EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
effective as of the 22nd day of December, 2000, by and between EVANS &
SUTHERLAND COMPUTER CORPORATION, a Utah corporation (the "Company") and WILLIAM
M. THOMAS (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
(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.
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(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.
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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).
(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
(iv) Breach or violation of any material provision of this
Agreement by the Company;
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(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.
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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 Chief Financial Officer 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.
(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.
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(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
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).
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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.
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.
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(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 two (2.0) times the Executive's Gross Income. The Company will pay
the full medical, dental and vision premiums for continuation coverage
under COBRA and, after expiration of the COBRA continuation period, for
conversion coverage for the Executive and dependents who qualify for
continuation coverage under COBRA for two (2) 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 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
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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 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(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 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.
(f) 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.
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:
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(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
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;
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(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, 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.
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(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 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.
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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.
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.
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(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.
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.
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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: William M. Thomas
600 Komas Drive
Salt Lake City, Utah 84108
Fax: (801) 588-4500
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.
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.
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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:___________________________________
James R. Oyler, President and CEO
"EXECUTIVE"
--------------------------------------
William M. Thomas
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