Sample Business Contracts

Employment Agreement - Birch Telecom Inc. and David M. Hollingsworth

Employment Forms

  • Employment Agreement. Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
  • Consulting Agreement. Answer simple questions to build a contract with a consultant. Specify the services rendered, when payment is due, as well as IP rights.
  • Commission Agreement. Employers who compensate their sales employees based on commissions can prepare an agreement to reduce misunderstandings by specifying the base salary and how commissions are calculated.
  • Executive Employment Agreement. Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
  • Sales Representative Contract. Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
  • More Employment Agreements

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                              EMPLOYMENT AGREEMENT

      THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of February ___,
2000 by BIRCH TELECOM, INC., a Delaware corporation (the "Company"), and DAVID
M. HOLLINGSWORTH, an individual (the "Employee").

      The Company and the Employee desire for the Employee to be employed by the
Company upon the terms and conditions set forth in this Agreement.

      The parties, intending to be legally bound, agree as follows:

1.    Definitions

For the purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1.

      1.1 "Agreement" shall mean this Employment Agreement, as amended from time
to time.

      1.2   "Affiliate" shall mean:

            (a) any partnership, limited liability company, corporation or other
      entity if the Company owns more than 25% of the equity securities or
      interests of such entity; or

            (b) any such entity which owns more than 25% of the equity
      securities of the Company (and, for the purpose of this Section 1.2, any
      options to acquire equity securities shall be treated as having been fully
      exercised, and any securities convertible into equity securities shall be
      treated as having been fully converted).

      1.3   "Benefits" shall mean as defined in Section 3.1(b).

      1.4  "Board of Directors"  shall mean the board of directors of the

      1.5 "Competitive Business" shall mean any business which directly or
indirectly provides any local exchange telecommunications service that is the
same as or substantially similar to any local exchange telecommunications
service provided by the Company.

      1.6   "Cause" shall mean as defined in Section 6.3.

      1.7 "Change in Control" means any of the following: (i) the sale of all or
substantially all of the Company's (or its Affiliates') assets that results in
the liquidation of the Company and the payment of liquidating distributions to
the stockholders of the Company; (ii) the acquisition of the Company by another
entity by means of a merger or consolidation resulting in the exchange of the


outstanding shares of the Company's capital stock for securities or
consideration issued or paid or caused to be issued or paid by the acquiring
entity or its subsidiary; or (iii) the acquisition from one or more of the
stockholders of the Company of more than 50% of the voting stock of the Company
by a single person or group of persons acting together.

      1.8   "Confidential Information" shall mean any and all:

            (a) trade secrets concerning the business and affairs of the
      Company, the Company's product and service specifications, data, formulae,
      compositions, processes, designs, sketches, photographs, maps, engineering
      studies, graphs, drawings, samples, inventions and ideas, past, current,
      and planned research and development, current and planned methods and
      processes, customer and supplier lists, current and anticipated customer
      requirements, price lists, bid information, market studies, business
      plans, computer software and programs (including object code and source
      code), computer software and database technologies, systems, structures,
      and architectures (and related formulae, compositions, processes,
      improvements, devices, inventions, discoveries, concepts, ideas, designs,
      methods and information), and any other information, however documented,
      that is a trade secret within the meaning of the Missouri Uniform Trade
      Secrets Act; and

            (b) information concerning the business and affairs of the Company
      (which includes without limitation, historical financial statements,
      financial projections and budgets, historical and projected sales, capital
      spending budgets and plans, the names and backgrounds of key personnel and
      personnel training techniques and materials), however documented; and

            (c) notes, analysis, compilations, studies, summaries, and other
      material prepared by or for the Company containing or based, in whole or
      in part, on any information included in the foregoing.

      1.9   "Disability" shall mean as defined in Section 6.2.

      1.10 "Employee Invention" shall mean any idea, invention, technique,
modification, process, or improvement (whether patentable or not), any
industrial design (whether registerable or not), any mask work, however fixed or
encoded, that is suitable to be fixed, embedded or programmed in a semiconductor
product (whether recordable or not), and any work of authorship (whether or not
copyright protection may be obtained for it) created, conceived, or developed by
the Employee, either solely or in conjunction with others, during the Employment
Period, or a period that includes a portion of the Employment Period, that
relates in any way to, or is useful in any manner in, the business then being
conducted or proposed to be conducted by the Company, and any such item created
by the Employee, either solely or in conjunction with others, following
termination of the Employee's employment with the Company, that is based upon or
uses Confidential Information.

      1.11 "Employment Period" shall mean the term of the Employee's employment
under this Agreement.


      1.12  "Good Reason" shall mean as defined in Section 6.4.

      1.13 "Person" shall mean any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, or
governmental body.

      1.14 "Post-Employment Period" shall mean the one-year period beginning on
the date of termination of the Employee's employment with the Company.

      1.15  "Proprietary Items" shall mean as defined in Section 7.2(a)(iv).

      1.16  "Salary" shall mean as defined in Section 3.1(a).

      1.17  "Territory" shall mean

            (a)  the states of Missouri and Kansas; and

            (b) any metropolitan areas outside of Missouri and Kansas, if at the
      time the Employee ceases to be employed by the Company (i) the Company or
      any Affiliate is providing a local exchange telecommunications service
      within the metropolitan area, or (ii) a detailed business development plan
      has been prepared, or is in the process of being prepared, by or on behalf
      of the Company, in order to evaluate whether the Company should provide
      local exchange telecommunications services within the metropolitan area
      within twelve months after the date Employee ceases to be employed by the
      Company, and the Board of Directors has not formally resolved against
      providing such services in such metropolitan area.

2.    Employment Terms and Duties

      2.1 Employment. The Company hereby employs the Employee, and the Employee
hereby accepts employment by the Company, upon the terms and conditions set
forth in this Agreement.

      2.2 Term. Subject to the provisions of Section 6, the term of this
Agreement shall be one year. Thereafter, this Agreement shall be renewed
automatically from year to year unless either party shall have given written
notice of termination to the other party at least ninety (90) days prior to the
end of the current term of this Agreement.

      2.3 Duties. The Employee will have such duties as are assigned or
delegated to the Employee by the Board of Directors and President and will serve
asSenior Vice President of the Company. The Employee will devote substantially
all his business time and attention to the business of the Company, will act in
good faith to promote the success of the Company's business, and will cooperate
fully with the Board of Directors and President in the advancement of the best
interests of the Company. Nothing in this Section 2.3, however, will prevent the
Employee from engaging


in additional activities in connection with personal investments and community
affairs that are not inconsistent with the Employee's duties under this
Agreement (which community affairs shall be disclosed to and approved by the
President). If the Employee serves as a director of the Company or as a director
or officer of any of its Affiliates, the Employee will fulfill his duties as
such director or officer without additional compensation.

3.    Compensation

      3.1   Basic Compensation.

            (a) Salary. The Employee will be paid a minimum base annual salary
      of $200,000 (the "Salary"), which will be payable in equal periodic
      installments according to the Company's customary payroll practices, but
      no less frequently than monthly. The Salary may be increased by the
      Compensation Committee or Board of Directors of the Company during the
      term of this Agreement, and when increased, such higher amount shall then
      be the minimum base annual salary under this Agreement. The Salary shall
      not be reduced below the highest minimum base annual salary fixed from
      time to time by the Compensation Committee or Board of Directors of the
      Company without the Employee's written consent. When increased or
      decreased in accordance with the terms of this Agreement, the new minimum
      base annual salary shall be deemed the Employee's "Salary" for all
      purposes of this Agreement.

            (b) Benefits. The Employee will, during the Employment Period, be
      permitted to participate in such pension, profit sharing, bonus, life
      insurance, disability insurance, hospitalization, major medical, and other
      employee benefit plans of the Company that may be in effect from time to
      time, to the extent the Employee is eligible under the terms of such plans
      (collectively, the "Benefits").

3.2 Incentive Compensation. The Employee shall be entitled to participate in an
incentive bonus program established by the Board of Directors or the
Compensation Committee of the Board of Directors to measure and reward
management for the financial performance of the
      Company. The Employee's initial annual targeted incentive compensation
shall be $75,000; provided, however, that the payment of any incentive
compensation shall be at the discretion of the Compensation Committee of the
Board of Directors, which may consider any factors it deems relevant, including
the assessment of the performance of the Employee and the Company during the
relevant time period.

4.    Facilities and Expenses

The Company will furnish the Employee office space, equipment, supplies, and
such other facilities and personnel as the Company deems necessary or
appropriate for the performance of the Employee's duties under this Agreement.
The Company will pay the Employee's dues in such professional societies and
organizations as the President deems appropriate, and will pay on behalf of the
Employee (or reimburse the Employee for) reasonable expenses incurred by the
Employee at


the request of, or on behalf of, the Company in the performance of the
Employee's duties pursuant to this Agreement, and in accordance with the
Company's employment policies, including reasonable expenses incurred by the
Employee in attending conventions, seminars, and other business meetings, in
appropriate business entertainment activities, and for promotional expenses.

5.    Vacations and Holidays

The Employee will be entitled to paid vacation in accordance with the vacation
policies of the Company in effect for its employee officers from time to time.
Vacation must be taken by the Employee at such time or times as approved by the
President. The Employee will also be entitled to the paid holidays set forth in
the Company's policies.

6.    Termination

      6.1 Events of Termination. The Employment Period, the Employee's Salary,
Benefits, and Incentive Compensation, and any and all other rights of the
Employee under this Agreement will terminate (except as otherwise provided in
this Section 6):

            (a)  upon the death of the Employee;

            (b) upon the Disability of the Employee (as defined in Section 6.2)
      immediately upon notice from either party to the other;

            (c) for Cause (as defined in Section 6.3), immediately upon notice
      from the Company to the Employee, or at such later time as such notice may

            (d) for Good Reason (as defined in Section 6.4) upon not less than
      thirty days' prior notice from the Employee to the Company; or

            (e) without Cause upon not less than thirty days' notice from the
      Company to the Employee.

      6.2 Definition of "Disability." For purposes of Section 6.1, the Employee
will be deemed to have a "Disability" if, for physical or mental reasons, the
Employee is unable to perform the Employee's duties under this Agreement for 120
consecutive days, or 180 days during any twelve month period, as determined in
accordance with this Section 6.2. The Disability of the Employee will be
determined by a medical doctor selected by written agreement of the Company and
the Employee upon the request of either party by notice to the other. If the
Company and the Employee cannot agree on the selection of a medical doctor, each
of them will select a medical doctor and the two medical doctors will select a
third medical doctor who will determine whether the Employee has a Disability.
The determination of the medical doctor selected under this Section 6.2 will be
binding on both parties. The Employee must submit to a reasonable number of
examinations by the medical doctor making the determination of Disability under
this Section 6.2, and to other specialists designated by such medical doctor,
and the Employee hereby authorizes the disclosure and release to the Company of
such determination and all supporting medical records. If


the Employee is not legally competent, the Employee's legal guardian or duly
authorized attorney-in-fact will act in the Employee's stead under this Section
6.2 for the purposes of submitting the Employee to the examinations, and
providing the authorization of disclosure, required under this Section 6.2.

      6.3 Definition of "Cause." For purposes of Section 6.1, the term "Cause"
means: (a) the Employee's breach of a material obligation under this Agreement;
(b) the Employee's failure to adhere in any material respect to any written
Company policy if such policy is material to the effective performance by the
Employee of his duties under this Agreement, and if the Employee has been given
a reasonable opportunity to cure his failure to comply within the thirty-day
period preceding termination of this Agreement, provided that if the Employee
cures his failure to comply with such a policy and then fails again to comply
with the same policy, no further opportunity to cure that failure shall be
required; (c) the appropriation (or attempted appropriation) of a material
business opportunity of the Company, including attempting to secure or securing
any personal profit in connection with any transaction entered into on behalf of
the Company (other than through stock options, bonuses and other incentives
provided by the Company to the Employee); (d) the misappropriation (or attempted
misappropriation) of any of the Company's funds or property; or (e) the
conviction of, or the entering of a guilty plea or plea of no contest with
respect to, a felony, or a crime involving moral turpitude, dishonesty, or

      6.4 Definition of "Good Reason." For purposes of Section 6.1, the term
"Good Reason" shall mean (a) a substantial reduction in the Employee's duties or
responsibilities, (b) any reduction in Employee's Salary, or (c) relocation of
the Employee's primary workplace to a location that is greater than 35 miles
from the Employee's current workplace, in each case which is not cured within 30
days following the Company's receipt of written notice from the Employee
describing the event constituting Good Reason.

      6.5 Termination Pay. Effective upon the expiration or termination of this
Agreement, the Company will be obligated to pay the Employee (or, in the event
of his death, his designated beneficiary as defined below) only such
compensation as is provided in this Section 6.5. For purposes of this Section
6.5 the Employee's designated beneficiary will be such individual beneficiary or
trust, located at such address, as the Employee may designate by notice to the
Company from time to time or, if the Employee fails to give notice to the
Company of such a beneficiary, the Employee's estate. Notwithstanding the
preceding sentence, the Company will have no duty, in any circumstances, to
attempt to open an estate on behalf of the Employee, to determine whether any
beneficiary designated by the Employee is alive or to ascertain the address of
any such beneficiary, to determine the existence of any trust, to determine
whether any Person purporting to act as the Employee's personal representative
(or the trustee of a trust established by the Employee) is duly authorized to
act in that capacity, or to locate or attempt to locate any beneficiary,
personal representative, or trustee.

            (a) Termination by the Employee for Good Reason or by the Company
      without Cause. If the Employee terminates this Agreement for Good Reason,
      or if the Company terminates this Agreement other than for Cause (but not
      because of the Disability or death


      of the Employee), or if the Company notifies the Employee in accordance
      with Section 2.2 that this Agreement will not be renewed as of an
      applicable expiration date, the Company will pay the Employee (i) the
      Employee's Salary for the remainder, if any, of the calendar month in
      which such termination is effective and for twelve consecutive calendar
      months thereafter, (ii) the amount of the Employee's targeted incentive
      compensation for the year during which the termination is effective
      (prorated for the period from the beginning of the year until the
      effective date of termination), and (iii) with respect to the
      Post-Employment Period, an additional amount equal to the full amount of
      the Employee's targeted incentive compensation for the year in which the
      termination was effective (such amount to be determined as if the Employee
      had been employed for the entire year and not prorated as described in
      clause (ii) above), payable in equal monthly installments over the
      Post-Employment Period. Notwithstanding the preceding sentence, if the
      Employee obtains other employment prior to the end of the Post-Employment
      Period or any extension thereof, he must promptly give notice thereof to
      the Company, and the payments under this Agreement for any period after
      the Employee obtains other employment will be reduced by the amount of the
      cash compensation received and to be received by the Employee from the
      Employee's other employment for services performed during such period.

            (b) Termination by the Company for Cause. If the Company terminates
      this Agreement for Cause, the Employee will be entitled to receive his
      Salary only through the date such termination is effective.

            (c) Termination upon Disability. If this Agreement is terminated by
      either party as a result of the Employee's Disability, as determined under
      Section 6.2, the Company will pay the Employee his Salary through the
      remainder of the calendar month during which such termination is effective
      and for the lesser of (i) six consecutive months thereafter, or (ii) the
      period until disability insurance benefits commence under any disability
      insurance coverage furnished by the Company to the Employee.

            (d) Termination upon Death. If this Agreement is terminated because
      of the Employee's death, the Employee will be entitled to receive his
      Salary through the end of the calendar month in which his death occurs.

            (e) Benefits. Except as otherwise required by law, the Employee's
      accrual of, or participation in plans providing for, the Benefits will
      cease at the effective date of the termination of this Agreement, and the
      Employee will be entitled to accrued Benefits pursuant to such plans only
      as provided in such plans.

7.    Non-Disclosure Covenant; Employee Inventions

      7.1 Acknowledgments by the Employee. The Employee acknowledges that (a)
during the Employment Period and as a part of his employment, the Employee will
be afforded access to Confidential Information; (b) public disclosure of such
Confidential Information could have an adverse effect on the Company and its
business; (c) because the Employee possesses substantial


technical expertise and skill with respect to the Company's business, the
Company desires to obtain exclusive ownership of each Employee Invention, and
the Company will be at a substantial competitive disadvantage if it fails to
acquire exclusive ownership of each Employee Invention; and (d) the provisions
of this Section 7 are reasonable and necessary to prevent the improper use or
disclosure of Confidential Information and to provide the Company with exclusive
ownership of all Employee Inventions.

      7.2 Agreements of the Employee. In consideration of the compensation and
benefits to be paid or provided to the Employee by the Company under this
Agreement, the Employee covenants as follows:

            (a)  Confidentiality.

                  (i) During and following the Employment Period, the Employee
            will hold in confidence the Confidential Information and will not
            disclose it to any Person except with the specific prior written
            consent of the Company or except as otherwise expressly permitted by
            the terms of this Agreement.

                  (ii) Any trade secrets of the Company will be entitled to all
            of the protections and benefits under the Missouri Uniform Trade
            Secrets Act and any other applicable law. If any information that
            the Company deems to be a trade secret is found by a court of
            competent jurisdiction not to be a trade secret for purposes of this
            Agreement, such information will, nevertheless, be considered
            Confidential Information for purposes of this Agreement. The
            Employee hereby waives any requirement that the Company submit proof
            of the economic value of any trade secret or post a bond or other

                  (iii) None of the foregoing obligations and restrictions
            applies to any part of the Confidential Information that the
            Employee demonstrates was or became generally available to the
            public other than as a result of a disclosure by the Employee or by
            any other Person bound by a confidentiality obligation to the
            Company in respect of such Confidential Information.

                  (iv) The Employee will not remove from the Company's premises
            (except to the extent such removal is for purposes of the
            performance of the Employee's duties at home or while traveling, or
            except as otherwise specifically authorized by the Company) any
            Company document, record, notebook, plan, model, component, device,
            or computer software or code, whether embodied in a disk or in any
            other form (collectively, the "Proprietary Items"). The Employee
            recognizes that, as between the Company and the Employee, all of the
            Proprietary Items, whether or not developed by the Employee, are the
            exclusive property of the Company. Upon termination of this
            Agreement by either party, or upon the request of the Company during
            the Employment Period, the Employee will return to the Company all
            of the Proprietary Items in the Employee's possession or subject to
            the Employee's control,


            and the Employee shall not retain any copies, abstracts, sketches,
            or other physical embodiment of any of the Proprietary Items.

            (b) Employee Inventions. Each Employee Invention will belong
      exclusively to the Company. The Employee acknowledges that all Employee
      Inventions are works made for hire and are the property of the Company,
      including any copyrights, patents, or other intellectual property rights
      pertaining thereto. If it is determined that any such works are not works
      made for hire, the Employee hereby assigns to the Company all of the
      Employee's right, title, and interest, including all rights of copyright,
      patent, and other intellectual property rights, to or in such Employee
      Inventions. The Employee will promptly:

                  (i) disclose to the Company in writing any Employee Invention;

                  (ii) assign to the Company or to a party designated by the
            Company, at the Company's request and without additional
            compensation, all of the Employee's right to the Employee Invention
            for the United States and all foreign jurisdictions;

                  (iii) execute and deliver to the Company such applications,
            assignments, and other documents as the Company may request in order
            to apply for and obtain patents or other registrations with respect
            to any Employee Invention in the United States and any foreign

                  (iv) sign all other papers necessary to carry out the above
            obligations; and

                  (v) give testimony and render any other assistance in support
            of the Company's rights to any Employee Invention.

      Notwithstanding anything to the contrary herein, provisions otherwise
      requiring the Employee to assign to the Company any invention conceived by
      the Employee shall not apply to an invention for which no equipment,
      supplies, facilities or trade secret information of the Company was used
      and which was developed entirely on the Employee's own time, unless the
      invention relates to the business of the Company or to the Company's
      actual or demonstrably anticipated research or development, or the
      invention results from any work performed by the Employee for the Company.

      7.3 Disputes or Controversies. The Employee recognizes that should a
dispute or controversy arising from or relating to this Agreement be submitted
for adjudication to any court, arbitration panel, or other third party, the
preservation of the secrecy of Confidential Information may be jeopardized. All
pleadings, documents, testimony, and records relating to any such adjudication
will be maintained in secrecy and will be available for inspection by the
Company, the Employee, and their respective attorneys and experts, who will
agree, in advance and in writing, to receive and maintain all such information
in secrecy, except as may be limited by them in writing.

8.    Non-Competition and Non-Interference


      8.1 Acknowledgments by the Employee. The Employee acknowledges that: (a)
the services to be performed by him under this Agreement are of a special,
unique, unusual, extraordinary, and intellectual character; (b) the Company
competes with other businesses that are or could be located in any part of the
Territory; and (c) the provisions of this Section 8 are reasonable and necessary
to protect the Company's business.

      8.2 Covenants of the Employee. In consideration of the acknowledgments by
the Employee, and in consideration of the compensation and benefits to be paid
or provided to the Employee by the Company, the Employee covenants that he will
not, directly or indirectly:

            (a) during the Employment Period, except in the course of his
      employment hereunder, and during the Post-Employment Period, engage or
      invest in, own, manage, operate, finance, control, or participate in the
      ownership, management, operation, financing, or control of, be employed
      by, associated with, or in any manner connected with, lend the Employee's
      name or any similar name to, lend Employee's credit to or render services
      or advice to, any Competitive Business within the Territory; provided,
      however, that the Employee may purchase or otherwise acquire up to (but
      not more than) one percent of any class of securities of any enterprise
      (but without otherwise participating in the activities of such enterprise)
      if such securities are listed on any national or regional securities
      exchange or have been registered under Section 12(g) of the Securities
      Exchange Act of 1934;

            (b) whether for the Employee's own account or for the account of any
      other Person, at any time during the Employment Period and the
      Post-Employment Period, solicit business of the same or similar type being
      carried on by the Company, from any Person known by the Employee to be a
      customer of the Company, whether or not the Employee had personal contact
      with such Person during and by reason of the Employee's employment with
      the Company;

            (c) whether for the Employee's own account or the account of any
      other Person at any time during the Employment Period and the
      Post-Employment Period, solicit, employ, or otherwise engage as an
      employee, independent contractor, or otherwise, any person who is or was
      an employee of the Company at any time during the Employment Period or in
      any manner induce or attempt to induce any employee of the Company to
      terminate his or her employment with the Company; or at any time during
      the Employment Period and the Post-Employment Period, interfere with the
      Company's relationship with any person, including any person who at any
      time during the Employment Period was an employee, contractor, supplier,
      or customer of the Company;

            (d) at any time during the Employment Period and the Post-Employment
      Period, disparage the Company or any of its shareholders, directors,
      officers, employees, or agents.

      8.3 Divisible Covenants. If any covenant in Section 8.2 is held to be
unreasonable, arbitrary, or against public policy, such covenant will be
considered to be divisible with respect to scope, time, and geographic area, and
such lesser scope, time, or geographic area, or all of them, as


a court of competent jurisdiction may determine to be reasonable, not arbitrary,
and not against public policy, will be effective, binding, and enforceable
against the Employee.

      8.4 Extension of Covenants. The period of time applicable to any covenant
in Section 8.2 will be extended by the duration of any violation by the Employee
of such covenant.

      8.5 Notices. The Employee will, while the covenants under Section 8.2 are
in effect, give notice to the Company, within ten days after accepting any other
employment, of the identity of the Employee's new employer. The Company may
notify such new employer that the Employee is bound by this Agreement and, at
the Company's election, furnish such new employer with a copy of this Agreement
or relevant portions thereof.

9.    General Provisions

      9.1 Injunctive Relief and Additional Remedy. The Employee acknowledges
that the injury that would be suffered by the Company as a result of a breach of
the provisions of this Agreement (including any provision of Sections 7 and 8)
would be irreparable and that an award of monetary damages to the Company for
such a breach would be an inadequate remedy. Consequently, the Company will have
the right, in addition to any other rights it may have, to obtain injunctive
relief to restrain any breach or threatened breach or otherwise to specifically
enforce any provision of this Agreement, and the Company will not be obligated
to post bond or other security in seeking such relief. Without limiting the
Company's rights under this Section 9 or any other remedies of the Company, if
the Employee breaches any of the provisions of Section 7 or 8, the Company will
have the right to cease making any payments otherwise due to the Employee under
this Agreement.

      9.2 Covenants of Sections 7 and 8 are Essential and Independent Covenants.
The covenants by the Employee in Sections 7 and 8 are essential elements of this
Agreement, and without the Employee's agreement to comply with such covenants,
the Company would not have entered into this Agreement or employed the Employee.
The Company and the Employee have independently consulted their respective
counsel and have been advised in all respects concerning the reasonableness and
propriety of such covenants, with specific regard to the nature of the business
conducted by the Company. The Employee's covenants in Sections 7 and 8 are
independent covenants and the existence of any claim by the Employee against the
Company, under this Agreement or otherwise, will not excuse the Employee's
breach of any covenant in Section 7 or 8. If the Employee's employment hereunder
expires or is terminated, this Agreement will continue in full force and effect
as is necessary or appropriate to enforce the covenants and agreements of the
Employee in Sections 7 and 8.

      9.3 Representations and Warranties by the Employee. The Employee
represents and warrants to the Company that the execution and delivery by the
Employee of this Agreement do not, and the performance by the Employee of the
Employee's obligations hereunder will not, with or without the giving of notice
or the passage of time, or both: (a) violate any judgment, writ, injunction, or
order of any court, arbitrator, or governmental agency applicable to the
Employee; or (b) conflict with, result in the breach of any provisions of or the
termination of, or constitute a


default under, any agreement to which the Employee is a party or by which the
Employee is or may be bound.

      9.4 Obligations Contingent on Performance. The obligations of the Company
hereunder, including its obligation to pay the compensation provided for herein,
are contingent upon the Employee's performance of the Employee's obligations

      9.5 Waiver. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by either
party in exercising any right, power, or privilege under this Agreement will
operate as a waiver of such right, power, or privilege, and no single or partial
exercise of any such right, power, or privilege will preclude any other or
further exercise of such right, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted by applicable law,
(a) no claim or right arising out of this Agreement can be discharged by one
party, in whole or in part, by a waiver or renunciation of the claim or right
unless in writing signed by the other party; (b) no waiver that may be given by
a party will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one party will be deemed to be a waiver
of any obligation of such party or of the right of the party giving such notice
or demand to take further action without notice or demand as provided in this

      9.6 Binding Effect; Delegation of Duties Prohibited. This Agreement shall
inure to the benefit of, and shall be binding upon, the parties hereto and their
respective successors, assigns, heirs, and legal representatives, including any
entity with which the Company may merge or consolidate or to which all or
substantially all of its assets may be transferred. The duties and covenants of
the Employee under this Agreement, being personal, may not be delegated.

      9.7 Notices. All notices and other communications under this Agreement
must be in writing and will be deemed to have been duly given when (a) delivered
by hand (with written confirmation of receipt), (b) sent by facsimile (with
written confirmation of receipt), provided that a copy is mailed by registered
mail, return receipt requested, or (c) when received by the addressee, if sent
by a nationally recognized overnight delivery service (receipt requested), in
the case of the Company to the attention of the President at the Company's
principal business office and in the case of the Employee to the address or
facsimile number set forth below (or to such other address or facsimile number
as the Employee may designate by notice to the Company):

                        2524 NW Bliss Road
                        Vancouver, WA 98685

      9.8 Entire Agreement; Amendments. This Agreement contains the entire
agreement between the parties with respect to its subject matter and supersedes
all prior agreements and understandings, oral or written, between the parties
with respect to its subject matter. This Agreement may not be amended orally,
but only by an agreement in writing signed by each of the parties to this


      9.9 Governing Law. This Agreement will be governed by the laws of the
State of Missouri without regard to conflicts of laws principles.

      9.10 Jurisdiction. Any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, this Agreement may be
brought against either of the parties in the courts of the State of Missouri,
County of Jackson, or, if it has or can acquire jurisdiction, in the United
States District Court for the Western District of Missouri, and each of the
parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on either party anywhere in the world.

      9.11 Section Headings, Construction. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement unless otherwise specified.
All words used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly provided, the
word "including" does not limit the preceding words or terms.

      9.12 Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.

      9.13 Counterparts; Execution by Facsimile Signatures. This Agreement may
be executed in one or more counterparts, each of which will be deemed to be an
original copy of this Agreement and all of which, when taken together, will be
deemed to constitute one and the same agreement. This Agreement may be executed
by facsimile signatures.


      IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date above first written above.

                               BIRCH TELECOM, INC.

                                  David E. Scott, President

                                  David M. Hollingsworth