<PAGE>   1


                                                                  EXHIBIT 10(AE)



                                 AMENDMENT NO. 1
                                     TO THE
                          SECURITIES EXCHANGE AGREEMENT

AMENDMENT NO. 1, dated as of March 7, 2000 (the "Amendment"), to the Securities
Exchange Agreement, dated as of October 9, 1999 (the "Exchange Agreement"),
among NCT Group, Inc., a Delaware corporation (the "Company"), Austost Anstalt
Schaan ("Austost") and Balmore Funds, S.A. ("Balmore"). Austost and Balmore are
referred to collectively herein as the "Exchange Holders." Capitalized terms
used herein without definition shall have the respective meanings specified in
the Exchange Agreement.

                              W I T N E S S E T H:

WHEREAS, the parties hereto are parties to the Exchange Agreement pursuant to
which, inter alia, the Exchange Holders exchanged 533 shares of the common
stock, par value $0.01 per share, of NCT Audio Products ("Audio") for shares of
the common stock, par value $0.01 per share, of the Company (the "Investor
Shares");

WHEREAS, pursuant to Section 1.3 of the Exchange Agreement, based upon the fair
market value of the Company's Common Stock at February 15, 2000, the Exchange
Holders are obligated to return to the Company 13,671,362 shares of Common Stock
(the "Returnable Shares") from the Investor Shares;

WHEREAS, the Exchange Holders and the Company have agreed to amend certain of
the terms and conditions of the Exchange Agreement in order to (1) allow the
Exchange Holders to retain 3,611,111 Returnable Shares in exchange for an
additional 533 shares of Audio common stock from a third party investor (the
"Third Party Shares"), which the Exchange Holders shall deliver to NCT, and
(2) substitute cash payments by the Exchange Holders to the Company in lieu of
the Exchange Holders' obligation to return the remaining Returnable Shares to
the Company pursuant to Section 1.3 of the Exchange Agreement;

WHEREAS, the Exchange Holders and the Company have agreed to enter into this
Amendment for the purpose of setting forth their agreement with respect to such
an amendment; and

WHEREAS, the Exchange Holders and the Company desire to enter into this
Amendment to evidence their mutual agreement with respect thereto and to make
such other changes to the Exchange Agreement, all as specifically provided
herein;

                                      108
<PAGE>   2

NOW, THEREFORE, in consideration of the premises and the mutual agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

1.  Amendment. The Exchange Agreement is hereby amended to add new Sections 1.4
and 1.5 immediately following Section 1.3 as follows:

    "1.4  Return of Third Party Shares.

               (a)  Notwithstanding Section 1.3 above, the Company agrees that
          the Exchange Holders may retain 3,611,111 Returnable Shares in
          exchange for an additional 533 shares of Audio common stock from a
          third party investor (the "Third Party Shares").

               (b)  Exchange Holders, within five business days upon receipt of
          the Third Party Shares, shall deliver such Third Party Shares to the
          Company.

     1.5  Return of Proceeds from Exchange Holder's Disposition.

               (a)  Notwithstanding Section 1.3 above, the Company agrees that
          the Exchange Holders may retain 10,060,251 shares of the Company's
          Common Stock (the "Remaining Returnable Shares"), and the Exchange
          Holders agree to pay the Company up to $10,000,000 in cash from
          proceeds the Exchange Holders realize from their disposition of such
          Remaining Returnable Shares.

               (b)  Exchange Holders, during any one of the first three Trading
          Days (as defined below) of each month and for twelve consecutive
          months (such twelve month period the "Term"; the Term commencing on
          April 1, 2000) shall sell for cash a sufficient number of Remaining
          Returnable Shares at no less than the fair market value of such
          Remaining Returnable Shares (each sale a "Sale of Remaining Returnable
          Shares"), in order to receive cash proceeds from each such Sale of
          Remaining Returnable Shares equal to a minimum of $550,000 and a
          maximum of $3,300,000. Exchange Holders shall pay in cash to the
          Company, within five days of the date of each such Sale of Remaining
          Returnable Shares during the Term, 90% of the cash proceeds received
          by Exchange Holders from each such Sale of Remaining Returnable
          Shares. The total sum paid by Exchange Holders to the Company during
          the Term, pursuant to such Sales of Remaining Returnable Shares, shall
          equal and not exceed $10,000,000; however, if due to fluctuations in
          the fair market value of the Company's Common Stock, the Exchange
          Holders (i) are unable to or did not generate at least $11,000,000 in
          proceeds from such Sales of Remaining Returnable Shares by the
          conclusion of the Term and (ii) have sold all of the Remaining
          Returnable Shares in the open market in accordance with this Section,
          then all of the Exchange Holders' obligations under this Section shall
          terminate.

                                      109
<PAGE>   3
               (d)  Notwithstanding anything contained herein to the contrary,
          if at the end of the Term, any of the Remaining Returnable Shares
          remain in the possession of the Exchange Holders, all such Remaining
          Returnable Shares shall be returned to the Company.

          "Trading Day" shall mean (i) a day on which the Common Stock is traded
          on The NASDAQ Small Cap Market, the NASDAQ National Market or other
          registered national stock exchange on which the Common Stock has been
          listed, or (ii) if the Common Stock is not listed on The NASDAQ Small
          Cap Market, the NASDAQ National Market or any registered national
          stock exchange, a day on which the Common Stock is traded in the
          over-the-counter market, as reported by the OTC Bulletin Board."

2.  Miscellaneous. Except as expressly amended by this Amendment, the terms,
covenants, conditions and agreements of the Exchange Agreement are in all
respects ratified and confirmed and, except as amended hereby, shall continue in
full force and effect.


                 [THIS PORTION OF PAGE INTENTIONALLY LEFT BLANK]

                                      110
<PAGE>   4

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
as of the date first above written.


                                            NCT GROUP, INC.


                                            By: /s/ CY E. HAMMOND
                                                -------------------------------
                                                Name: Cy E. Hammond
                                                Title: Senior Vice President,
                                                       Chief Financial Officer



                                            AUSTOST ANSTALT SCHAAN


                                            By: /s/ THOMAS HACKL
                                                -------------------------------
                                                Name: Thomas Hackl
                                                Title: Representative



                                            BALMORE FUNDS, S.A.


                                            By: /s/ FRANCOIS MORAX
                                                -------------------------------
                                                Name: Francois Morax
                                                Title: Director

                                      111