PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
KPMG LLP (KPMG), independent auditors, has been selected by the Board of Directors as the accounting firm to audit the accounts and to report on the consolidated
financial statements of Evans & Sutherland for the fiscal year ending December 31, 2004, and the Board of Directors recommends that the shareholders vote for ratification of such
selection. Shareholder ratification of the selection of KPMG as Evans & Sutherland's independent auditors is not required by Evans & Sutherland's bylaws or otherwise. However, the Board
of Directors is submitting the selection of KPMG for shareholder ratification as a matter of good corporate practice. KPMG has audited Evans & Sutherland's consolidated financial statements
since 1968. Notwithstanding the selection, the Board of Directors, in
its discretion, may direct the appointment of a new independent auditor at any time during the year if the Board of Directors feels that such a change would be in the best interests of Evans &
Sutherland and its shareholders.
Neither
KPMG, nor any of its members has any financial interest, direct or indirect, in Evans & Sutherland, nor has KPMG, nor any of its members, ever been connected with
Evans & Sutherland as promoter, underwriter, voting trustee, director, officer, or employee. In the event the shareholders do not ratify such appointment, the Board of Directors will reconsider
its selection. Representatives of KPMG are expected to attend the meeting with the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate
questions.
VOTE REQUIRED
The affirmative vote of a majority of the common shares present at the 2004 annual meeting of shareholders, in person or by proxy, is required for the
ratification of the appointment of KPMG.
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