<PAGE>   1
                                                                 EXHIBIT 10.1.13



                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (this "Agreement") is made effective as of June
7, 1999 (the "Effective Date") at Akron, Ohio between TELXON CORPORATION
("Employer"), a Delaware corporation with offices at 3330 West Market Street,
Akron, Ohio 44333, and DAVID H. BIGGS ("Key Employee").

                                   WITNESSETH:

     WHEREAS, Key Employee agreed to enter into Employer's service as Vice
President and Chief Technology Officer based on the inducement provided him at
the assurance of Employer's management that his services would be compensated in
the form of 35,000 shares of Employer's Common Stock (the "Shares");

     WHEREAS, Key Employee, as an accommodation to the needs of Employer with
respect to his services, began working for Employer pending the finalization of
the terms under which he would become entitled to the Shares and which would
otherwise govern his services.

     NOW, THEREFORE, in consideration of the foregoing and in consideration of
the mutual promises and agreements contained herein, the parties hereto agree as
follows:

       1.     EMPLOYMENT PERIOD. Employer agrees to employ Key Employee, and Key
              Employee agrees to be so employed, on the terms and conditions set
              forth herein for the period beginning on the Effective Date and
              ending August 6, 2000 (the "Ending Date"), subject to the earlier
              termination of such employment by Employer or Key Employee
              pursuant to Section 6 (the "Employment Period").

       2.     NATURE OF DUTIES.

              a.  Key Employee's duties and responsibilities shall be to serve
                  as Vice President and Chief Technology Officer of Employer (or
                  in such other capacity as Employer's chief executive officer
                  (the "Chief Executive Officer"), or such other officer of
                  Employer as the Chief Executive Officer shall direct (the
                  Chief Executive Officer or such other officer being Key
                  Employee's "Supervisor"), may at any time and from time to
                  time in his discretion direct) in conformity with management
                  policies, guidelines and directions issued by Employer. Key
                  Employee shall report directly to the Supervisor, and shall
                  have general charge and supervision of those functions and
                  such other responsibilities as the Supervisor shall from time
                  to time determine in his discretion.

              b.  Key Employee shall work exclusively for Employer on a
                  full-time basis in such capacity as he is to serve pursuant to
                  Section 2(a), devoting all of his time and attention during
                  normal business hours to Employer's business; provided that
                  Key Employee shall be free to honor his commitments for
                  speaking engagements extant as of the Effective Date and his
                  obligations to meet with and otherwise serve on the boards of
                  directors of which he was a member as of the Effective Date
                  ("Prior Commitments").

<PAGE>   2


              c.  Key Employee shall perform his duties and responsibilities
                  hereunder diligently, faithfully and loyally in order to cause
                  the proper, efficient and successful operation of Employer's
                  business.

       3.     COMPENSATION AND BENEFITS.

              a.  Compensation. As full compensation for Key Employee's
                  services, in lieu of any cash salary and bonus and of
                  participation in any of the preexisting stock-based
                  compensation plans in which Employer employees may have
                  opportunity to participate, Employer agrees to pay and issue
                  to Key Employee, and Key Employee agrees to accept from
                  Employer, the Shares (sometimes also referred to as the
                  "Compensation"), subject to the terms and conditions set forth
                  in this Agreement. In exchange for the performance of services
                  described in Section 2, such Compensation shall be earned
                  according to the schedule in Section 3(a)(i) below. Of the
                  total 35,000 Shares issuable to Key Employee, 23,200 Shares,
                  representing all of the shares currently available for grant
                  under Employer's 1992 Restricted Stock Plan, as amended (the
                  "Plan"), will, when earned, be issued to Key Employee pursuant
                  to that Plan, and the remaining 11,800 Shares will, when
                  earned, be issued to Key Employee outside the Plan (the
                  "Non-Plan Shares"). The Non-Plan Shares shall be subject to
                  the dividend and voting rights provisions of Plan Section
                  6.03, as the same may be implemented by the terms of the award
                  agreement between Employer and Employee with respect to the
                  Plan Shares, and the adjustment provisions of Plan Section 7
                  with the same force and effect as if such shares had been
                  awarded thereunder. Such voting provisions, but not the
                  dividend provisions, shall continue to apply to the Shares to
                  the extent that Key Employee elects under Section 4(a) below
                  to defer payment of the Compensation represented thereby and
                  for so long as the same continue to be subject to such
                  deferral. Employer and Key Employee acknowledge and agree that
                  the issuance of such Shares to Key Employee is an inducement
                  essential to Key Employee's entering into the employ of
                  Employer as provided in this Agreement and is subject to the
                  approval thereof by Employer's Board of Director or an
                  appropriate committee thereof.

                  i.  Employer and Key Employee acknowledge and agree that
                      Compensation shall be earned and payable to the Key
                      Employee in accordance with the following schedule. Except
                      as otherwise provided below, in the event that Key
                      Employee's employment under this Agreement is terminated
                      and such termination becomes effective prior to the time
                      specified in section 3(a)(iii) on the applicable Vesting
                      Date indicated below, Key Employee will forfeit his rights
                      to any and all then nonvested Compensation. The period
                      during which the respective portions of the Shares are
                      subject to forfeiture shall constitute the "Restricted
                      Period" with respect to those Shares.

<TABLE>
<CAPTION>
                                                               NUMBER OF
                       VESTING DATE         ISSUED UNDER       SHARES
                       ------------         ------------       ---------
<S>                    <C>                   <C>              <C>
                       January 2, 2000        Non-Plan         11,800
                                                  Plan          5,700

                       March 31, 2000             Plan          7,500

                       August 6, 2000             Plan         10,000
</TABLE>
<PAGE>   3


                  ii. During the applicable Restricted Period, that portion of
                      the Shares may not be sold, assigned, exchanged,
                      transferred, pledged, hypothecated or otherwise disposed
                      of or encumbered.

                 iii. Provided that Key Employee's employment is not terminated
                      prior to 5:00 p.m. The Woodlands, Texas time on a Vesting
                      Date, the Key Employee shall vest in the Compensation in
                      accordance with the schedule set forth in Section 3(a)(i).

                  iv. Notwithstanding the vesting schedule set forth in Section
                      3(a)(i), in the event of a "Change in Control", as defined
                      in Section 4(c)(ii), Key Employee shall immediately become
                      fully vested in any nonvested Compensation.

                  v.  Notwithstanding the vesting schedule set forth in Section
                      3(a)(i), in the event Key Employee's employment is
                      terminated by reason of death pursuant to Section 6(a) or
                      permanent disability pursuant to Section 6(b), Key
                      Employee shall become vested in the amount of Compensation
                      earned from the last Vesting Date, determined by
                      multiplying the Compensation scheduled to be paid on the
                      next Vesting Date by the ratio of the number of days
                      elapsed from the preceding Vesting Date (or in the absence
                      thereof, the Effective Date) through his date of
                      termination over the total number of days from the most
                      recent Vesting Date (or in the absence thereof, the
                      Effective Date) through the next following Vesting Date
                      (any fractional Share resulting from such multiplication
                      being rounded up to the next whole Share). Whether the Key
                      Employee's termination of employment is due to permanent
                      disability shall be determined by the Employer in good
                      faith.

                  vi. Notwithstanding the vesting schedule set forth in Section
                      3(a)(i), in the event Key Employee's employment is
                      terminated other than (1) by reason of death or permanent
                      disability or (2) by Employer for "cause" (as defined in
                      Section 6(c)), Key Employee shall become vested in any
                      nonvested Compensation in accordance with the Vesting
                      Dates set forth in Section 3(a)(i), provided such
                      nonvested Compensation has not been forfeited pursuant to
                      Section 8(b).

              b.  Expenses. Employer shall reimburse Key Employee for all
                  reasonable out-of-pocket expenses incurred by Key Employee on
                  Employer's behalf during the Employment Period and approved by
                  the Supervisor or such other officer as the Supervisor or
                  applicable Employer policies shall direct.

              c.  Vacation. During the Employment Period, Key Employee shall
                  be entitled to four weeks vacation. Time required for
                  fulfilling Prior Commitments will not be counted toward such
                  vacation.

              d.  Health, Disability, Retirement and Death Benefits. Employer
                  shall provide Key Employee with the same health, disability,
                  retirement and death and other fringe benefits as are
                  generally provided to the executive employees of Employer in
                  accordance with such terms, conditions and eligibility
                  requirements as may from time to time be established by
                  Employer.

              e.  Living Expenses. To facilitate Employee's service to Employer
                  under this Agreement, Employer agrees, in respect of the
                  Employment Period, to pay directly, or reimburse

<PAGE>   4

                  Employee, or provide Employee with an agreed upon allowance
                  (subject to reconciliation and reasonable adjustment), for
                  the following (collectively, "Living Expenses"):

                  i.   housing at 10600 Six Pines Drive, Apt. 1324, The
                       Woodlands, Texas or comparable accommodations in
                       reasonable proximity to Employer's World Technology
                       Center in The Woodlands, Texas (the "World Technology
                       Center"),

                  ii.  fares for regularly scheduled airline transportation
                       between (1) Employer's World Technology Center and (2)
                       Employee's Gardnerville, Nevada family residence or
                       other extended family locations in contiguous States,

                 iii.  a mutually acceptable leased or rental automobile for
                       Employee's use while working out of Employer's World
                       Technology Center,

                  iv.  a "gross-up" for all income and employment taxes
                       incurred or required to be withheld with respect to
                       Employee by reason of Employer's provision or
                       reimbursement of Living Expenses under this Section
                       3(e).

       4.     DEFERRED COMPENSATION PLAN.

              a.   Election. On or before December 10, 1999, Key Employee may
                   elect to defer the payment of all or any lesser number of
                   whole Shares of the Compensation otherwise payable under
                   Section 3(a). Once an election is made under this Subsection
                   (a), Key Employee may not amend or revoke such election. All
                   amounts which Key Employee so elects to defer shall continue
                   to be subject to the vesting and forfeiture provisions of
                   Section 3(a).

              b.   Deferred Compensation Account. The amount of Compensation
                   elected to be deferred under Section 4(a) shall constitute
                   Key Employee's "Deferred Compensation Account". Key
                   Employee's Deferred Compensation Account shall be adjusted
                   to reflect the payment of any distribution of any kind,
                   including but not limited to, a cash dividend, stock
                   dividend, stock split, combination of shares,
                   recapitalization or other change in the capital structure
                   with respect to the common stock of the Employer. Employer
                   shall maintain or cause to be maintained appropriate records
                   of the Deferred Compensation Account.

              c.   Events Triggering Distribution. Key Employee shall receive a
                   distribution(s) from his Deferred Compensation Account upon
                   the earliest to occur of any of the following "triggering
                   events":

                   i.   Death or Disability. The death of Key Employee or the
                        termination of his employment by reason of permanent
                        disability. Whether Key Employee's termination of
                        employment is due to permanent disability shall be
                        determined by Employer in good faith.

                  ii.   "Change in Control". A change in the control or
                        ownership of Employer, which shall mean (a) any
                        "person," as such term is used in Sections 13(d) and
                        14(d) of the Securities Exchange Act of 1934 (the
                        "Exchange Act") or any comparable successor provisions
                        (other than Employer, any business association in an
                        unbroken chain of such associations beginning with
                        Employer if each of the association other than the last
                        association in the unbroken chain owns equity interests
                        possessing fifty percent (50%)

<PAGE>   5


                        or more of the total combined voting power of all
                        classes of equity interests in one of the other
                        associations in such chain, or an employee benefit plan
                        of any of the foregoing, including any trustee of such a
                        plan acting as trustee) becomes the "beneficial owner"
                        (as defined in Rule 13d-3 promulgated under the Exchange
                        Act, as adopted and amended from time to time and as
                        interpreted by formal or informal opinions of, and
                        releases published or other interpretive advice provided
                        by, the staff of the Securities and Exchange
                        Commission), directly or indirectly, of Employer
                        securities representing fifty percent (50%) or more of
                        the combined voting power of Employer's then outstanding
                        voting securities; (b) the consummation of a transaction
                        requiring stockholder approval and involving the sale of
                        all or substantially all of Employer's assets or the
                        merger or consolidation of Employer with or into another
                        corporation; or (c) John W. Paxton, Sr. ceasing for any
                        reason to be the chief executive officer of Employer.

                  iii.  Significant Increase in Share Price. The attainment by
                        Employer's common stock of a closing sale price, as
                        reported on The Nasdaq National Market Tier of The
                        Nasdaq Stock Market (or other securities market or
                        exchange on which Employer's Common Stock is then
                        traded) for any trading day on or after the Vesting Date
                        for the particular portion of the Shares, equal to or
                        greater than the price per share specified in the
                        schedule below:

<TABLE>
<CAPTION>

                                           SPECIFIED PRICE        AMOUNT TO
                        VESTING DATE          PER SHARE        BE DISTRIBUTED
                        ------------       ---------------     --------------
<S>                     <C>                   <C>           <C>
                        January 2, 2000       $20.00        Vested Deferred
                                                            Compensation Account

                        March 31, 2000        $20.00        Vested Deferred
                                                            Compensation Account

                        August 6, 2000        $25.00        Vested Deferred
                                                            Compensation Account
</TABLE>

                        For purposes of this Subsection (iii), "Vested Deferred
                        Compensation Account" shall mean the portion, and only
                        that portion, of the Deferred Compensation Account which
                        has vested as of the applicable Vesting Date as
                        determined in accordance with Section 3(a).

                  iv.   Following Second Anniversary of Vesting Date. The second
                        (2nd) anniversary of each Vesting Date, but only with
                        respect to the portion of the Deferred Compensation
                        Account vesting on such Vesting Date.

            d.    Method of Distribution. Except as the application of other
                  provisions of this Agreement may otherwise permit or require,
                  upon the occurrence of a triggering event, a distribution
                  shall be made to Key Employee , payable as soon as
                  administratively feasible (but in all events within thirty
                  (30) days after the occurrence of the triggering event, of
                  all, and not less than all, of the Deferred Compensation
                  Account or portion thereof to which such triggering event
                  relates.

            e.    Contributions to "Rabbi" Trust. Employer may establish a trust
                  with respect to the Deferred Compensation Account which is
                  intended to be a grantor trust, within the meaning of Section
                  671 of the Internal Revenue Code, of which the Employer is the

<PAGE>   6

                  grantor (the "Trust"). Notwithstanding any other provision of
                  this Agreement, the funds of the Trust will remain the
                  property of the Employer and will be subject to the claims of
                  its creditors in the event of its bankruptcy or insolvency.
                  Neither Key Employee nor any person claiming through Key
                  Employee will have any priority claim on the funds of the
                  Trust, or any security interest or other right, superior to
                  the rights of a general creditor of Employer.

            f.    Designation of Beneficiary. Key Employee may designate a
                  beneficiary (or beneficiaries) who shall be entitled to
                  receive that portion of Key Employee's vested undistributed
                  Deferred Compensation Account. Key Employee may change or
                  revoke a beneficiary designation by notifying Employer in
                  writing. The consent of Key Employee's current beneficiary is
                  not required for a change of beneficiary, and no beneficiary
                  shall have any rights under this Agreement (or, if established
                  pursuant to Section 4(e), the Trust) except as are provided by
                  the terms hereof (or thereof). The rights of a beneficiary who
                  predeceases Key Employee immediately terminate, unless Key
                  Employee specifies to the contrary in writing. If Key Employee
                  fails to designate a beneficiary, Employer (or, if
                  established, the Trust) shall pay the vested undistributed
                  amount of the Deferred Compensation Account to Key Employee's
                  surviving spouse, or to Key Employee's estate in the absence
                  of a surviving spouse.

      5.    ISSUANCE OF SHARES.

            a.    Key Employee makes the following representations, warranties,
                  acknowledgements and agreements to Employer with respect to
                  the issuance of the Shares to him:

                  i.    Key Employee understands that the Non-Plan Shares have
                        not been registered, and that Employer is under no
                        obligation to register, and has not made any assurances
                        to Employee regarding the registration of, the Non-Plan
                        Shares, under the Securities Act of 1933, as amended
                        (the "Securities Act"), or any state securities laws;

                  ii.   The Shares are being offered and sold pursuant to
                        exemptions from registration contained in the Securities
                        Act and applicable state securities laws based in part
                        upon Key Employee's representations contained in this
                        Section 5(a);

                  iii.  Key Employee has had the opportunity to his satisfaction
                        to ask question of and receive answers from Employer's
                        management regarding the business, assets, financial
                        condition, prospects and affairs of Employer;

                  iv.   Key Employee is an "accredited investor" (as such term
                        is defined in Rule 501 under the Securities Act) and has
                        such knowledge and experience in financial and business
                        matters that he is capable of evaluating the merits and
                        risks of his investment in the Shares and of protecting
                        his interests in connection with such investment;

                  v.    Key Employee is not aware of the publication of any
                        advertisement in connection with the transactions
                        contemplated by Section 3(a)(i);

                  vi.   Key Employee is acquiring the Shares for his own account
                        for investment only, and not with a view toward their
                        distribution, can bear a total loss of the investment

<PAGE>   7

                        without materially impairing his financial condition,
                        and can bear the economic risk of the investment
                        indefinitely; and

                  vii.  Key Employee understands that he cannot resell the
                        Non-Plan Shares unless and until the Non-Plan Shares are
                        registered under the Securities Act and/or applicable
                        state securities laws or an exemption from such
                        registration is available and that the certificate
                        evidencing the Non-Plan Shares will be legended
                        regarding the absence of and necessity for such
                        registration and that there is no assurance that any
                        registration exemption will be available or that, if
                        available, such exemption will allow Key Employee to
                        transfer all or any portion of the Non-Plan Shares he
                        may subsequently desire to transfer.

            b.    By the initial Vesting Date, Employer will cause one or more
                  stock certificates to be issued in the name of Key Employee
                  (or if a Trust is established pursuant to Section 4(e), the
                  trustee thereunder (the "Trustee")) as registered owner. Each
                  such certificate shall bear legends in substantially the
                  following form (appropriately revised in the case of Shares
                  registered in the name of the Trustee):

                  i.    Each certificate representing all of any portion of the
                        Non-Plan Shares shall bear the following legends:

                           "Transferability of this Certificate and the shares
                           of Common Stock represented hereby are subject to the
                           terms and conditions (including forfeiture) of an
                           employment agreement, effective as of June 7, 1999,
                           entered into by the registered owner with Telxon
                           Corporation. Copies of such agreement are on file at
                           the offices of Telxon Corporation, 3330 West Market
                           Street, Akron, Ohio 44333. The Restricted Period
                           during which these shares are subject to certain
                           vesting conditions and transfer restrictions under
                           such agreement expires January 2, 2000.

                           The Shares of Common Stock represented by this
                           Certificate have not been registered under the
                           Securities Act of 1933 and may not be sold, assigned,
                           transferred, pledged or hypothecated unless (A) the
                           same shall first have been registered or received
                           such other regulatory approval or been described in
                           any such regulatory filing as may be required under
                           applicable law or (B) the issuer shall have received
                           an opinion of counsel that an exemption from such
                           registration or other regulatory requirement is
                           available with respect to such transaction."

                  ii.   Each certificate representing all or any portion of the
                        Plan Shares shall bear the following legends:

                           "Transferability of this Certificate and the shares
                           of Common Stock represented hereby are subject to the
                           terms and conditions (including forfeiture) of the
                           Telxon Corporation 1992 Restricted Stock Plan and of
                           a Restricted Stock Award Agreement, Grant Number 059,
                           entered into between the registered owner and Telxon
                           Corporation. Copies of such Plan and Agreement are on
                           file at the offices of Telxon Corporation, 3330 West
                           Market Street, Akron, Ohio 44333. The Restricted
                           Period during

<PAGE>   8

                           which these shares are subject to certain vesting
                           conditions and transfer restrictions under the Plan
                           and Award Agreement expires [INSERT APPLICABLE
                           VESTING DATE].

                           The Shares of Common Stock represented by this
                           Certificate have been registered under the Securities
                           Act of 1933 but, for so long as the registered owner
                           shall be an "affiliate" of the issuer within the
                           meaning of Rule 144 (or any successor provision)
                           promulgated under such Act, may not be sold,
                           assigned, transferred, pledged or hypothecated unless
                           (A) the same shall first have been registered or
                           received such other regulatory approval or been
                           described in any such regulatory filing as may be
                           required under applicable law or (B) the issuer shall
                           have received an opinion of counsel that an exemption
                           from such registration or other regulatory
                           requirement is available with respect to such
                           transaction."

                  iii.  Each certificate evidencing the Shares registered in the
                        name of Key Employee shall, pending the occurrence of
                        the applicable Vesting Date, be deposited with Employer,
                        together with such stock powers in blank as may be
                        requested of Key Employee by Employer at any time prior
                        to the applicable Vesting Date (which Key Employee
                        agrees to execute and deliver upon such request). In the
                        event of any forfeiture of Shares due to the termination
                        of Key Employee's employment prior to the applicable
                        Vesting Date, and if required in order to effect the
                        cancellation of any such forfeited Shares, the stock
                        powers so delivered by Key Employee may be used in
                        processing the same. The Trust shall similarly provide
                        for the surrender of any forfeited Shares by the Trustee
                        to Employer for cancellation.

                  iv.   Upon the vesting of the Shares evidenced by a stock
                        certificate, the restrictions imposed by Section
                        3(a)(ii) shall lapse with respect to those Shares, the
                        legends which are no longer applicable shall, upon Key
                        Employee's request, be removed from the certificate(s)
                        representing such Shares, and Employer shall deliver, or
                        shall cause its stock transfer agent to deliver, to Key
                        Employee (in the case of certificates issued to the
                        Trustee, upon receipt thereof by Employer or its stock
                        transfer agent from the Trustee) replacement
                        certificate(s) for such Shares, together with any stock
                        power relating to the replaced certificate(s) (unless
                        required to be used in processing the issuance of the
                        replacement certificate(s)).

            c.    Notwithstanding anything to the contrary in this Agreement or
                  any other agreement relating to the Deferred Compensation
                  Account, the Trust or otherwise to the subject matter hereof,
                  Key Employee shall not be entitled to receive delivery of any
                  particular of the Shares, and neither Employer nor, in the
                  case of any Shares deposited into the Trust, the Trustee, is
                  obligated to effect or cause the same, unless and until Key
                  Employee pays, or makes arrangements reasonably acceptable to
                  Employer for the payment of, all taxes which Employer may be
                  obligated to withhold with respect to such Shares

     6.     TERMINATION.

            a.    Key Employee's employment shall terminate automatically upon
                  Key Employee's death.

<PAGE>   9


            b.    Employer may terminate Key Employee's employment under this
                  Agreement at any time, upon thirty (30) days written notice to
                  Key Employee, if Key Employee becomes permanently disabled.
                  Permanent disability shall be determined by Employer in good
                  faith according to the same standards applicable to the
                  employees of Employer generally under the disability benefits
                  referred to in Section 3(d).

            c.    Employer shall have the right to terminate Key Employee's
                  employment under this Agreement at any time (i) immediately
                  for "cause" (which shall mean for any action or inaction of
                  Key Employee which is adverse to Employer's interests,
                  including, without limitation, Key Employee's dishonesty,
                  grossly negligent misconduct, willful misconduct, disloyalty,
                  act of bad faith, neglect of duty or material breach of this
                  Agreement or of any Employer policy applicable to its
                  employees generally), or (ii) without cause upon thirty (30)
                  days written notice to Key Employee.

            d.    Key Employee may voluntarily terminate his employment under
                  this Agreement at any time, upon thirty (30) days prior
                  written notice to Employer.

     7.     EFFECTS OF TERMINATION.

            a.    In the event of automatic termination of employment by reason
                  of Key Employee's death pursuant to Section 6(a), or by
                  Employer by reason of Key Employee's permanent disability
                  pursuant to Section 6(b), all of Employer's obligations under
                  this Agreement shall end except for any Compensation payable
                  under Section 3(a) subject to Section 4, Employer's
                  obligations to pay Key Employee's Living Expenses incurred to
                  the date of termination (for purposes of this Subsection (a),
                  the date of death or the expiration of the 30-day notice
                  period under Section 6(b), as applicable). Key Employee shall
                  also have the right to receive any payments under the death or
                  disability benefits, as the case may be, provided to Key
                  Employee pursuant to Section 3(d), if any.

            b.    In the event Key Employee voluntarily terminates his
                  employment, pursuant to Section 6(d) or otherwise, all of
                  Employer's obligations under this Agreement shall end except
                  for any Compensation payable under Section 3(a) subject to
                  Section 4, Employer's obligations to pay Key Employee's Living
                  Expenses incurred to the date of termination (which, for
                  purposes of this Subsection (b), shall be thirty (30) days
                  after the date on which notification is provided by Key
                  Employee to Employer pursuant to Section 6(d) (or if a lesser
                  period of advance notice is given by Key Employee, the date
                  his termination becomes effective)).

            c.    In the event Employer exercises its right of termination
                  without cause pursuant to Section 6(c)(ii), all of Employer's
                  obligations under this Agreement shall end, except that
                  Employer shall continue to be obligated to:

                  i.    pay any Compensation payable under Section 3(a) subject
                        to Section 4,

                  ii.   pay Key Employee's Living Expenses incurred to the date
                        of termination; and

                  iii.  provide continued benefits (or if unavailable under the
                        general terms and provisions of the applicable plan,
                        their equivalent) for Key Employee and his dependents,
                        for a period terminating on the earliest of (A) the
                        Ending Date, (B) the commencement date

<PAGE>   10

                        of equivalent benefits from a new employer, or (C) Key
                        Employee's normal retirement date (after which the terms
                        of the retirement plan which would have been applicable
                        to Key Employee had he retired as of such termination
                        date rather than having been terminated shall govern),
                        under all insured and self-insured employee welfare
                        benefit plans in which Key Employee was entitled to
                        participate immediately prior to such termination date,
                        provided that Key Employee shall not be required to pay
                        any amount greater than the regular contribution made by
                        Key Employee for such participation immediately prior to
                        such termination date.

            d.    In the event Employer exercises its right of termination for
                  cause pursuant to Section 6(c)(i), all of Employer's
                  obligations under this Agreement shall end except for any
                  benefit payable under Section 3(a) subject to Section 4 and
                  Employer's obligations to pay Key Employee's Living Expenses
                  incurred to the date of such termination.

     8.     COVENANT NOT TO COMPETE.

            a.    Restricted Activities--Duration. Except as otherwise consented
                  to or approved by Employer's Board of Directors in writing,
                  Key Employee agrees that, in addition to being operative
                  during the Employment Period, the provisions of Subsections
                  8(a)(i) through 8(a)(iii), inclusive, shall be operative for a
                  period of twelve (12) months after the later of (1) the date
                  Key Employee's employment with Employer (pursuant to this
                  Agreement or otherwise) is terminated or otherwise ceases, or
                  (2) the completion of the vesting of nonvested Compensation
                  pursuant to Section 3(a)(vi), regardless of the time, manner
                  or reason for the termination or other cessation of such
                  employment. During such periods, without Telxon's prior
                  written consent, Key Employee will not, directly or
                  indirectly, acting alone or as a member of a partnership or as
                  an owner, director, officer, employee, manager, representative
                  or consultant of any corporation or other business entity:

                  i.    engage in any business which manufactures, sells,
                        distributes, services or supports products or services
                        of a type manufactured, sold, marketed, serviced or
                        supported, or in any other business in competition with
                        or adverse to the business that is conducted by
                        Employer, or which Employer is in the process of
                        developing and in or of which Key Employee participated
                        or has knowledge, at the time of the cessation of Key
                        Employee's employment with Employer, in the United
                        States, Canada or any European, Asian, Pacific Rim or
                        other foreign country in which Employer then or
                        thereafter transacts business or is making a bona fide
                        attempt to do so;

                  ii.   induce, request or attempt to influence any customer or
                        supplier of Employer to curtail or cancel their business
                        or prospective business with Employer or in any way
                        interfere with Employer's business relationships; or

                  iii.  induce, solicit or assist or facilitate the inducement
                        or solicitation by any third person of any employee,
                        officer, agent or representative of Employer to
                        terminate his respective relationship with Employer or
                        in any way interfere with Employer's employee, officer,
                        agent or representative relationships.

            b.    Tolling; Relief of Obligations. In the event that Key Employee
                  breaches any provision of this Section 8, (i) such violation
                  shall toll the running of the twelve (12) month period set
                  forth in Section 6(a) from the date of commencement of such
                  violation until such violation

<PAGE>   11

                  ceases, and (ii) Key Employee shall immediately forfeit all
                  nonvested Compensation and the nonvested portion of his
                  Deferred Compensation Account.

            c.    "Blue Penciling" or Modification. If either the length of
                  time, geographic area or scope of restricted business activity
                  set forth in Section 8(a) is deemed unreasonably restrictive
                  or unreasonable in any other respect in any proceeding before
                  a court of competent jurisdiction, Key Employee and Employer
                  agree and consent to such court's modifying or reducing such
                  restriction(s) with respect, but only with respect, to that
                  jurisdiction to the extent deemed reasonable under the
                  circumstances then presented.

     9.     NONDISCLOSURE OF CONFIDENTIAL INFORMATION.

            a.    For purposes of this Agreement, "Confidential Information"
                  means all information or trade secrets of any type or
                  description belonging to Employer which are proprietary and
                  confidential to Employer and which are not publicly disclosed
                  or are only disclosed with restrictions. Without limiting the
                  generality of the foregoing, Confidential Information
                  includes: strategic and other plans for carrying on business;
                  cost data and other financial information; lists of customers,
                  employees, vendors and business partners and alliances;
                  manufacturing methods and processes; product research and
                  engineering data, drawings, designs and schematics; computer
                  programs, flow charts, routines, subroutines, translators,
                  compilers, operating systems and object and source codes;
                  specifications, inventions, know-how, calculations and
                  discoveries; any letters, papers, documents and instruments
                  disclosing or reflecting any of the foregoing; and all
                  information revealed to or acquired or created by Key Employee
                  during Key Employee's employment by Employer relating to any
                  of the foregoing or otherwise to Employer's past, current or
                  future business.

            b.    Key Employee acknowledges that the discharge of Key Employee's
                  duties under this Agreement will necessarily involve his
                  access to Confidential Information. Key Employee acknowledges
                  that the unauthorized use by him or disclosure by him of such
                  Confidential Information to third parties might cause
                  irreparable damage to Employer and Employer's business.
                  Accordingly, Key Employee agrees that at all times after the
                  date hereof he will not, without the prior written consent of
                  Employer's Board of Directors, copy, publish, disclose,
                  divulge to or discuss with any third party, nor use for his
                  own benefit or that of others any Confidential Information,
                  except in the normal conduct of his duties under this
                  Agreement, it being understood and acknowledged by Key
                  Employee that all Confidential Information created, compiled
                  or obtained by Key Employee or Employer, or furnished to Key
                  Employee by any person while Key Employee is associated with
                  Employer, is and shall be and remain Employer's exclusive
                  property.

            c.    Promptly upon termination of his employment, irrespective of
                  the time or manner thereof or reason therefor, Key Employee
                  agrees to return and surrender to Employer all Confidential
                  Information and all copies thereof in any form which are in
                  any manner in his control or possession, as well as all other
                  Employer property.

      10.   RIGHTS. Key Employee acknowledges and agrees that any procedure,
            design feature, schematic, invention, improvement, development,
            discovery, know-how, concept, idea or the like (whether or not
            patentable, registrable under copyright or trademark laws, or
            otherwise protectable under similar laws) that Key Employee (whether
            individually or jointly with any

<PAGE>   12

            other person or persons) may conceive of, suggest, make, invent,
            develop or implement during the course of his service to Employer
            which relates in any way to the business of Employer or to the
            general industry of which Employer is a part, all physical
            embodiments and manifestations thereof, and all patent rights,
            copyrights and trademarks (and applications therefor) and similar
            protections thereof (all of the foregoing referred to as "Work
            Product") are and shall be the sole, exclusive and absolute property
            of Employer. All Work Product shall be deemed to be works for hire
            for the benefit of Employer, and to the extent that any Work Product
            may not constitute a work for hire, Key Employee hereby assigns to
            Employer all right, title and interest in, to and under such Work
            Product, including, without limitation, the right to obtain such
            patents, copyright registrations, trademark registrations or similar
            protections as Employer may desire to obtain. Key Employee will
            immediately disclose all Work Product to Employer and agrees, at
            anytime, upon Employer's request and without additional
            compensation, to execute any documents and otherwise to cooperate
            with Employer (including, without limitation, all lawful testimony
            and sworn statements or other certifications as may be appropriate)
            respecting the perfection of its right, title and interest in, to
            and under such Work Product and in any litigation or administrative
            or other proceeding or controversy in connection therewith, all
            expenses incident thereto be borne by Employer.

     11.    INDUCEMENT; REMEDIES INADEQUATE; AND SURVIVAL.

            a.    The covenants made by Key Employee in favor of Employer under
                  Sections 8, 9 and 10 and this Section 11 are being executed
                  and delivered by Key Employee in consideration of Key
                  Employee's employment with Employer and Employer's obligations
                  hereunder (including, without limitation, the Compensation and
                  all other benefits and remuneration provided for herein) in
                  confirmation of the confidentiality, non-competition and
                  inventions obligations which Key Employee hereby acknowledges
                  and agrees have been terms and conditions of his service to
                  Employer since the commencement thereof on the Effective Date.

            b.    Key Employee has carefully considered, and has had adequate
                  time and opportunity to consult with his own counsel or other
                  advisors regarding the nature and extent of the restrictions
                  upon him, and the rights and remedies conferred upon Employer,
                  under Sections 8, 9 and 10 and this Section 11, and hereby
                  acknowledges and agrees that such restrictions are reasonable
                  in time, territory and scope, are designed to eliminate
                  competition which otherwise would be unfair to Employer, do
                  not stifle the inherent skill and experience of Key Employee,
                  would not operate as a bar to Key Employee's sole means of
                  support, are fully required to protect the legitimate
                  interests of Employer and do not confer a benefit upon
                  Employer disproportionate to the detriment to Key Employee.

            c.    Key Employee acknowledges that the services to be rendered by
                  him to Employer as contemplated by this Agreement are special,
                  unique and of extraordinary character. Key Employee expressly
                  agrees and understand that the remedy at law for any breach by
                  him of Section 8, 9 or 10 will be inadequate and that the
                  damages flowing from such breach are not readily susceptible
                  to being measured in monetary terms. Accordingly, upon
                  adequate proof of Key Employee's violation of any legally
                  enforceable provision of Section 8, 9 or 10 Employer shall be
                  entitled to immediate injunctive relief, including, without
                  limitation, a temporary order restraining any threatened or
                  further breach. In the event any equitable proceedings are
                  brought to enforce any provision of Sections 8, 9 and 10, Key
                  Employee agrees that he will not raise in such proceedings any
                  defense that Employer has an

<PAGE>   13


                  adequate remedy at law, and Key Employee hereby waives any
                  such defense. Nothing in this Agreement shall be deemed to
                  limit Employer's remedies at law or in equity for any breach
                  by Key Employee of any of the provisions of Sections 8, 9 and
                  10 which may be pursued or availed of by Employer. Without
                  limiting the generality of the immediately preceding sentence,
                  any covenant on Key Employee's part contained in Section 8, 9
                  or 10 which may not be specifically enforceable shall
                  nevertheless, if breached, give rise to a cause of action for
                  monetary damages.

            d.    As used in Sections 8, 9 and 10 and in this Section 11, the
                  term "Employer" (other than with respect to the Board of
                  Directors) shall include, in addition to Employer, all
                  subsidiaries and other affiliates of Employer, whether so
                  related to Employer during Key Employee's employment with
                  Employer or at any time thereafter.

            e.    Subject only to such time limitations as may be expressly set
                  forth therein, the covenants and agreements made by Key
                  Employee in Sections 8, 9 and 10 and this Section 11 shall
                  survive full payment by Employer of the amounts to which Key
                  Employee is entitled under this Agreement and the termination
                  of this Agreement and Key Employee's employment hereunder or
                  otherwise. The provisions of Sections 8, 9 and 10 and this
                  Section 11, and to the extent applicable thereto, Sections 15
                  through 22, shall continue to apply to and be binding upon Key
                  Employee in the event and for so long as Key Employee shall
                  remain in the employ of Employer following any termination
                  under this Agreement and for such post-employment period as
                  may there be specified but measured from the end of such
                  continued employment.

            f.    Notwithstanding anything in Sections 8, 9 or 10 or this
                  Section 11 the application of which may otherwise have
                  contrary effect, the technology development efforts which were
                  being pursued by Key Employee prior to his commencement of
                  employment with Employer as described on the attached Schedule
                  A and, so long as the same are not during the term of his
                  employment hereunder actively pursued by Key Employee on
                  Employer time or premises or with the direct use of Employer
                  resources, the continuation thereof or any commercialization
                  or other exploitation thereof shall constitute a breach of any
                  of the covenants, restrictions and agreements to be performed
                  or observed by Key Employee under this Agreement, and Employer
                  shall not have any right, title or interest of any kind or
                  nature whatsoever to or in the whole or any part thereof.

      12.   ASSIGNMENT OF KEY EMPLOYEE'S RIGHTS. In no event shall Employer be
            obligated to make any payment under this Agreement to any assignee
            or creditor of Key Employee. Prior to the time provided for the
            making of any payment under this Agreement, neither Key Employee nor
            his legal representative shall have any right by way of anticipation
            or otherwise to assign or otherwise dispose of any interest under
            this Agreement.

      13.   RIGHT OF SET-OFF. Any payments to be made to Key Employee under this
            Agreement shall be subject to offset by Employer for any claims for
            damages, liabilities or expenses which it may have against Key
            Employee.

      14.   EMPLOYER'S OBLIGATIONS UNFUNDED. Except as to any benefits that may
            be required to be funded under any benefit plan of Employer pursuant
            to law or under any other written agreement, the obligations of
            Employer under this Agreement are not funded, and Employer

<PAGE>   14


            shall not be required to deposit in escrow or otherwise set aside
            any moneys in advance of the due date for payment thereof to Key
            Employee.

      15.   NOTICES. Any notice to be given hereunder by Employer to Key
            Employee shall be deemed to be given if delivered to Key Employee in
            person, or if mailed to Key Employee, by certified mail, postage
            prepaid, return receipt requested, at his address last shown on the
            records of Employer, and any notice to be given by Key Employee to
            Employer shall be deemed to be given if delivered in person or by
            mail, postage prepaid, return receipt requested to the Chief
            Executive Officer at Employer's principal executive office, unless
            Key Employee or Employer shall have duly notified the other parties
            in writing of a change of address. If mailed, notice shall be deemed
            to have been given when deposited in the mail as set forth above.
            Key Employee may also give notice to Employer by fax, to the
            attention of its Chief Executive Officer, at (330) 664-2888 (or such
            other number of which Employer may duly notify Key Employee), which
            notice shall be deemed effective as of the time shown in the
            telephonic confirmation of transmission; Key Employee shall send a
            confirmation copy of any fax notice by first class mail, postage
            prepaid, to Employer's Chief Executive Officer at Employer's
            principal executive office.

      16.   AMENDMENTS. This Agreement shall not be modified or discharged, in
            whole or in part, except by an agreement in writing signed by the
            parties hereto.

      17.   ENTIRE AGREEMENT. This Agreement, together with any and all other
            written agreement(s) made contemporaneously herewith, constitute the
            entire agreement between the parties with respect to Key Employee's
            employment by Employer from and after the Effective Date. The
            parties are not relying on any other representation or understanding
            with respect thereto, express or implied, oral or written. This
            Agreement, as supplemented by such contemporaneous agreement(s),
            supersedes any prior employment agreement, written or oral, of
            Employer with respect to Key Employee.

      18.   CAPTIONS. The captions contained in this Agreement are for
            convenience of reference only and do not affect the meaning of any
            terms or provisions hereof.

      19.   GENDER AND NUMBER. Whenever the context may permit, any pronouns
            used herein shall include the corresponding masculine, feminine and
            neuter forms, and the singular form of any noun or pronoun,
            including any terms defined herein, shall include the plural and
            vice versa.

      20.   BINDING EFFECT. The rights and obligations of Employer hereunder
            shall inure to the benefit of, and shall be binding upon, Employer
            and its respective successors and assigns, and the rights and
            obligations of Key Employee hereunder shall inure to the benefit of,
            and shall be binding upon, Key Employee and his heirs, personal
            representatives and estate.

      21.   SEVERABLE PROVISIONS. The provisions of this Agreement are
            severable, and if any one or more provisions may be determined to be
            illegal or otherwise unenforceable in any jurisdiction, in whole or
            in part, the remaining provisions and any partially enforceable
            provision shall be binding and enforceable to the extent enforceable
            in such jurisdiction.

      22.   GOVERNING LAW. This Agreement shall be interpreted, construed, and
            enforced in all respects in accordance with the laws of the State of
            Ohio.

<PAGE>   15


     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
Effective Date.


      TELXON CORPORATION                        KEY EMPLOYEE


      BY: /S/ JOHN W. PAXTON, SR.               DAVID H. BIGGS
         ------------------------               -----------------------------
         JOHN W. PAXTON                         DAVID H. BIGGS
         CHAIRMAN & CEO