<PAGE>


                                                                   EXHIBIT 10.41


                            CONSULTING AGREEMENT AND
                       TERMINATION OF EMPLOYMENT AGREEMENT

         This CONSULTING AGREEMENT and TERMINATION OF EMPLOYMENT AGREEMENT (the
"Agreement") is made and executed the 23 day of February 1999, between JOHN T.
CONNOR ("Connor") and TRANSCRYPT INTERNATIONAL, INC., a Delaware corporation
(the "Company").

         WHEREAS, Connor is presently serving as interim Chief Executive Officer
("CEO") at the request of the Board of Directors and Chairman of the Company
pursuant, in part, to an Employment Agreement dated July 23, 1997 (the
"Employment Agreement") attached as Exhibit "A" hereto.

         NOW, THEREFORE, the parties hereby agree as follows:

         AMENDMENT TO EMPLOYMENT AGREEMENT. Section 1 of the Employment
Agreement is modified in its entirety to read as follows:

                  Section 1. CONSULTING AGREEMENT AND TERM. The term of the
         Employment Agreement as Chairman of the Board is terminated as of the
         end of the day of March 25, 1999 due to the hiring of a new CEO and the
         consolidation of the President and Chairman of the Board positions. The
         interim CEO role also ends as of the date of employment of the new CEO.

         Upon the expiration of the Employment Agreement on December 31, 1998,
and following the cessation of Employee's employment, the Company shall provide
the following:

         (a)      UNUSED VACATION. The Company will pay Employee the full amount
                  of Employee's accrued but unused vacation time, which is
                  agreed upon to be 360 hours at December 31, 1998, plus any
                  vacation earned in 1999.

         (b)      COMPANY PROPERTY. The Company will give Employee the laptop
                  computer, fax machine, printer and cellular phone which belong
                  to the Company but which the Employee currently utilizes in
                  his consultant and board status.

         (c)      OPTIONS. It is agreed upon that the date for exercise of
                  Employee's option will continue until February, 2002 under the
                  terms of the Option Agreement dated February 1, 1992. This is
                  provided due to Connor's dual board and officer status for a
                  seven (7) year period.


<PAGE>


         (d)      INDEMNIFICATION. It is agreed that the Indemnification
                  Agreement entered into between the parties on October 7, 1996
                  will remain in full force and effect during the term of this
                  Agreement.

         The following sections are added to the Employment Agreement as
follows:

         SECTION 16. CONSULTING AGREEMENT. Employee and the Company hereby enter
into a Consulting Agreement (hereinafter and for the purposes of all services
the Employee shall perform as an independent contractor under the Consulting
Agreement and for the purposes of all provisions of this Agreement which apply
to the Company and the Employee after December 31, 1998, the Employee shall be
referred to herein as "Consultant").

         The terms of the Consulting Agreement are as follows:

         (a)      SERVICES. Consultant will perform services at the direction of
                  the new CEO of the Company as an independent contractor.

         (b)      TERM. The term of the Consulting Agreement shall commence on
                  March 26, 1999 and run for one year, to March 25, 2000.
                  Consultant shall not be required to perform more than 500
                  hours of services for the Company during the term of the
                  Consulting Agreement.

         (c)      COMPENSATION. Consultant shall be compensated $100,000.000,
                  paid in equal installments on a monthly basis, for services
                  performed pursuant to the Consulting Agreement.

         (d)      LOCATION. Consultant will perform the majority of his services
                  pursuant to the Consulting Agreement while located in the
                  State of Florida. Consultant shall not have an office at the
                  Company, but will perform his services under the Consulting
                  Agreement in whatever location Consultant determines is
                  appropriate at his sole discretion.

         (e)      SECRETARIAL SUPPORT. Upon Consultant's reasonable request, the
                  Company will provide Consultant secretarial support services
                  utilized by Consultant in conjunction with his performance of
                  services pursuant to the Consulting Agreement.

         (f)      EXPENSES. Upon the Consultant's reasonable request, the
                  Company will reimburse the Consultant for travel expenses and
                  other out-of-pocket expenses incurred by the Consultant in
                  conjunction with his performance of services pursuant to the
                  Consulting Agreement.


<PAGE>


         (g)      BENEFITS. Except as specifically set forth in this Agreement,
                  the Consultant, as an independent contractor providing
                  services pursuant to the Consulting Agreement, shall not be
                  eligible for any employee benefits offered by the Company and
                  shall not be eligible to participate in any of the Company's
                  employee benefit plans, except Section 17 as stated below.

         SECTION 17. HEALTH INSURANCE UPON TERMINATION. Upon the expiration of
the Employment Agreement on March 25, 1999, the Company shall continue to
provide health insurance for Consultant pursuant to the Company's Health
Insurance Plan, for all his dependents, including any surviving eligible
dependents, as long as Consultant has had a minimum of seven (7) years as a
Transcrypt employee and seven (7) years as a Board of Director. Consultant's
participation in the Company's Health Insurance Plan shall be subject to the
same restrictions and limitations as are applicable to current employees of the
Company participating in the Health Insurance Plan including, without
limitation, the Company's right to modify, amend, change or discontinue the
Health Insurance Plan in any way, at any time and for any reason. The Company
hereby specifically reaffirms and reserves its right to modify, amend, change or
discontinue the Health Insurance Plan in any way, at any time and for any
reason. Cost of insurance will be at rates offered to other employees.

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

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

         NON-ASSIGNABILITY; SUCCESSORS. The obligations of Connor under this
Agreement are not assignable by him. 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.

<PAGE>




         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.



                                                   /s/ John T. Connor
                                     -------------------------------------------
                                           John T. Connor, Chairman of the Board



                                                  /s/ Terry Fairfield
                                     -------------------------------------------
                                     Terry Fairfield, Vice Chairman of the Board