<PAGE>   1
                                                                   EXHIBIT 10.58

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (this "Agreement"), dated as of the 15th day
of March 2000, but effective as of January 1, 2000, is entered into in
Richardson, Texas by and between HighwayMaster Communications, Inc., a Delaware
corporation, with its principal place of business located at 1155 Kas Drive,
Suite 100, Richardson, Texas, 75081 ("Employer"), and W. Michael Smith, an
individual residing at 3236 Langley Drive, Plano, Texas 75025 ("Employee").

         NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, Employer and Employee, intending to be legally bound, hereby agree as
follows:

1.       Employment Relationship. Employer hereby employs Employee, and Employee
         hereby accepts such employment, upon the terms and conditions set forth
         in this Agreement. Such employment relationship shall continue for the
         stated term of this Agreement, as described in Paragraph 8 hereof,
         unless earlier terminated pursuant to Paragraph 5 hereof.

2.       Position and Responsibilities of Employee. Employee shall be employed
         as Chief Financial Officer with job responsibilities related thereto,
         and such job responsibilities may be expanded at the sole discretion of
         Employer. Employee shall report to the President and shall devote such
         time, skill and attention to the business of Employer as shall be
         required for the efficient management thereof, and shall manage and
         supervise such business, and shall devote his full time best efforts to
         the faithful performance of his duties on behalf of Employer. Employee
         shall also perform such other duties, and may have job responsibilities
         and titles modified from time to time as may be requested by the
         President or by resolution of the Board of Directors of Employer,
         provided such duties and job titles are generally consistent with the
         level of responsibility currently held by Employee. Employee shall not
         engage in additional gainful employment of any kind or undertake any
         role or position, whether or not for compensation, with any competitor
         of Employer during the term of this Agreement without advance written
         consent from Employer.

3.       Compensation. For all services rendered by Employee pursuant to this
         Agreement, Employer shall pay to Employee, and Employee shall accept as
         full compensation hereunder the following:

         a.       Salary. Employee shall receive a salary of $13,500.00 per
                  month payable by Employer in bi-monthly amounts in Richardson,
                  Texas. Employee's salary shall be subject to all appropriate
                  federal and state withholding taxes and shall be payable in
                  accordance with the normal payroll procedures of Employer.

         b.       Benefits and Perquisites. Employee shall be entitled to
                  participate in the employee benefit plans provided by Employer
                  for all employees generally, and for executive employees of
                  Employer. Employer shall be entitled to change such plans from
                  time to time, and the parties acknowledge that at the initial
                  date of this


                                        1
<PAGE>   2


                  Agreement the fringe benefits provided to Employee include a
                  corporate 401(k) plan, health, dental, life, short and
                  long-term disability insurance for the Employee, and
                  reimbursement of certain expenses in accordance with the
                  policies and procedures of Employer.

         c.       Discretionary Bonuses. Employer shall establish an incentive
                  bonus plan for Employee based on various targets and
                  performance criteria to be established by the President and
                  Board of Directors in consultation with the Employee. The
                  evaluation of the performance of the Employee as measured by
                  the applicable targets and the awarding of applicable bonuses,
                  if any, shall be at the sole discretion of the President. The
                  maximum annual bonus which may be awarded to Employee shall be
                  in the amount of thirty percent (30%) of Employee's annual
                  base salary at each fiscal year end of Employer during the
                  term of this Agreement, pro-rated for partial years. The
                  annual discretionary bonus may be awarded in whole, in part,
                  or withheld in its entirety based on the level of incentive
                  bonus plan performance criteria achieved by Employee, in the
                  sole judgement of the President and Board of Directors. If
                  Employee terminates this Agreement prior to the expiration of
                  the initial one (1) year term or if Employer terminates this
                  Agreement for cause as per Paragraph 5(b), the Employee will
                  not be paid any Discretionary Bonus, in whole or in part. If
                  Employer terminates this Agreement as per Paragraph 5 (c)
                  hereof prior to the expiration of the initial one (1) year
                  term, Employee shall be entitled to receive his Discretionary
                  Bonus on a prorated basis in such amount as determined by the
                  President in her sole discretion.

         d.       Stock Options. Employee previously executed Stock Option
                  Agreement(s) by which Employee has been granted the right to
                  purchase shares of common stock of Employer at a stated
                  exercise price as per the terms and conditions of the
                  HighwayMaster Communications, Inc.(f/k/a HM Holding
                  Corporation) 1994 Stock Option Plan (the "Plan")(such previous
                  option grants hereinafter referred to as "Previous Stock
                  Option Grants"). As per the Plan and the Stock Option
                  Agreements, Employee's options vest in five (5) installments
                  with 20% vesting immediately upon the grant date and 20%
                  vesting on each of the next four yearly anniversaries of grant
                  date. Notwithstanding the terms of the Plan and the Stock
                  Option Agreements previously executed by Employee and
                  Employer, upon the occurrence of a Change in Control as
                  defined in Paragraph 7 of this Agreement, all stock options
                  issued pursuant to the Previous Stock Option Grants shall
                  accelerate and be deemed vested on the day prior to the Change
                  in Control of Employer.

4.       Protective Covenants. Employee recognizes that his employment by
         Employer is one of the highest trust and confidence because (i)
         Employee will become fully familiar with all aspects of Employer's
         business during the period of his employment with Employer, (ii)
         certain information of which Employee will gain knowledge during his
         employment by Employer is proprietary and confidential information and
         is of special and peculiar value to Employer, and (iii) if any such
         proprietary and confidential information were imparted to or became
         known by any person, including Employee, engaging in a business in


                                       2
<PAGE>   3


         competition with that of Employer, hardship, loss and irreparable
         injury and damage could result to Employer, the measurement of which
         would be difficult if not impossible to ascertain. Employee further
         acknowledges that Employer has developed unique skills, concepts, sales
         presentations, marketing programs, marketing strategy, business
         practices, methods of operation, pricing information, production cost
         information, trademarks, licenses, technical information, proprietary
         information, computer software programs, tapes and discs concerning its
         operations systems, customer lists, customer leads, documents
         identifying past, present and future customers, customer profile and
         preference data, hiring and training methods, investment policies,
         financial and other confidential and proprietary information concerning
         its operations and expansion plans ("Trade Secrets"). Therefore,
         Employee agrees that it is necessary for Employer to protect its
         business and that of its affiliates from such damage, and Employee
         further agrees that the following covenants constitute a reasonable and
         appropriate means, consistent with the best interest of both Employee
         and Employer, to protect Employer or its affiliates against damage due
         to loss or disclosure of proprietary information or Trade Secrets and
         shall apply to and be binding upon Employee as provided herein:

         a.       Trade Secrets. Employee recognizes that his position with
                  Employer is one of the highest trust and confidence by reason
                  of Employee's access to and contact with certain Trade Secrets
                  of Employer. Employee agrees and covenants that, except as may
                  be required by Employer in connection with this Agreement, or
                  with the prior written consent of Employer, Employee shall
                  not, either during the term of this Agreement or thereafter,
                  directly or indirectly, use for Employee's own benefit or for
                  the benefit of another, or disclose, disseminate, or
                  distribute to another, except as directed by Employer or as
                  required for the performance of Employee's duties on behalf of
                  the Employer, any Trade Secret (whether or not acquired,
                  learned, obtained, or developed by Employee alone or in
                  conjunction with others) of Employer or of others with whom
                  Employer has a business relationship. All Trade Secrets, and
                  all memoranda, notes, records, drawings, documents, or other
                  writings whatsoever made, compiled, acquired, or received by
                  Employee during the term of this Agreement, arising out of, in
                  connection with, or related to any activity or business of
                  Employer, including, but not limited to, the customers,
                  suppliers, or others with whom Employer has a business
                  relationship, the arrangements of Employer with such parties,
                  and the pricing and expansion policies and strategy of
                  Employer, are, and shall continue to be, the sole and
                  exclusive property of Employer and shall, together with all
                  copies thereof, any and all documents constituting or relating
                  to Employer's proprietary information and Trade Secrets, and
                  all advertising literature, be returned and delivered to
                  Employer by Employee immediately, without demand, upon the
                  termination of this Agreement, or at any time upon Employer's
                  demand.

                           Employee acknowledges that Employer would not provide
                  Employee access to Employer's Trade Secrets and proprietary
                  and confidential information but for Employee's covenants in
                  this Paragraph 4.


                                       3
<PAGE>   4


                           Employee represents and warrants that he is not bound
                  by any agreement with any prior employer or other party that
                  will be breached by execution and performance of this
                  Agreement, or which would otherwise prevent him from
                  performing his duties with Employer as set forth in this
                  Agreement. Employee represents and warrants that he has not
                  retained any copies of proprietary and confidential
                  information of any prior employer, and he will not use or rely
                  on any confidential and proprietary information of any prior
                  employer in carrying out his duties for Employer.

         b.       Covenant Not to Compete. In consideration of the numerous
                  mutual promises contained in the Agreement between Employer
                  and the Employee, including, without limitation, those
                  involving access to Trade Secrets and confidential information
                  and training, and in order to protect Employer's Trade Secrets
                  and the confidential information and to reduce the likelihood
                  of irreparable damage which would occur in the event such
                  information is provided to or used by a competitor of
                  Employer, Employee agrees that during his or her employment
                  and for an additional period of eighteen (18) months
                  immediately following the voluntary or involuntary termination
                  of his or her employment (the "Non-Competition Term"),
                  Employee will not, without the prior written consent of
                  Employer (which consent may be withheld in its sole
                  discretion), enter the employ of any person or entity, either
                  directly or indirectly either as principal, agent,
                  representative, shareholder (except owning publicly traded
                  stock for investment purposes only in which Employee owns less
                  than 5%) consultant, officer, business partner, associate,
                  employee or otherwise, with a place of business in the United
                  States of America and/or Canada, which sells or offers to sell
                  services and/or products which compete directly with the
                  services and/or products offered or to be offered for sale by
                  Employer.

                  If, during any period within the Noncompetition Term, Employee
                  is not in compliance with the terms of this Paragraph 4,
                  Employer shall be entitled to, among other remedies,
                  compliance by Employee with the terms of this Paragraph 4 for
                  an additional period equal to the period of such
                  noncompliance. For purposes of this Agreement, the term
                  "Noncompetition Term" shall also include this additional
                  period. Employee hereby acknowledges that the geographic
                  boundaries, scope of prohibited activities and the time
                  duration of the provisions of this Section 4 are reasonable
                  and are no broader than are necessary to protect the
                  legitimate business interests of the Employer.

                  The Employer and Employee agree and stipulate that the
                  agreements and covenants not to compete contained in Paragraph
                  4 hereof are fair and reasonable in light of all of the facts
                  and circumstances of the relationship between Employee and
                  Employer; however, Employee and Employer are aware that in
                  certain circumstances courts have refused to enforce certain
                  agreements not to compete. Therefore, in furtherance of, and
                  not in derogation of the provisions of Paragraph 4, Employer
                  and Employee agree that in the event a court should decline to
                  enforce the provisions of Paragraph 4, that Paragraph 4 shall
                  be deemed to be modified or reformed to restrict Employee's
                  competition with Employer or its


                                       4
<PAGE>   5


                  affiliates to the maximum extent, as to time, geography and
                  business scope, which the court shall find enforceable;
                  provided, however, in no event shall the provisions of
                  Paragraph 4 be deemed to be more restrictive to Employee than
                  those contained herein.

         c.       Non-Solicitation Employee agrees that during his employment,
                  and for a period of twenty four (24) months following the
                  termination of his employment (for whatever reason), that
                  neither he nor any individual, partner(s), limited
                  partnership, corporation or other entity or business with
                  which he is in any way affiliated, including, without
                  limitation, any partner, limited partner, director, officer,
                  shareholder, employee, or agent of any such entity or
                  business, will (i) request, induce or attempt to influence,
                  directly or indirectly, any employee of Employer to terminate
                  their employment with Employer or (ii) employ any person who
                  as of the date of this Agreement was, or after such date is or
                  was, an employee of Employer. Employee further agrees that
                  during the period beginning with the commencement of
                  Employee's employment with Employer and ending twenty four
                  (24) months after the termination of Employee's employment
                  with Employer (for whatever reason), he shall not, directly or
                  indirectly, as an employee, agent, consultant, stockholder,
                  director, partner or in any other individual or representative
                  capacity of Employer or of any other person, entity or
                  business, solicit or encourage any present or future customer,
                  supplier, contractor, partner or investor of the Employer to
                  terminate or otherwise alter his, her or its relationship with
                  Employer.

         d.       Work Product. For purposes of this Paragraph 4, "Work Product"
                  shall mean all intellectual property rights, including all
                  trade secrets, U.S. and international copyrights, patentable
                  inventions, discoveries and other intellectual property rights
                  in any programming, design, documentation, technology, or
                  other work product that is created in connection with
                  Employee's work. In addition, all rights in any preexisting
                  programming, design, documentation, technology, or other Work
                  Product provided to Employer during Employee's employment
                  shall automatically become part of the Work Product hereunder,
                  whether or not it arises specifically out of my "Work." For
                  purposes of this Agreement, "Work" shall mean (1) any direct
                  assignments and required performance by or for the Employer,
                  and (2) any other productive output that relates to the
                  business of the Employer and is produced during the course of
                  Employee's employment or engagement by Employer. For this
                  purpose, Work may be considered present even after normal
                  working hours, away from Employer's premises, on an
                  unsupervised basis, alone or with others. Unless otherwise
                  provided in a subsequent writing signed by the President of
                  the Employer, this Agreement shall apply to all Work Product
                  created in connection with all Work conducted before or after
                  the date of this Agreement.

                  Employer shall own all rights in the Work Product. To this
                  end, all Work Product shall be considered work made for hire
                  for Employer. If any of the Work Product may not, by operation
                  of law or agreement, be considered Work made by


                                       5
<PAGE>   6


                  Employee for hire for the Employer (or if ownership of all
                  rights therein do not otherwise vest exclusively in the
                  Employer immediately), Employee agrees to assign, and upon
                  creation thereof does hereby automatically assign, with
                  further consideration, the ownership thereof to the Employer.
                  Employee hereby irrevocably relinquishes for the benefit of
                  Employer and its assigns any moral rights in the Work Product
                  recognized by applicable law. Employer shall have the right to
                  obtain and hold, in whatever name or capacity it selects,
                  copyrights, registrations, and any other protection available
                  in the Work Product.

                  Employee agrees to perform upon the request of Employer,
                  during or after Employee's Work or employment, such further
                  acts as may be necessary or desirable to transfer, perfect,
                  and defend the Employer's ownership of the Work Product,
                  including by (1) executing, acknowledging, and delivering any
                  requested affidavits and documents of assignment and
                  conveyance, (2) obtaining and/or aiding in the enforcement of
                  copyrights, trade secrets, and (if applicable) patents with
                  respect to the Work Product in any countries, and (3)
                  providing testimony in connection with any proceeding
                  affecting the rights of the Employer in any Work Product.

                  Employee warrants that Employee's Work for Employer does not
                  and will not in any way conflict with any remaining
                  obligations Employee may have with any prior employer or
                  contractor. Employee also agrees to develop all Work Product
                  in a manner that avoids even the appearance of infringement of
                  any third party's intellectual property rights.

         e.       Survival of Covenants. Each covenant of Employee set forth in
                  this Paragraph 4 shall survive the termination of this
                  Agreement and shall be construed as an agreement independent
                  of any other provision of this Agreement, and the existence of
                  any claim or cause of action of Employee against Employer
                  whether predicated on this Agreement or otherwise shall not
                  constitute a defense to the enforcement by Employer of said
                  covenant. No modification or waiver of any covenant contained
                  in Paragraph 4 shall be valid unless such waiver or
                  modification is in writing and signed by the President of the
                  Employer.

         f.       Remedies. In the event of breach or threatened breach by
                  Employee of any provision of this Paragraph 4, Employer shall
                  be entitled to relief by temporary restraining order,
                  temporary injunction, or permanent injunction or otherwise, in
                  addition to other legal and equitable relief to which it may
                  be entitled, including any and all monetary damages which
                  Employer may incur as a result of said breach, violation or
                  threatened breach or violation. Employer may pursue any remedy
                  available to it concurrently or consecutively in any order as
                  to any breach, violation, or threatened breach or violation,
                  and the pursuit of one of such remedies at any time will not
                  be deemed an election of remedies or waiver of the right to
                  pursue any other of such remedies as to such breach,
                  violation, or threatened breach or violation, or as to any
                  other breach, violation, or threatened breach or violation.


                                       6
<PAGE>   7


                           Employee hereby acknowledges that Employee's
                  agreement to be bound by the protective covenants set forth in
                  this Paragraph 4 was a material inducement for Employer
                  entering into this Agreement, agreeing to pay Employee the
                  compensation and benefits set forth herein, and providing
                  Employee access to Employer's Trade Secrets and other
                  confidential information.

5.       Termination. The employment relationship between Employee and Employer
         created hereunder shall terminate before the expiration of the stated
         term of this Agreement upon the occurrence of any one of the following
         events:

         a.       Death or Permanent Disability. The employment relationship
                  shall be terminated effective on the death or permanent
                  disability of the Employee.

         b.       Termination for Cause. The following events, which for
                  purposes of this Agreement shall constitute "cause" for
                  termination:

                  i.       Any act of fraud, misappropriation or embezzlement by
                           Employee with respect to any aspect of Employer's
                           business;

                  ii.      The breach by Employee of any provision of Paragraphs
                           1, 2 or 4 (including but not limited to a refusal to
                           follow lawful directives of the President or Board of
                           Directors of Employer which are not inconsistent with
                           the provisions of this Agreement) of this Agreement;

                  iii.     The conviction of Employee by a court of competent
                           jurisdiction of a felony or of a crime involving
                           moral turpitude;

                  iv.      The intentional and material breach by the Employee
                           of any non-disclosure or
                           non-competition/non-solicitation provision of any
                           agreement to which the Employee and Employer or any
                           of its subsidiaries are parties; or

                  v.       The intentional and continual failure by the Employee
                           to perform in all material respects his duties and
                           responsibilities (other than as a result of death or
                           disability) and the failure of the Employee to cure
                           the same in all material respects within thirty (30)
                           days after written notice thereof from Employer;

                  vi.      The illegal use of drugs by Employee during the term
                           of this Agreement that, in the determination of the
                           President of Employer, substantially interferes with
                           Employee's performance of his duties hereunder;

                  vii.     acceptance of employment with any other employer
                           except upon written permission of the President of
                           the Employer.


                                       7
<PAGE>   8


         c.       Termination by Employer with Notice. Employer may terminate
                  this Agreement without cause at any time upon thirty (30) days
                  written notice to Employee, during which period Employee shall
                  not be required to perform any services for Employer other
                  than to assist Employer in training his successor and
                  generally preparing for an orderly transition; PROVIDED,
                  HOWEVER, that Employee shall be entitled to compensation upon
                  such termination as provided in Paragraph 6(a), (b), (c) and
                  (d) below.

6.       Compensation Upon Termination. Upon the termination of Employee's
         employment under this Agreement before the expiration of the stated
         term hereof for any reason, Employee shall be entitled to:

         a.       the salary earned by him before the effective date of
                  termination as provided in Paragraph 3(a) hereof (including
                  salary payable during any applicable notice period), prorated
                  on the basis of the number of full days of service rendered by
                  Employee during the salary payment period to the effective
                  date of termination;

         b.       any accrued, but unpaid, vacation benefits; and

         c.       any previously authorized but unreimbursed business expenses.

                  If Employee's employment hereunder terminates because of the
         death or permanent disability of Employee, all amounts that may be due
         to him under this Paragraph 6 shall be paid to him or his
         administrators, personal representatives, heirs and legatees, as may be
         appropriate.

         d.       Additional Compensation Upon Termination Without Cause. If
                  Employee's employment hereunder terminates without cause
                  pursuant to Paragraph 5(c) above, Employer shall pay to
                  Employee in addition to the amounts set forth in Subparagraphs
                  6(a), 6(b) and 6(c) above:

                  i.       salary payments for the duration of the initial term
                           of this Agreement, or any Renewal Term, as set forth
                           in Paragraph 8 below when and as such salary payments
                           would have come due had the Employee's employment not
                           been terminated;

                  The provisions of Paragraphs 4, 5 and 6 hereof shall survive
         the termination of the employment relationship hereunder and this
         Agreement to the extent necessary or reasonably appropriate to effect
         the intent of the parties hereto as expressed in such provisions.


                                       8
<PAGE>   9


7.       Compensation Upon Change in Control.

         a.       For purposes of the Agreement, "Change of Control" means the
                  occurrence of any of the following events:

                  i.       any "person" or "group" as such terms are used under
                           Sections 13(d) and 14(d) of the Securities Exchange
                           Act of 1934, as amended (the "Exchange Act"), other
                           than Employer, any trustee or any other fiduciary
                           holding securities under an employee benefit plan of
                           Employer, or any corporation owned, directly or
                           indirectly, by the stockholders of Employer in
                           substantially the same proportions as their ownership
                           of Common Stock of Employer, is or becomes the
                           "beneficial owner" (as defined in Rule 13d-3 under
                           the Exchange Act), of securities of Employer
                           representing thirty-five percent (35%) or more of the
                           combined voting power of Employer's voting securities
                           then-outstanding;

                  ii.      during any period of two consecutive years,
                           individuals who at the beginning of such period
                           constituted the Board of Directors of Employer cease
                           for any reason to constitute a majority thereof
                           (unless the election, or nomination for election by
                           Employer's stockholders, of such director was
                           approved by a vote of at least two-thirds (2/3) of
                           the directors then still in office who either were
                           directors at the beginning of such period or whose
                           election or nomination for election was previously so
                           approved);

                  iii.     Employer completes a merger or consolidation of
                           Employer with another corporation, other than (A) a
                           merger or consolidation which would result in the
                           voting securities of Employer outstanding immediately
                           prior thereto continuing to represent (either by
                           remaining outstanding or by being converted into
                           voting securities of the surviving entity) more than
                           eighty percent (80%) of the combined voting power of
                           the voting securities of Employer or such surviving
                           entity outstanding immediately after such merger or
                           consolidation, or (B) a merger or consolidation
                           affected to implement a recapitalization of Employer
                           (or similar transaction) in which no "person" (as
                           herein above defined) acquires more than thirty
                           percent (30%) of the combined voting power of
                           Employer's then-outstanding voting securities; or

                  iv.      the stockholders of Employer approve a plan of
                           complete liquidation of Employer or any agreement for
                           the sale or disposition by Employer of all or
                           substantially all of Employer's assets.


                                       9
<PAGE>   10


         b.       For purposes of this Agreement, "Good Reason" means the
                  occurrence of any of the following events:

                  i.       the reduction of the Employee's job title, position
                           or responsibilities without the Employee's prior
                           written consent;

                  ii.      the change of the location where the Employee is
                           based to a location which is more than fifty (50)
                           miles from his present location without the
                           Employee's prior written consent; or

                  iii.     the reduction of the Employee's annual salary and
                           bonus by more than ten percent (10%) from the sum of
                           the higher rate of the Employee's actual annual
                           salary and bonus in effect within two years
                           immediately preceding the Change of Control.

                  Employee shall give Employer fifteen (15) business days notice
                  of an intent terminate this Agreement for "Good Reason" as
                  defined in this Paragraph 7, and provide the Employer with ten
                  (10) business days after receipt of such notice from Employee
                  to remedy the alleged violation of subparagraphs 7(b)(i)(ii),
                  or (iii).

         c.       BENEFITS UPON CHANGE IN CONTROL

                  i.       Severance Benefits. If the Employee's employment with
                           Employer is terminated (i) by Employer (or by the
                           acquiring or successor business entity following a
                           Change of Control) other than for Cause or death, or
                           (ii) by the Employee for Good Reason, in either event
                           within a period beginning one hundred and eighty
                           (180) days before, and ending two (2) years after,
                           the date of a Change of Control (the "Change
                           Period"), the Employee shall receive a severance
                           benefit in an amount equal to the sum of:

                           (1)      the Employee's highest annual cash base
                                    salary in effect within two (2) years
                                    immediately preceding the Change of Control;
                                    plus

                           (2)      the average of the Employee's annual bonuses
                                    paid for the two (2) calendar years
                                    immediately preceding the Change of Control.

                           In addition, for eighteen months following the date
                           of termination of the Employee's employment in
                           circumstances in which a severance payment is due
                           hereunder, Employer shall provide the Employee health
                           and other welfare benefits that are not less
                           favorable to the Employee than those to which he was
                           entitled immediately prior to the Change in Control.
                           Provided however, Employer shall have no obligation
                           to provide Employee with any compensation under this
                           Paragraph 7 if Employee is in breach or violation of
                           any of the covenants contained in Paragraph 4.


                                       10
<PAGE>   11


                  ii.      Form of Payment. The amount of the severance benefit
                           provided in Paragraph 7(c)(i) hereof shall be paid to
                           Employee in two (2) equal installments, the first
                           installment payable as soon as practicable after the
                           occurrence of the event giving rise to the payment of
                           the severance benefit by Employer hereunder, but in
                           no event more than thirty (30) days thereafter, and
                           the second installment payable one (1) year following
                           the occurrence of such event, provided, however, that
                           the severance benefit payable by Employer pursuant to
                           Paragraph 7(c)(i) hereof will be reduced by any other
                           cash payments made to the Employee under a written
                           employment agreement between the Employee and
                           Employer for periods after the date on which the
                           Employee's employment was terminated. Provided
                           however, Employer shall have no obligation to provide
                           Employee with any compensation under this Paragraph 7
                           if Employee is in breach or violation of any of the
                           covenants contained in Paragraph 4.

                  iii.     Gross-Up Payments. Anything in this Agreement to the
                           contrary notwithstanding, in the event that a
                           severance payment is made under this Agreement and it
                           shall be determined (as hereafter provided) that any
                           payment (other than the Gross-Up Payments provided
                           for herein) or distribution by Employer or any of its
                           affiliates to or for the benefit of the Employee,
                           whether paid or payable or distributed or
                           distributable pursuant to the terms of this Agreement
                           or otherwise pursuant to or by reason of any other
                           agreement, policy, plan, program or arrangement, or
                           the lapse or termination of any restriction on, or
                           the vesting or exercisability of any of the foregoing
                           (a "Payment"), excluding, however, any stock option
                           or right in respect of restricted stock, would be
                           subject to the excise tax imposed by Section 4999 of
                           the Internal Revenue Code of 1986, as amended (the
                           "Code") (or any successor provision thereto), by
                           reason of being considered "contingent on a change in
                           ownership or control" of Employer, within the meaning
                           of Section 280G of the Code (or any successor
                           provision thereto) or to any similar tax imposed by
                           state or local law, or any interest or penalties with
                           respect to such tax (such tax or taxes, together with
                           any such interest and penalties, being hereafter
                           collectively referred to as the "Excise Tax"), then
                           the Employee shall be entitled to receive an
                           additional payment or payments (collectively, a
                           "Gross-Up Payment"); provided, however, that no
                           Gross-Up Payment shall be made with respect to the
                           Excise Tax, if any, imposed upon (i) any stock
                           option, including without limitation any incentive
                           stock option, as defined by Section 422 of the Code
                           ("ISO") granted prior to the execution of this
                           Agreement or (ii) any stock appreciation or similar
                           right, whether or not limited, granted in tandem with
                           an ISO described in clause (i). The Gross-Up Payment
                           shall be in an amount such that, after payment by the
                           Employee of all taxes (including any interest or
                           penalties imposed with respect to such taxes),
                           including an Excise Tax imposed upon the Gross-Up
                           Payment, the Employee retains an amount of the
                           Gross-Up Payment equal to the Excise Tax imposed upon
                           the Payment. The procedural


                                       11
<PAGE>   12


                           provisions relating to Gross-Up Payments set forth in
                           Annex A hereto are hereby incorporated herein by this
                           reference.

         d.       Mitigation. The Employee shall not be required to mitigate the
                  amount of any payment provided for in this Paragraph 7 of this
                  Agreement by seeking other employment or otherwise. However,
                  the amount of any payment or benefit provided for in this
                  Paragraph 7 shall be reduced by any compensation earned by the
                  Employee as a result of employment by another employer and as
                  provided in Paragraph 7(c)(ii) hereof.

8.       Term. This Agreement shall be binding and enforceable against Employer
         and Employee immediately upon its execution by both such parties. The
         stated term of this Agreement and the employment relationship created
         hereunder shall begin on January 1, 2000 (with employee to be bound by
         confidentiality and other provisions set forth in Paragraph 4 herein to
         the extent confidential information is provided to Employee prior to
         such date), and shall remain in effect for one (1) year thereafter,
         unless sooner terminated in accordance with Paragraph 5 hereof. This
         Agreement shall be deemed to be renewed for a month-to-month term after
         its initial term ("Renewal Term") unless the parties execute an express
         written renewal agreement which specifies a different term.

         a.       Notwithstanding any provision of this Agreement to the
                  contrary, the parties' respective rights and obligations under
                  Paragraph 7 shall survive any termination or expiration of
                  this Agreement or the termination of the Employee's employment
                  following a Change of Control for any reason whatsoever.

9.       Remedies. Each of the parties to this Agreement will be entitled to
         enforce its rights under this Agreement specifically, to recover
         damages by reason of any breach of any provision of this Agreement and
         to exercise all other rights existing in its favor. Notwithstanding
         Paragraph 10 below, the parties hereto agree and acknowledge that money
         damages may not be an adequate remedy for any breach of the provisions
         of this Agreement and that any party may in its sole discretion apply
         to any court of law or equity of competent jurisdiction for specific
         performance and/or injunctive relief in order to enforce or prevent any
         violations of the provisions of this Agreement.

10.      Arbitration. Except as Provided in Paragraph 9 above, any controversy
         or claim arising out of or relating to this Agreement or relating to
         Employee's rights, compensation and responsibilities as an employee
         shall be determined by arbitration in Dallas County, Texas in
         accordance with the rules of the American Arbitration Association then
         in effect. The arbitration shall be submitted to a single arbitrator
         selected in accordance with the American Arbitration Association's
         procedures then in effect for the selection of employment arbitrators.
         This Paragraph 10 shall survive termination of this Agreement for any
         reason.

11.      Assignment. This Agreement is personal to Employee and may not be
         assigned in any way by Employee without the prior written consent of
         Employer. This Agreement shall not be assignable or delegable by
         Employer, other than to an affiliate of Employer;


                                       12
<PAGE>   13


         provided, however, that in the event of the merger or consolidation of
         Employer the obligations of Employer hereunder shall be binding upon
         the surviving or resulting entity of such merger of consolidation. The
         rights and obligations under this Agreement shall inure to the benefit
         of and shall be binding upon the heirs, legatees, administrators and
         personal representatives of Employee and upon the successors,
         representatives and assigns of Employer.

12.      Severability and Reformation. The parties hereto intend all provisions
         of this Agreement to be enforced to the fullest extent permitted by
         law. If, however, any provision of this Agreement is held to be
         illegal, invalid, or unenforceable under present or future law, such
         provision shall be fully severable, and this Agreement shall be
         construed and enforced as if such illegal, invalid, or unenforceable
         provision were never a part hereof, and the remaining provisions shall
         remain in full force and effect and shall not be affected by the
         illegal, invalid, or unenforceable provision or by its severance.

13.      Notices. All notices and other communications required or permitted to
         be given hereunder shall be in writing and shall be deemed to have been
         duly given if delivered personally, mailed by certified mail (return
         receipt requested) or sent by overnight delivery service, cable,
         telegram, facsimile transmission or telex to the parties at the
         following addresses or at such other addresses as shall be specified by
         the parties by like notice:

                  If to Employer:   J. Raymond Bilbao
                                    General Counsel & Secretary
                                    1155 Kas Drive, Suite 100
                                    Richardson, Texas 75081

                  If to Employee:   W. Michael Smith
                                    3236 Langley Drive
                                    Plano, Texas  75025

         Notice so given shall, in the case of notice so given by mail, be
         deemed to be given and received on the fourth calendar day after
         posting, in the case of notice so given by overnight delivery service,
         on the date of actual delivery and, in the case of notice so given by
         cable, telegram, facsimile transmission, telex or personal delivery, on
         the date of actual transmission or, as the case may be, personal
         delivery.

14.      Further Actions. Whether or not specifically required under the terms
         of this Agreement, each party hereto shall execute and deliver such
         documents and take such further actions as shall be necessary in order
         for such party to perform all of his or its obligations specified
         herein or reasonably implied from the terms hereof.

15.      GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
         ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT
         TO THE CONFLICT OF LAWS (RULES) OR CHOICE OF LAWS (RULES) THEREOF.


                                       13
<PAGE>   14


16.      Entire Agreement and Amendment. This Agreement contains the entire
         understanding and agreement between the parties, and supersedes any
         other agreement between Employee and Employer, whether oral or in
         writing, with respect to the subject matter hereof. This Agreement may
         not be altered, amended, or rescinded, nor may any of its provisions be
         waived, except by an instrument in writing signed by both parties
         hereto or, in the case of an asserted waiver, by the party against whom
         the waiver is sought to be enforced. Any modification of this Agreement
         may only be signed on behalf of Employer by the President of Employer.

17.      Counterparts. This Agreement may be executed in counterparts, with the
         same effect as if both parties had signed the same document. All such
         counterparts shall be deemed an original, shall be construed together
         and shall constitute one and the same instrument.

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

EMPLOYER:

HIGHWAYMASTER COMMUNICATIONS, INC.

By:      /s/  JANA AHLFINGER BELL
         ------------------------
         JANA AHLFINGER BELL,
         President and Chief Executive Officer

EMPLOYEE:


/s/  W. MICHAEL SMITH    03/15/2000
-----------------------------------


                                       14
<PAGE>   15


                                     ANNEX A

                     GROSS-UP PAYMENT PROCEDURAL PROVISIONS

                  (a) Subject to the provision of Paragraph (e) hereof, all
determinations required to be made under Paragraph 7(c)(iii) of the Agreement,
including whether an Excise Tax is payable by the Employee and the amount of
such Excise Tax and whether a Gross-Up Payment is required to be paid by
Employer to the Employee and the amount of such Gross-Up Payment, if any, shall
be made by a Top 5 accounting firm (the "Accounting Firm") selected by the
Employee in his sole discretion. The Employee shall direct the Accounting Firm
to submit its determination and detailed supporting calculations to both
Employer and the Employee within thirty (30) calendar days after the Termination
Date, if applicable, and any such other time or times as may be requested by
Employer or the Employee. If the Accounting Firm determines that any Excise Tax
is payable by the Employee, Employer shall pay the required Gross-Up Payment to
the Employee within fifteen (15) business days after receipt of such
determination and calculations with respect to any Payment to the Employee. If
the Accounting Firm determines that no Excise Tax is payable by the Employee, it
shall, at the same time as it makes such determination, furnish Employer and the
Employee an opinion that the Employee has substantial authority not to report
any Excise Tax on his federal, state or local income or other tax return. As a
result of the uncertainty in the application of Section 4999 of the Code (or any
successor provision thereto) and the possibility of similar uncertainty
regarding applicable state or local tax law at the time of any determination by
the Accounting Firm hereunder, it is possible that Gross-Up Payments which shall
not have been made by Employer should have been made (an "Underpayment"),
consistent with the calculations required to be made hereunder. In the event
that Employer exhausts or fails to pursue its remedies pursuant to Paragraph (e)
hereof and the Employee thereafter is required to make a payment of any Excise
Tax, the Employee shall direct the Accounting Firm to determine the amount of
the Underpayment that has occurred and to submit its determination and detailed
supporting calculations to both Employer and the Employee as promptly as
possible. Any such Underpayment shall be promptly paid by Employer to, or for
the benefit of, the Employee within fifteen (15) business days after receipt of
such determination and calculations.

                  (b) Employer and the Employee shall each provide the
Accounting Firm access to and copies of any books, records and documents in the
possession of Employer or the Employee, as the case may be, reasonably requested
by the Accounting Firm, and otherwise cooperate with the Accounting Firm in
connection with the preparation and issuance of the determinations and
calculations contemplated by Paragraph (a) hereof. Any determination by the
Accounting Firm as to the amount of the Gross-Up Payment shall be binding upon
Employer and the Employee.

                  (c) The federal, state and local income or other tax returns
filed by the Employee shall be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the Excise Tax payable by
the Employee. The Employee shall make proper payment of the amount of any Excise
Payment, and at the request of Employer, provide to Employer true and correct
copies (with any amendments) of his federal income tax return as filed with the
Internal Revenue Service and corresponding state and local tax returns, if
relevant, as filed with the applicable taxing authority, and such other
documents reasonable requested by


                                       15
<PAGE>   16


Employer, evidencing such payment. If prior to the filing of the Employee's
federal income tax return, or corresponding state or local tax return, if
relevant, the Accounting Firm determines that the amount of the Gross-Up Payment
should be reduced, the Employee shall within fifteen (15) business days pay to
Employer the amount of such deduction.

                  (d) The fees and expenses of the Accounting Firm for its
services in connection with the determinations and calculations contemplated by
Paragraph (a) hereof shall be borne by Employer. If such fees and expenses are
initially paid by the Employee, Employer shall reimburse the Employee the full
amount of such fees and expenses within fifteen (15) business days after receipt
from the Employee of a statement therefor and reasonable evidence of his payment
thereof.

                  (e) The Employee shall notify Employer in writing of any claim
by the Internal Revenue Service or any other taxing authority that, if
successful, would require the payment by Employer of a Gross-Up Payment. Such
notification shall be given as promptly as practicable but no later than ten
(10) business days after the Employee actually receives notice of such claim and
the Employee shall further apprise Employer of the nature of such claim and the
date on which such claim is requested to be paid ( in each case, to the extent
known by the Employee). The Employee shall not pay such claim prior to the
earlier of (i) the expiration of the thirty (30) calendar-day period following
the date on which he gives such notice to Employer and (ii) the date that any
payment of amount with respect to such claim is due. If Employer notifies the
Employee in writing prior to the expiration of such period that it desires to
contest such claim, the Employee shall:

                  (i) provide Employer with any written records or documents in
         his possession relating to such claim reasonably requested by Employer;

                  (ii) take such action in connection with contesting such claim
         as Employer shall reasonable request in writing from time to time,
         including without limitation accepting legal representation with
         respect to such claim by an attorney competent in respect of the
         subject matter and reasonably selected by Employer;

                  (iii) cooperate with Employer in good faith in order
         effectively to contest such claim, and

                  (iv) permit Employer to participate in any proceedings
         relating to such claim;

provided, however, that Employer shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such
contest and shall indemnity and hold harmless the Employee, on an after-tax
basis, for and against any Excise Tax or income tax, including interest and
penalties with respect thereto, imposed as a result of such representation and
payment of costs and expenses. Without limiting the foregoing provisions of this
Paragraph (e), Employer shall control all proceedings taken in connection with
the contest of any claim contemplated by this Paragraph (e) and, at its sole
option, may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim
(provided, however, that the Employee may participate therein at his own


                                       16
<PAGE>   17


cost and expense) and may, at its option, either direct the Employee to pay the
tax claimed and sue for a refund or contest the claim in any permissible manner,
and the Employee agrees to prosecute such contest to a determination before any
administrative tribunal, in a count of initial jurisdiction and in one or more
appellate courts, as Employer shall determine; provided, however, that if
Employer directs the Employee to pay the tax claimed and sue for a refund,
Employer shall advance the amount of such payment to the Employee on an
interest-free basis and shall indemnify and hold the Employee harmless, on an
after-tax basis, from any Excise Tax or income or other tax, including interest
or penalties with respect thereto, imposed with respect to such advance; and
provided further, however, that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Employee with respect
to which the contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, Employer's control of any such contested claim
shall be limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and the Employee shall be entitled to settle or contest, as
the case may be, any other issue raised by the Internal Revenue Service or any
other taxing authority.

                  (f) If, after the receipt by the Employee of an amount
advanced by Employer pursuant to Paragraph (e) hereof, the Employee receives any
refund with respect to such claim, the Employee shall (subject to Employer's
complying with the requirements of Paragraph (e) hereof) promptly pay to
Employer the amount of such refund (together with any interest paid or credited
thereon after any taxes applicable thereto). If, after the receipt by the
Employee of an amount advanced by Employer pursuant to Paragraph (e) hereof, a
determination is made that the Employee shall not be entitled to any refund with
respect to such claim and Employer does not notify the Employee in writing of
its intent to contest such denial or refund prior to the expiration of thirty
(30) calendar days after such determination, then such advance shall be forgiven
and shall not be required to be repaid and the amount of any such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment required to be
paid by Employer to the Employee pursuant to this Paragraph 7(c)(iii) of the
Agreement.

----------------