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                                                                   EXHIBIT 10.42


                              EMPLOYMENT AGREEMENT

         This Employment Agreement ("Agreement") is made by and between MICHAEL
E. JALBERT ("Employee") and TRANSCRYPT INTERNATIONAL, INC., a Delaware
corporation ("Company") this 18th day of February, 1999.

         The Company wishes to employ Employee as Chairman, President and Chief
Executive Officer ("CEO") of the Company on the terms set forth in this
Agreement, and Employee desires to be employed by Company in this capacity.
Company and Employee desire to set forth in writing the terms and conditions of
their agreements and understandings.

         THEREFORE, in consideration of the mutual promises set forth herein, it
is mutually agreed between the parties as follows:

         SECTION 1. EMPLOYMENT TERM. The Company hereby employs the Employee and
the Employee hereby accepts employment as President and CEO of the Company on
the terms of this Agreement, commencing as of the date hereof and continuing for
a period of two (2) years, until March 1, 2001, unless terminated earlier in
accordance with the provisions set forth herein. It is expected that you will be
elected Chairman of the Board at the next scheduled board meeting on March 25,
1999. Following the initial term of employment, this Agreement may be renewed
for additional two (2) year terms. At the expiration of each term (the initial
two year term or each two year extension period), employment shall be
automatically renewed for an additional two (2) year term unless written notice
to the contrary is given by the Company or the Employee by November 1st of each
year preceding the March 1st termination date. The provisions of the Agreement
shall apply during the initial term and any renewals of the term.

         SECTION 2. DUTIES AND AUTHORITY. The Employee's duties shall be as
determined by the Board of Directors. The duties of Chairman, President and CEO
are generally set forth in the job description for such position, and such
duties may change from time to time.

         SECTION 3.   COMPENSATION.

         A.           BASE SALARY. Employee will receive a base salary of Two
                  Hundred Ninety-Five Thousand Dollars ($295,000.00) per year,
                  paid biweekly, as long as Employee is employed with the
                  Company. Such base salary will be subject to annual review,
                  taking into consideration employee's performance during the
                  preceding year, base salary adjustments for the executive
                  staff and other internal and external factors as described in
                  the corporate bylaws and public document filings.

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         B.           BONUS. Employee will receive a signing bonus of One 
                  Hundred Fifty Thousand Dollars ($150,000.00) at the date of 
                  employment as a result of compensation lost from Employee's 
                  current employer. If the Company meets or exceeds the annual
                  objectives set forth for Employee by the Board of Directors,
                  then the Employee will receive an annual bonus at the
                  discretion of the Board of Directors, which shall be targeted
                  at fifty percent (50%) of base salary. The bonus will be paid
                  annually in February. Employee will also receive an additional
                  $100,000.00 bonus on the first year anniversary of his date of
                  employment.

         C.       STOCK INCENTIVE OPTIONS. The Company grants to Employee an
                  option to purchase Four Hundred Thousand (400,000) Shares of
                  Common Stock at a strike price to be set at the closing price
                  of TRII stock on the first day of employment (March 1, 1999).
                  The terms of said Option Agreement is set forth in the
                  Non-Qualified Stock Option Agreement, attached as Exhibit A.
                  In the event of any inconsistencies or conflict between the
                  Agreement and Exhibit A, then the terms of this Agreement
                  shall control. The Company will take all steps necessary to
                  ensure that all shares are freely transferable, subject to any
                  volume restrictions imposed by federal law on the transfer of
                  Employee's shares. One hundred thousand (100,000) of the
                  shares will vest upon Employee's first day of employment. One
                  hundred thousand (100,000) of the shares will vest upon
                  Employee's first anniversary with the Company. One hundred
                  thousand (100,000) of the shares will vest upon Employee's
                  second anniversary with the Company. One hundred thousand
                  (100,000) of the shares will vest upon Employee's third
                  anniversary with the Company.

         D.       ADDITIONAL BENEFITS. Employee also will receive such
                  additional employee benefits commensurate with his position,
                  including those that the Company may from time to time make
                  available to its executive officers, including 4 weeks paid
                  vacation, qualified profit-sharing plans, employee group
                  insurance and disability insurance. In addition, the Company
                  shall provide Employee a one million dollar ($1,000,000) life
                  insurance policy with the beneficiary(ies) of such policy
                  selected by Employee.


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         E.            WITHHOLDINGS. All payments made to Employee pursuant to
                  this Agreement shall be reduced by all required federal, state
                  and local withholdings for taxes and similar charges and by 
                  all contributions or payments required to be made by Employee
                  in connection with any employee benefit plan maintained by the
                  Company.

         SECTION 4. RELOCATION REIMBURSEMENT. Employee will be provided a
relocation package pursuant to the Relocation Policy for Officers, attached as
Exhibit B, except that the Company will also provide a travel allowance for
Employee's spouse in connection with the relocation, provide two house hunting
trips, and will cover the costs of moving the Employee's motor vehicles and
storing for a reasonable period of time Employee's household goods (should
storage be necessary). Employee is expected to permanently relocate to Lincoln,
Nebraska within one year of the date of this Agreement.

         SECTION 5. REIMBURSEMENT FOR EXPENSES. Employee is expected to incur
certain expenses on behalf of the Company for travel, promotion, telephone,
entertainment and similar items. The Company will reimburse the Employee for all
ordinary, necessary and reasonable amounts of such expenses, as determined by
the Board of Directors, incurred by Employee. Such amounts shall be payable
promptly upon receipt of reasonable written documentation signed by the Employee
itemizing such expenses.

         SECTION 6. INDEMNIFICATION. Employee shall be indemnified and held
harmless by the Company to the fullest extent authorized by the General
Corporation Law of the State of Delaware, as the same exists or may hereafter be
amended (however, in the case of any such amendment, only to the extent that
such amendment permits the Company to provide broader indemnification rights
than such law permitted the Company to provide prior to such amendment). The
Company's bylaws, attached as Exhibit C, contain an indemnification procedure
for directors and officers of the Company. Generally, if Employee is made or is
threatened to be made a party to any action, suit or proceeding relating to his
employment or service as a director of the Company, he shall have the right to
select individual counsel and he shall be indemnified and held harmless by the
Company against all expenses, liability and loss reasonably incurred in
connection with such action. Employee has the right to bring suit against the
Company if a claim made in accordance with the Company's bylaws is not paid in
full within sixty (60) days after a written claim has been received, except in
the case of a claim for an advancement of expenses, in which case the applicable
period is twenty (20) days. The Company shall also maintain directors' and
officers' liability insurance in an amount sufficient to cover any claims made
against Employee.

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         SECTION 7.        TERMINATION / SEVERANCE

         A.                The Company shall have the right to terminate this 
                  Agreement, upon thirty (30) days written notice, if the 
                  following events occur:

                  1.       The determination by the Board of Directors that the
                           Employee has become disabled, and cannot complete the
                           essential functions of the position with reasonable
                           accommodation and is unable to continue his service
                           to the Company; or

                  2.       The Employee's death; or

                  3.       The determination by the Board of Directors that
                           there is "good cause" for termination of this
                           Agreement. For purposes of the Agreement, "good
                           cause" means the Employee's willful neglect of his
                           duties under this Agreement and the job duties as
                           assigned by the Board of Directors, theft or
                           misappropriation of the Company's assets by the
                           Employee, fraud of the Employee or gross
                           insubordination. The Company shall provide Employee
                           written notice of and a reasonable opportunity to
                           cure anything that the Company believes constitutes
                           willful neglect of duties or gross insubordination.

         Upon termination pursuant to section 7A1 or 7A2, the Company shall pay
         Employee (or, in the event of termination due to Employee's death, his
         estate), a lump sum severance payment equal to one year's base salary
         (at the time of termination). In addition, in the event of termination
         under section 7A1, the Company shall continue to provide all benefits
         described herein for one year after termination. No severance payment
         or benefit continuation will be provided if employee is terminated
         pursuant to section 7A3.

         B.       Either party may terminate this Agreement upon (60) days'
                  prior written notice without good cause. In the event of a
                  termination by the Company without good cause the Company
                  shall continue to provide all benefits for one year after
                  termination and shall pay Employee a lump sum severance
                  payment equal to the greater of: 1) his annual base salary (at
                  the time of termination) or, 2) his base salary (at the time
                  of termination) for the remaining term of the then current
                  Agreement. If the Company elects not to renew the Agreement
                  for two new periods of two years each (i.e., beyond February
                  2005), the Company shall pay Employee a lump sum severance
                  payment equal to his


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                  annual base salary (at the time of termination), and shall
                  continue to provide all benefits for one year after
                  termination. If the employee terminates the Agreement within
                  the first twelve (12) months, he must repay the net amount of
                  the $150,000 signing bonus he receives after paying taxes on
                  that bonus and cancel any vested options. Upon commencement of
                  full time employment with a different company as described in
                  the attached non-compete agreement, or full time self
                  employment, all benefits shall cease. Employee's COBRA
                  termination date shall be the date all benefits cease.

         All cash severance amounts described in sections 7A through 7B shall be
         paid to Employee upon the termination of his employment.

         C.       Change in Control. For the purposes of this Agreement, "change
                  in control" means: 1) A change in the ownership of the shares
                  of the Company that results in a change in a majority of the
                  board of directors; or, 2) a sale, assignment or transfer of
                  all or substantially all of the assets of the Company. If
                  there is a change in control, then the Company may terminate
                  this Agreement upon thirty (30) days written notice. If there
                  is a change in control and a material diminishment in the
                  employee's position, duties, or responsibilities, that is not
                  mutually agreed among the parties, then Employee may terminate
                  this Agreement upon thirty (30) days written notice. Upon
                  notice of termination by either party pursuant to this section
                  7C, all of Employee's stock options shall vest immediately.
                  Upon termination by either party pursuant to this section 7C,
                  the Company shall pay to Employee a lump sum severance payment
                  equal to three years of base salary (at the time of
                  termination), and shall consider providing a transaction
                  bonus. In addition, the Company shall continue to provide all
                  benefits for one year after termination.

         SECTION 8. AUTOMOBILE ALLOWANCE. The Company shall pay a car allowance
of $750.00 per month during the term of this Agreement.

         SECTION 9. ENTIRE AGREEMENT. This Agreement contains the entire
understanding and agreement between the Company and the Employee and supersedes
any prior agreements and negotiations between them pertaining to the Employee's
terms and conditions of employment with the Company. There are no
representations, warranties, promises, covenants or understandings between the
Company and the Employee with respect to such employment other than those
expressly set forth in this Agreement. This Agreement takes precedence over
other conflicting agreements with the Employee.


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         SECTION 10. GOVERNING LAW. This Agreement shall be governed by the laws
of the State of Nebraska.

         SECTION 11. NON-ASSIGNABILITY; SUCCESSORS. The obligations of the
Employee under this Agreement are not assignable by him. This Agreement is
personal in nature and may not be assigned by the Company without the written
consent of the Employee, except that the consent of the Employee shall not be
reasonably withheld in connection with the sale to any person, partnership,
corporation or other entity of substantially all the assets of the company,
provided that the assignee assumes all the liabilities of the Company hereunder.
Except as provided in the immediately preceding sentence, this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
successors.

         SECTION 12. NOTICES. Any notice required to be given in writing by any
party to this Agreement may be personally delivered or mailed by registered or
certified mail to the last known address of the party to be notified. Any such
notice personally delivered shall be effective upon delivery and any such notice
mailed shall be effective four (4) business days after the date of mailing by
registered or certified mail with postage prepaid to the last known address of
the party to be notified.

         SECTION 13. SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions of
this Agreement, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provision were omitted.

         SECTION 14. HEADINGS. The Section and other headings contained in this
Agreement are for reference purposes only and shall not affect the
interpretation of this Agreement.

         SECTION 15. CONSTRUCTION. Whenever required by the context, references
to the singular shall include the plural, and the masculine gender shall include
the feminine gender.

         SECTION 16. RESTRICTIVE COVENANTS. Employee shall execute, concurrently
with this Agreement, a Confidentiality and Non Compete Agreement in the form
attached as Exhibit D.

         SECTION 17. AMENDMENTS. No changes, modifications, waivers, discharges,
amendments or additions to this Employment Agreement shall be binding unless it
is in writing and signed by the Company and the Employee.


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         IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf and the Employee has signed his name hereto, effective as
of the date first written above.

                          TRANSCRYPT INTERNATIONAL, INC., a Delaware corporation


                          BY:  /s/ Thomas  R. Thomsen
                             -------------------------------------------------
                                   THOMAS R. THOMSEN

                          Its      DIRECTOR, CHAIR OF SEARCH COMMITTEE
                             -------------------------------------------------



                              /s/ Michael E. Jalbert
                             -------------------------------------------------
                                  Michael E. Jalbert