Sample Business Contracts

Employment Agreement - Birch Telecom Inc. and Stephen L. Sauder

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

Sponsored Links

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of February
10, 1998 by BIRCH TELECOM, INC., a Delaware corporation (the "Company"), and
STEPHEN L. SAUDER, 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:


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)

<PAGE>   2
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

         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 Kansas 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

<PAGE>   3
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 three-year period
beginning on the date of termination of the Employee's employment with the

         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.


         2.1 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

<PAGE>   4
Employee by the Board of Directors and President and will serve as the 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.



              (a) SALARY. The Employee will be paid an annual salary of $213,000
         (the "Salary"), which will be payable in equal periodic installments
         according to the Company's customary payroll practices, but no less
         frequently than monthly.

              (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
to measure and reward management for the financial performance of the Company.


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.


<PAGE>   5
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.


         6.1 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 specify;

              (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.

<PAGE>   6
         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" means any of the following: (a) the Company's breach of a material
obligation under this Agreement; (b) the assignment of the Employee without his
consent to a position, responsibilities, or duties of a materially lesser status
or degree of responsibility than his position, responsibilities, or duties at
the Effective Date; or (c) the mandatory relocation of the Employee outside the
Emporia, Kansas area without the consent of the Employee.

         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.

         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 the Employee's Salary for the
         remainder, if any, of the calendar month in which such termination is
         effective and for twelve consecutive

<PAGE>   7
         calendar months thereafter. Notwithstanding the preceding sentence, if
         the Employee obtains other employment prior to the end of the twelve
         months following the month in which the termination or expiration is
         effective, he must promptly give notice thereof to the Company, and the
         Salary 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

              (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.


         7.1 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:

<PAGE>   8
              (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
                  Kansas 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 security.

                           (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

<PAGE>   9

                           (i) disclose to the Company in writing any Employee

                           (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

                           (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 jurisdictions;

                           (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.

         The Employee's attention is specifically directed to the immediately
         preceding paragraph, which constitutes the notice required by K.S.A.
         Section 44-130.

         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.


         8.1 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

<PAGE>   10
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

<PAGE>   11
against public policy, will be effective, binding, and enforceable against the

         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.


         9.1 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.

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.

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

<PAGE>   12
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 hereunder.

         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

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

         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):

                                    2541 West View Drive
                                    Emporia, KS  66801

         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

<PAGE>   13
         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.

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.

                                    By: /s/ David E. Scott
                                            David E. Scott, President

<PAGE>   14
                                     /s/ Stephen L. Sauder
                                     Stephen L. Sauder