Executive shall be entitled to reimbursement
of tax and financial planning costs and an office and secretarial assistance on the same
basis as provided during the Agreement Term through the tenth anniversary of the date of
termination of employment.

e.Expense Reimbursement.  The Company will reimburse
the Executive for all reasonable expenses incurred by him (i) in connection with
the negotiation and preparation of this Agreement, which reimbursement shall not exceed
$25,000, and (ii) in the performance of his duties in accordance with the Company's
policies applicable to senior executives.

f.Change in Control Benefits.  Following the Effective
Date, the Executive and the Company shall continue to be a party to the change of
control agreement which the Company has entered into with Executive, it being
understood that the Executive shall only receive whatever incremental payments or
benefits are provided under such change of control agreement and that there shall be no
duplication of payments or benefits under this Agreement and such change of control
agreement.

g.Additional Payments.  If any payments or benefits
received or to be received by the Executive in connection with the Executive's
employment (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, or any person affiliated with the Company)
(the "Payments"), will be subject to the tax (the "Excise Tax")
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code") (or any similar tax that may hereafter be imposed), the Company
shall pay at the time specified below, an additional amount
(the "Gross-Up Payment") such that the net amount retained by the Executive,
after deduction of any Excise Tax on the Payments and any federal, state and local
income or other applicable tax and Excise Tax upon the payment provided for by this
paragraph, shall be equal to the Payments.  For purposes of determining the amount of
the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at the
Executive's highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes at the
Executive's highest marginal rate of taxation in the state and locality of the
Executive's residence on the date on which the Excise Tax is determined, net of the
maximum reduction in federal income taxes which could be obtained from deduction of such
state and local taxes.  The computations required by this paragraph shall be made by the
independent public accountants then regularly retained by the Company, in consultation
with tax counsel selected by them and acceptable to the Executive.  The Company shall
provide the Executive with sufficient tax and compensation data to enable the Executive
or his tax advisor to verify such computations and shall reimburse the Executive for
reasonable fees and expenses incurred with respect thereto.  In the event that the
Excise Tax is subsequently determined to be less than the amount taken into account
hereunder, the Executive shall repay to the Company at the time that the amount of such
reduction in Excise Tax is finally determined the portion of the Gross-Up Payment
attributable to such reduction (plus the portion of the Gross-Up Payment attributable
to the Excise Tax and federal and state and local income tax imposed on the Gross-Up
Payment being repaid by the Executive) plus interest on the amount of such repayment
from the date the Gross-Up Payment was initially made to the date of repayment at the
rate provided in Section 1274(b)(2)(B) of the Code (the "Applicable Rate").
In the event that the Excise Tax is determined by the Internal Revenue Service or by
such independent public accountants to exceed the amount taken into account hereunder
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make an additional
Gross-Up Payment in respect of such excess (plus any interest, penalties, fines or
additions to tax payable with respect to such excess) at the time that the amount of
such excess if finally determined. Any payment to be made under this paragraph shall be
payable within five (5) days of the determination of the accountants that such a payment
is required hereunder and, if applicable, within five (5) days of such determination
that the Excise Tax is greater or less than initially calculated but, in no event,
later than thirty (30) days after the Executive's receipt of the Payments resulting in
such Excise Tax.

4.Indemnification.  The Company agrees that if the
Executive is made a party, or is threatened to be made a party, to any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(a "Proceeding"), by reason of the fact that he is or was a director, officer
or employee of the Company or is or was serving at the request of the Company as a
director, officer, member, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, including service with respect to employee benefit
plans, whether or not the basis of such Proceeding is the Executive's alleged action in
an official capacity while serving as a director, officer, member, employee or agent,
the Executive shall be indemnified and held harmless by the Company to the fullest
extent legally permitted or authorized by the Company's certificate of incorporation or
bylaws or resolutions of the Company's Board of Directors or, if greater, by the laws of
the State of Delaware, against all cost, expense, liability and loss (including,
without limitation, attorneys' fees, judgments, fines, ERISA excise taxes or other
liabilities or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by the Executive in connection therewith, and such indemnification
shall continue as to the Executive even if he has ceased to be a director, member,
employee or agent of the Company or other entity, with respect to acts or omissions
which occurred prior to his cessation of employment with the Company, and shall inure
to the benefit of the Executive's heirs, executors and administrators.  The Company
shall advance to the Executive all reasonable costs and expenses incurred by him in
connection with a Proceeding within 20 calendar days after receipt by the Company of a
written request for such advance.  Such request shall include an undertaking by the
Executive to repay the amount of such advance if it shall ultimately be determined that
he is not entitled to be indemnified against such costs and expenses.

5.Termination of Employment.  Upon termination of the
Executive's employment for any reason, the Executive or, in the event of death, the
Executive's estate shall be entitled to the Executive's Base Salary prorated through
the date of termination.  Any Annual Bonus awarded to the Executive for a prior award
period, but not yet paid to the Executive, and any employee benefits to which the
Executive is entitled by reason of his employment shall be paid to the Executive or his
estate at such time as is provided by the terms of the applicable Company plan or policy.
If the Executive's employment is terminated during the Agreement Term, the Executive's
right to additional payments and benefits under this Agreement for periods after his
date of termination shall be determined in accordance with the following provisions of
this Section 5.

a.Death or Disability.  If the Executive's employment
is terminated by reason of death or by reason of the Executive's Disability, the
Executive, or, in the event of his death, his estate, shall be entitled to a prompt
cash payment of a prorated Annual Bonus for the year in which such termination occurs,
based on the target Annual Bonus for such year.  The Executive or the Company shall be
entitled to terminate the Executive's employment because of the Executive's Disability
during the Agreement Term.  "Disability" means that the Executive is disabled
within the meaning of the Company's long-term disability policy or, if there is no such
policy in effect, that (i) the Executive has been substantially unable, for 120
business days within a period of 180 consecutive business days, to perform the
Executive's duties under this Agreement, as a result of physical or mental illness or
injury, and (ii) a physician selected by the Company or its insurers, and reasonably
acceptable to the Executive or the Executive's legal representative, has determined
that the Executive is disabled.  A termination of the Executive's employment by the
Company for Disability shall be communicated to the Executive by written notice, and
shall be effective on the 30th day after receipt of such notice by the Executive
(the "Disability Effective Time"), unless the Executive returns to full-time
performance of the Executive's duties before the Disability Effective Time.

b.Termination for Cause or Voluntary Resignation.  If
the Executive's employment is terminated by the Company for Cause or if the Executive
voluntarily resigns from the employ of the Company, other than pursuant to a
Constructive Discharge, all payments and benefits to which the Executive would
otherwise be entitled under this Agreement shall immediately cease, except as otherwise
specifically provided above in this Section 5 with respect to his prorated Base
Salary through the date of termination, his Annual Bonus, if any, awarded for a prior
award period but not yet paid and his previously earned employee benefits.  For
purposes of this Agreement, the term "Cause" shall mean:

i.The Executive is convicted of a felony or any crime
involving moral turpitude; or

ii.A reasonable determination by a vote of directors
comprising two-thirds of the entire Board, after giving the Executive notice and an
opportunity to be heard, that, (A) Executive has willfully and continuously failed to
perform substantially his duties as contemplated by Section 2 above (other than such
failure resulting from incapacity due to physical or mental illness), after a written
demand for corrected performance is delivered to Executive by the Board which
specifically identifies the manners in which the Board believes the Executive has not
substantially performed his duties or (B) the Executive has engaged in gross neglect or
gross misconduct, unless the Executive had a good faith belief that such conduct was
in, or not opposed to, the best interests of the Company.

c.Termination Without Cause.  If the Company
terminates the Executive without Cause, the Executive shall be entitled to a prompt
lump sum cash payment equal to the Base Salary and Annual Bonus to which he would
otherwise would have been entitled if he had remained in the employ of the Company
through the last day of the Term of this Agreement.  For purposes of the preceding
sentence, the Annual Bonus component shall be based upon the target bonus for the year
of termination and shall include a prorated bonus for the partial year ending on the
last day of the Agreement Term.

d.Resignation for Constructive Discharge.  The
Executive's voluntary resignation for  Constructive Discharge shall be treated for all
purposes of this Agreement as a termination by the Company without Cause. For purposes
of this Agreement, "Constructive Discharge" shall mean the occurrence of any
of the following circumstances:

i.A reduction by the Company in the Executive's Base
Salary or Annual Bonus target to an amount that is less than required under
Section 3 above;

ii.The removal of the Executive from the position of
Chairman of the Board of Directors or the failure of the Executive to be nominated or
reelected to the Company's Board of Directors;

iii.Any action by the Company which results in
significant diminution in the Executive's authority, power, responsibilities or duties
from those contemplated by Sections 1 and 2 above, or the assignment to Executive
without his written consent of any duties inconsistent with the Executive's position
and status as Chairman of the Board of Directors of the Company as contemplated by
Sections 1 and 2 above, which action or assignment continues after written notice
thereof and a reasonable opportunity to cure of not less than fifteen (15) days has
been given by Executive to the Company; or

iv.Any other breach by the Company of any of its
material obligations to the Executive under this Agreement, which breach continues
after written notice thereof and a reasonable opportunity to cure of not less than
thirty (30) days has been given by Executive to the Company.

e.Change in Control.  The term "Change in
Control" of the Company means the first to occur of:

i.Any "person" (as defined in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), excluding for this purpose, the Company or any
subsidiary of the Company, or any employee benefit plan of the Company or any
subsidiary of the Company, or any person or entity organized, appointed or established
by the Company for or pursuant to the terms of any such plan which acquires beneficial
ownership of voting securities of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly of securities of the Company representing 20% or more of the combined
voting power of the Company's then outstanding securities; provided, however, that no
Change in Control will be deemed to have occurred as a result of a change in ownership
percentage resulting solely from an acquisition of securities by the Company; and
provided further that no Change in Control will be deemed to have occurred if a person
inadvertently acquires an ownership interest of 20% or more but then promptly reduces
that ownership interest below 20%;

ii.During any two consecutive years (not including any
period beginning prior to June 30, 2000), individuals who at the beginning of such
two-year period constitute the Board and any new director (except for a director
designated by a person who has entered into an agreement with the Company to effect a
transaction described elsewhere in this definition of Change in Control) whose election
by the Board or nomination for election by the Company's stockholders was approved by a
vote of at least two-thirds of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for election
was previously so approved (such individuals and any such new director, the
"Incumbent Board") cease for any reason to constitute at least a majority of
the Board;

iii.Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the assets of
the Company (a "Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the individuals and entities
who were the beneficial owners of outstanding voting securities of the Company
immediately prior to such Business Combination beneficially own, directly or indirectly,
more than 50% of the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may be, of the
company resulting from such Business Combination (including, without limitation, a
company which as a result of such transaction owns the Company or all or substantially
all of the Company's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination of the outstanding voting securities of the Company; (ii) no
person (excluding any company resulting from such Business Combination or any employee
benefit plan (or related trust) of the Company or such company resulting from such
Business Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then combined voting power of the then outstanding voting securities
of such company except to the extent that such ownership existed prior to the Business
Combination; and (iii) at least a majority of the members of the board of
directors of the company resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the action
of the Board, providing for such Business Combination;

iv.Approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company; or

v.A tender offer (for which a filing has been made with
the Securities and Exchange Commission "SEC") which purports to comply with
the requirements of Section 14(d) of the Securities Exchange Act of 1934 and the
corresponding SEC rules) is made for the stock of the Company, then the first to occur
of:

(A)Any time during the offer when the person making
the offer owns or has accepted for payment stock of the Company with 25% or more of the
total voting power of the Company's securities, or

(B)Three business days before the offer is to
terminate unless the offer is withdrawn first if the person making the offer could own,
by the terms of the offer plus any shares owned by this person, stock with 50% or more
of total voting power of the Company's securities when the offer terminates.

6.No Mitigation; No Offset.  In the event of any
termination of employment, the Executive shall be under no obligation to seek other
employment and there shall be no offset against amounts due the Executive under this
Agreement on account of any remuneration attributable to any subsequent employment that
he may obtain.

7.Confidential Information.  The Executive agrees that,
during his employment by the Company and at all times thereafter, he shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its subsidiaries or
affiliates, and their respective businesses, which shall have been obtained by the
Executive during the Executive's employment by the Company or during his consultation
with the Company after his termination of employment, and which shall not be or become
public knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement).  Except in the good faith performance of his
duties for the Company, the Executive shall not, without the prior written consent of
the Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company and
those designated by it.

8.Protective Covenants.  For a period of two years
following the termination of Executive's employment for any reason, the Executive shall
not, without the written consent of the Board, directly or indirectly, 

a.engage or be interested in (as owner, partner, stockholder,
employee, director, officer, agent, consultant or otherwise), with or without
compensation, any business which is in direct competition with the Company or of any of
its subsidiaries in providing data, voice or video transport, switching/routing, network
access system and/or voice quality enhancement solutions to service providers or end
users;

b.hire any person who was employed by the Company or any of
its subsidiaries or affiliates (other than persons employed in a clerical or other
non-professional position) within the six-month period preceding the date of such
hiring; or

c.solicit, entice, persuade or induce any person or entity
doing business with the Company and its subsidiaries or affiliates, to terminate such
relationship or to refrain from extending or renewing the same.  

Nothing in subparagraph (a) above, will prohibit the Executive from
acquiring or holding not more than one percent of any class of publicly traded
securities of any such business; provided that such securities entitle the Executive
to no more than one percent of the total outstanding votes entitled to be cast by
security holders of such business in matters on which such security holders are entitled
to vote.

9.Remedies.  The Executive agrees that the restrictions
set forth in Sections 7 and 8 hereof are reasonably and necessary to protect the legal
interests of the Company.  The Executive further agrees that the Company shall be
entitled to injunctive relief in the event of any actual or threatened breach of such
restrictions.

10.Assignability, Binding Nature.  This Agreement shall
be binding upon and inure to the benefit of the Parties and their respective successors,
heirs (in the case of the Executive) and assigns.  No rights or obligations of the
Company under this Agreement may be assigned or transferred by the Company except that
such rights or obligations may be assigned or transferred pursuant to a merger or
consolidation in which the Company is not the continuing entity, or the sale or
liquidation of all or substantially all of the assets of the Company, provided that the
assignee or transferee is the successor to all or substantially all of the assets of
the Company and such assignee or transferee assumes the liabilities, obligations and
duties of the Company, as contained in this Agreement, either contractually or as a
matter of law. The Company further agrees that, in the event of a sale of assets or
liquidation as described in the preceding sentence, it shall take whatever action it
legally can in order to cause such assignee or transferee to expressly assume the
liabilities, obligations and duties of the Company hereunder.  No rights or obligations
of the Executive under this Agreement may be assigned or transferred by the Executive
other than his rights to compensation and benefits, which may be transferred only by
will or operation of law.

11.Amendment.  This Agreement may be amended or canceled
only by mutual agreement of the parties in writing without the consent of any other
person.  So long as the Executive lives, no person, other than the parties hereto,
shall have any rights under or interest in this Agreement or the subject matter hereof
except that in the event of the Executive's Disability so as to render him incapable of
such action, his legal representative may be substituted for purposes of such amendment.

12.Applicable Law.  The provisions of this Agreement
shall be construed in accordance with the internal laws of the State of Illinois,
without regard to the conflict of law provisions of any state.

13.Severability.  The invalidity or unenforceability of
any provision of this Agreement will not affect the validity or enforceability of any
other provision of this Agreement, and this Agreement will be construed as if such
invalid or unenforceable provision were omitted (but only to the extent that such

provision cannot be appropriately reformed or modified).

14.Waiver of Breach.  No waiver by
any party hereto of a breach of any provision of this Agreement by any other party, or
of compliance with any condition or provision of this Agreement to be performed by such
other party, will operate or be construed as a waiver of any subsequent breach by such
other party of any similar or dissimilar provisions and conditions at the same or any
prior or subsequent time.  The failure of any party hereto to take any action by reason
of such breach will not deprive such party of the right to take action at any time
while such breach continues.

15.Notices.  Notices and all other communications
provided for in this Agreement shall be in writing and shall be delivered personally or
sent by registered or certified mail, return receipt requested, postage prepaid, or
prepaid overnight courier to the parties at the addresses set forth below (or such
other addresses as shall be specified by the parties by like notice):

to the Company:

Tellabs, Inc.

4951 Indiana Avenue

Lisle, Illinois 60532-1698

Attention:  President and Chief Executive Officer

or to the Executive:

Michael J. Birck

4951 Indiana Avenue

Lisle, Illinois 60532-1698

Each party, by written notice furnished to the other party, may
modify the applicable delivery address, except that notice of change of address shall
be effective only upon receipt.  Such notices, demands, claims and other communications
shall be deemed given in the case of delivery by overnight service with guaranteed next
day delivery, the next day or the day designated for delivery; or in the case of
certified or registered U.S. mail, five days after deposit in the U.S. mail; provided,
however, that in no event shall any such communications be deemed to be given later
than the date they are actually received.

16.Arbitration of Disputes and Reimbursement of Legal
Costs.  Any controversy or claim arising out of or relating to this Agreement
(or the breach thereof) shall be settled by final, binding and non-appealable
arbitration in Chicago, Illinois by three arbitrators.  Subject to the following
provisions, the arbitration shall be conducted in accordance with the rules of the
American Arbitration Association (the "Association") then in effect.  One of
the arbitrators shall be appointed by the Company, one shall be appointed by the
Executive, and the third shall be appointed by the first two arbitrators.  If the first
two arbitrators cannot agree on the third arbitrator within 30 days of the appointment
of the second arbitrator, then the third arbitrator shall be appointed by the
Association and shall be experienced in the resolution of disputes under employment
agreements for CEOs of major corporations.  Any award entered by the arbitrators shall
be final, binding and nonappealable and judgment may be entered thereon by either party
in accordance with applicable law in any court of competent jurisdiction.  This
arbitration provision shall be specifically enforceable.  The arbitrators shall have no
authority to modify any provision of this Agreement or to award a remedy for a dispute
involving this Agreement other than a benefit specifically provided under or by virtue
of the Agreement.  If the Executive prevails on any material issue which is the subject
of such arbitration or lawsuit, the Company shall be responsible for all of the fees of
the American Arbitration Association and the arbitrators and any expenses relating to
the conduct of the arbitration (including the Company's and the Executive's reasonable
attorneys' fees and expenses).  Otherwise, each party shall be responsible for its own
expenses relating to the conduct of the arbitration (including reasonable attorneys'
fees and expenses) and shall share the fees of the American Arbitration Association
equally.

17.Survivorship.  Upon the expiration or other
termination of this Agreement, the respective rights and obligations of the parties
hereto shall survive such expiration or other termination to the extent necessary to
carry out the intentions of the parties under this Agreement.

18.Entire Agreement.  Except as otherwise noted herein,
this Agreement constitutes the entire agreement between the parties concerning the
subject matter hereof and supersedes all prior and contemporaneous agreements, if any,
between the parties relating to the subject matter hereof.

19.Counterparts.  This Agreement may be executed in
separate counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.

IN WITNESS THEREOF, the Executive has hereunto set his hand, and
the Company has

caused this Agreement to be executed in its name and on its behalf,
and its corporate seal to be hereunto affixed, all as of the day and year first above
written.

EXECUTIVE:

MICHAEL J. BIRCK

COMPANY:

TELLABS, INC., a Delaware corporation

By:  /s Brian J. Jackman

Its:  Executive Vice President

ATTEST:

Secretary

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}]]