Document:

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                                                                   EXHIBIT 10.39

                            JANUS CAPITAL CORPORATION
                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT, is effective January 1, 1998, by and between Janus
Capital Management LLC, a Delaware limited liability company (the "Company"),
and Helen Y. Hayes (the "Employee"), as amended and restated.

                                    RECITALS:

         A. The Employee's services are valued by the Company and the Company
and the Employee desire to set forth in this Agreement the terms and conditions
for the continuation of such employment during the term hereof.

         B. The Company desires to compensate the Employee in a manner which
reflects the success of the Employee's investment results.

         C. The Employee and the Company desire that the Employee shall be
compensated on the terms and conditions set forth herein.

         D. The parties desire to amend this Agreement to reflect the occurrence
of the Change of Control of the Company (as defined below) and to remove
unnecessary provisions.

         In consideration of the premises and mutual covenants herein contained,
it is agreed as follows:

                                   AGREEMENT:

         1. Employment. The Company shall employ the Employee as a portfolio
manager upon the terms and conditions set forth herein. The primary place of
employment shall be at the Company's principal offices in Denver, Colorado, or
at such other location as the Company and the Employee may agree.

         2. Term. The term of this Agreement commenced on January 1, 1998 and
shall expire on April 1, 2005.

         3. Duties. The Employee shall, during the Employee's employment with
the Company:

                  (a) Faithfully and diligently do and perform all such acts and
         duties and furnish such services consistent with the Employee's
         position as a portfolio manager and as the Board of Directors or the
         Chief Executive Officer ("CEO") of the Company shall direct; and

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                  (b) Devote the Employee's full professional time, energies and
         skills to the business of the Company and to the promotion of the
         Company's best interests, except for vacations and leaves of absence
         made necessary because of illness.

During the term of this Agreement, the Company shall not be entitled to reassign
the Employee to the position of senior research analyst.

         4. Fixed Salary. The Employee's base annual salary for calendar year
1998 shall be $500,000 ("Fixed Salary"). Thereafter, the Employee's Fixed Salary
shall be subject to review on an annual basis by the CEO of the Company or the
Board of Directors of the Company (or a committee designated by the Board to
make such review). The Employee's Fixed Salary may be increased or decreased as
a result of such review; provided, however, that the Employee's Fixed Salary
shall not be decreased unless there has been a substantial reduction in the
character of the duties assigned to the Employee or in the Employee's level of
work responsibility. The Employee's Fixed Salary shall be prorated for any
partial year of employment.

         5. Additional Incentive Compensation. The Employee may also receive
additional compensation consistent with the current methodologies used by the
Company to determine incentive compensation and bonuses and consistent with
similarly situated portfolio managers.

         6. Payments. The Employee's Fixed Salary shall be paid at the usual
times for the payment of the Company's employees, but not less frequently than
monthly. The Employee's Additional Incentive Compensation, if any, shall be paid
under the then-existing Company practice. All payments under this Agreement
shall be subject to such withholding deductions as may be required to be made
pursuant to law, government regulation or order, or by written agreement with,
or written consent of, the Employee.

         7. Benefits; Expense Reimbursement; Indemnification.

                  (a) The Employee shall be entitled to participate in such life
         insurance, disability, medical, dental, pension, profit sharing and
         retirement plans and other programs as may be made generally available
         from time to time by the Company for the benefit of executives of the
         Employee's level or its employees generally ("Benefits"). The Employee
         also shall be entitled to paid time off during each consecutive 12
         month period in accordance with the Company's written policy, to be
         taken at such times and for such periods as the Employee and the
         Company shall mutually determine. Paid time off shall not unreasonably
         interfere with the duties required to be rendered by the Employee
         hereunder (except as may be required for illness or injury).

                  (b) The Company shall promptly reimburse the Employee for all
         reasonable expenses incurred in the performance of the Employee's
         duties hereunder, including without limitation, expenses for
         entertainment, travel and use of the telephone. The Employee shall
         submit appropriate documentation for all expenses in accordance with
         the Company's expense reimbursement policies, as in effect from time to
         time.

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                  (c) The Company shall indemnify the Employee to the fullest
         extent permitted under law from and against any expenses (including but
         not limited to attorneys' fees, expenses of investigation and
         preparation and fees and disbursements of the Employee's accountants or
         other experts), judgments, fines, penalties and amounts paid in
         settlement actually and reasonably incurred by the Employee in
         connection with any proceeding in which the Employee was or is made
         party or was or is involved (for example, as a witness) by reason of
         the fact the Employee was or is employed by the Company, except to the
         extent that such expense, judgment, fine, penalty or amount arises from
         the gross negligence or willful misconduct of the Employee.

                  Such indemnification is subject to:

                           (i) the indemnifying party promptly receiving written
                  notice that a claim or liability has been asserted or
                  threatened ("Notice of Claim");

                           (ii) the indemnified party providing reasonable
                  cooperation and assistance in the defense or settlement of a
                  claim; and

                           (iii) the indemnifying party being afforded the
                  opportunity to have the sole control over the defense or
                  settlement of such claim or liability.

                  Unless within ten days after receiving the Notice of Claim,
                  the indemnifying party notifies in writing the indemnified
                  party of its intent to defend against such claim or liability,
                  the indemnified party may defend, settle and/or compromise any
                  such claim or liability, and be indemnified for all losses
                  resulting from such defense, settlement and/or compromise. Any
                  indemnified party also may participate in such defense at its
                  own cost and expense.

                  (d) If any dispute should arise under this Agreement involving
         an effort by the Employee to protect, enforce, or secure rights or
         benefits claimed by the Employee hereunder, the Company shall pay
         (promptly upon demand by the Employee accompanied by reasonable
         evidence of incurrence) all reasonable expenses (including attorneys'
         fees) incurred by the Employee in connection with such dispute, without
         regard to whether the Employee prevails in such dispute except that the
         Employee shall repay the Company any amounts so received if a court
         having jurisdiction shall make a final, nonappealable determination
         that the Employee acted frivolously or in bad faith by such dispute. To
         assure the Employee that adequate funds will be made available to
         discharge the Company's obligations set forth in the preceding
         sentence, the Company has established a trust and shall promptly
         deliver to the trustee of such trust to hold in accordance with the
         terms and conditions thereof that sum which the Company's Board of
         Directors shall have determined is reasonably sufficient for such
         purpose.

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         8. Termination of Employment; Definitions.

                  (a) This Agreement and the Employee's employment with the
         Company shall terminate upon non-renewal of this Agreement under
         paragraph 2 and also under the following circumstances:

                           (i) Immediately upon the Employee's death;

                           (ii) Upon written notice from the Company to the
                  Employee if the Employee has become "Disabled";

                           (iii) Upon written notice from the Company to the
                  Employee for "Cause";

                           (iv) Upon written notice from the Employee to the
                  Company for "Good Reason";

                           (v) Upon not less than 90 days' prior written notice
                  from the Company to the Employee without "Cause"; or

                           (vi) Upon not less than 90 days' prior written notice
                  from the Employee to the Company without "Good Reason".

                  (b) The Employee shall be considered to be "Disabled" or to
         have suffered a "Disability" if the Employee is disabled under the
         terms of the Company's long-term disability policy.

                  (c) "Cause" shall be deemed to exist if and only if:

                           (i) The Employee willfully refuses to obey written
                  directions of the Board of Directors or the CEO of the Company
                  (so long as such directions do not involve a substantial
                  reduction in the character of the duties assigned to the
                  Employee or in the Employee's level of work responsibility or
                  illegal or immoral acts), which refusal continues for a period
                  of 15 days after written notice to the Employee by the Company
                  which notice describes such refusal in reasonable detail and
                  references this paragraph 8(c);

                           (ii) The Employee breaches paragraph 10 of this
                  Agreement;

                           (iii) The Employee commits a criminal offense that
                  constitutes a felony in the jurisdiction in which the offense
                  is committed (excluding any traffic or similar violations); or

                           (iv) The Employee commits an act that constitutes a
                  material violation of federal or state securities laws.

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                  The determination as to whether the Employee has committed a
                  felony for purposes of subparagraph (c)(iii) above or a
                  material violation of federal or state securities laws for
                  purposes of subparagraph (c)(iv) above shall be made in good
                  faith by the Board of Directors of the Company.

                  (d) The Employee shall have "Good Reason" if there occurs
         without the Employee's written consent (except as described below):

                           (i) A material reduction in the duties assigned to
                  the Employee or in the Employee's level of work responsibility
                  or working conditions, unless approved in writing by the
                  Employee and the Company;

                           (ii) A reduction in the Employee's Fixed Salary or a
                  material adverse change in the computation of the Employee's
                  Additional Incentive Compensation pursuant to paragraph 5, as
                  in effect immediately prior to April 2, 2002 (the "Control
                  Change Date");

                           (iii) A failure by the Company or its successor to
                  continue to provide to the Employee any of the Benefits or
                  paid time off referred to in paragraph 7, on substantially the
                  same basis as such Benefits or paid time off were in effect
                  immediately prior to April 2, 2002 (the "Prior Benefits"),
                  unless the Company provides and the Employee is eligible to
                  participate in other benefits which are at least equivalent in
                  all reasonable respects to the Prior Benefits;

                           (iv) A requirement that the Employee be based at a
                  location outside the metropolitan area of Denver, Colorado or
                  other location which was mutually agreed upon by the Company
                  and the Employee, except for required travel on Company
                  business to an extent substantially consistent with the
                  Employee's obligations immediately prior to the Control Change
                  Date; or

                           (v) Any material breach of this Agreement by the
                  Company or its successor which is not cured within 15 days
                  after written notice from the Employee which describes the
                  breach in reasonable detail and references this paragraph
                  8(d).

                  (e) A "Change in Control of the Company" occurred on April 2,
         2002 because Thomas H. Bailey ("THB") no longer had the right to select
         a majority of the Board of Directors of Janus Capital Corporation or
         the Company in accordance with that certain Stock Purchase Agreement by
         and among THB, Bernard E. Neidermeyer III, Michael Stolper, Jack R.
         Thompson and Kansas City Southern Industries, Inc. ("KCSI") dated April
         13, 1984, as subsequently amended and as assigned to Stilwell Financial
         Inc.

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         9. Termination Benefit and Severance Pay.

                  (a) If the Employee's employment terminates either during the
         term of this Agreement or at the expiration of this Agreement, the
         Employee shall be entitled to receive a termination benefit and
         severance pay for the period, if any, set forth in Schedule A.
         Following any termination, regardless of the cause, the Employee shall
         be entitled to receive any Fixed Salary which has been earned but has
         not been paid as of the date of termination, any Additional Incentive
         Compensation which is payable in accordance with the terms of paragraph
         5, and reimbursement in accordance with paragraph 7(b) for expenses
         incurred prior to the termination. The Employee shall have no duty to
         mitigate. The termination benefit and severance pay set forth in
         Schedule A shall not be offset with respect to compensation or benefits
         which may be received by the Employee from a third party.

                  (b) If the Employee is entitled to additional months of
         compensation in accordance with Schedule A, the amount to be paid by
         the Company each month shall consist of one-twelfth of the sum of the
         following amounts:

                           (i) The Employee's annual Fixed Salary;

                           (ii) The amount of the Employee's Additional
                  Incentive Compensation paid or accrued with respect to the
                  last four full calendar quarters preceding the date of the
                  Employee's termination; and

                           (iii) An amount equal to the pension, profit sharing
                  or other retirement or deferred compensation benefits paid or
                  accrued by the Company on behalf of or for the benefit of the
                  Employee with respect to the last full calendar year preceding
                  the date of the Employee's termination.

         Payment of such monthly amounts shall be made at the usual times for
         the payment of the Company's employees for the period, if any, set
         forth in Schedule A. Notwithstanding the foregoing, if the Employee is
         terminated due to Disability, monthly payments shall be reduced by any
         payments received by the Employee following such termination under the
         Company's long-term disability plan or other similar policy maintained
         by the Company.

                  (c) If the Employee is entitled to additional months of
         Benefits in accordance with Schedule A, the Employee shall also be
         entitled to participate in each of the Benefits described in paragraph
         7 (other than pension, profit-sharing or retirement plans and deferred
         compensation arrangements) for the period, if any, set forth in
         Schedule A at the Company's expense. If any such Benefit (other than
         pension, profit-sharing or retirement plans and deferred compensation
         arrangements) cannot reasonably be made available to the Employee, then
         the Employee shall receive an amount in cash equal to (i) the cost to
         the Company of providing any such benefits previously provided by the
         Company which were tax-exempt to the Employee, "grossed up" based upon
         the highest combined federal and applicable state marginal tax rate in
         effect (assuming that the Employee is married

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         and filing a joint return) on the date of payment, and (ii) the cost to
         the Company of providing any such benefits previously provided by the
         Company which were taxable to the Employee. The Company shall determine
         the cost of such benefits in good faith and shall provide reasonable
         documentation to support its findings to the Employee.

                  (d) If the Employee's employment terminates as a result of the
         Employee's death, or if the Employee should die prior to payment of all
         amounts due hereunder, payments shall continue for the period, if any,
         set forth in Schedule A, and payments to be made after the Employee's
         death, including without limitation any payments of additional months
         of compensation in accordance with Schedule A, Additional Incentive
         Compensation in accordance with paragraph 5, shall be paid to the
         Employee's named beneficiary if any, otherwise to the Employee's
         estate.

         10. Restrictive Covenants.

                  (a) The Employee acknowledges that employment as a member of
         the Company's executive or management team or as a member of
         professional staff supporting the Company's executive or management
         team creates a relationship of confidence and trust between the
         Employee and the Company with respect to confidential and proprietary
         information applicable to the business of the Company and its clients.
         The Employee further acknowledges the highly competitive nature of the
         business of the Company. Accordingly, it is agreed that the
         restrictions contained in this paragraph 10 are reasonable and
         necessary for the protection of the interests of the Company and that
         any violation of these restrictions would cause substantial and
         irreparable injury to the Company.

                  (b) During the Employee's employment with the Company, and for
         a period of three years following the date of termination of the
         Employee's employment with the Company for any reason, including
         termination occasioned by the expiration of this Agreement, the
         Employee shall not (nor shall the Employee cause, encourage or provide
         assistance to, anyone else to):

                           (i) Interfere with any relationship which may exist
                  from time to time between the Company, or any affiliate of the
                  Company, and any of its employees, consultants, agents or
                  representatives;

                           (ii) Employ or otherwise engage, or attempt to employ
                  or otherwise engage, in or on behalf of any Competitive
                  Business, any person who is employed or engaged as an
                  employee, consultant, agent or representative of the Company
                  or any affiliate of the Company, or any person who was
                  employed or engaged as an employee, consultant, agent or
                  representative of the Company or any affiliate of the Company
                  within the two-year period immediately preceding the
                  Employee's termination;

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                           (iii) Solicit directly or indirectly on behalf of the
                  Employee or a Competitive Business, the customer business or
                  account of any investment advisory or investment management
                  client to which the Company or any affiliate of the Company
                  shall have rendered service during the two-year period
                  immediately preceding the Employee's termination; or

                           (iv) Directly or indirectly divert or attempt to
                  divert from the Company or any affiliate of the Company any
                  business in which the Company or any affiliate of the Company
                  has been actively engaged during the term hereof or interfere
                  with any relationship between the Company, or any affiliate of
                  the Company, and any of its clients.

                  Notwithstanding the foregoing, the provisions of this
                  paragraph 10(b) shall not apply following termination of
                  employment if the CEO of the Company immediately prior to
                  termination of employment was someone other than the CEO of
                  the Company on January 1, 1998.

                  (c) "Competitive Business" means (A) any business which
         provides investment advisory or investment management services, and (B)
         any business which otherwise competes with the business which was
         conducted or proposed to be conducted by the Company or any affiliate
         of the Company within the two-year period immediately preceding the
         Employee's termination. For purposes of this paragraph 10, "affiliate"
         means any corporation, partnership, limited liability company, trust,
         or other entity which controls, is controlled by or is under common
         control with the Company.

                  (d) The Employee shall have no right to receive any further
         payments under this Agreement which are unpaid at the time of a breach
         of this restrictive covenant by the Employee, and in the event of such
         a breach the Company shall have no further obligation to pay any amount
         to the Employee. Any payments made as described in paragraph 10(b)
         prior to such breach shall be promptly returned upon demand by the
         Company.

                  (e) If any court shall determine that the duration, geographic
         limitations, subject or scope of any restriction contained in this
         paragraph 10 is unenforceable, it is the intention of the parties that
         this paragraph 10 shall not thereby be terminated but shall be deemed
         amended to the extent required to make it valid and enforceable, such
         amendment to apply only with respect to the operation of this paragraph
         10 in the jurisdiction of the court that has made the adjudication.

                  (f) The Employee acknowledges and recognizes the importance to
         the Company of the above covenants and agrees that following
         termination of employment with the Company, at the request of the
         Company from time to time during the three year period referred to in
         paragraph 10(b), the Employee shall advise the Company of the identity
         of the Employee's employer and shall provide a general description, in
         reasonable detail, of the business of such employer and the Employee's
         duties and

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         responsibilities so that the Company may determine whether there has
         been any breach of this Agreement.

         11. Additional Remedies. The Employee acknowledges that the restrictive
covenants of paragraph 10 are reasonable and that irreparable injury will result
to the Company and to its business and properties in the event of any breach by
the Employee of any of those covenants, and that the Employee's continued
employment is predicated on the commitments undertaken by the Employee pursuant
to said paragraph. In the event any of the covenants of paragraph 10 are
breached, the Company shall be entitled, in addition to any other remedies and
damages available, to injunctive relief to restrain the violation of such
covenants by the Employee or by any person or persons acting for or with the
Employee in any capacity whatsoever.

         12. Assignment. This Agreement is personal to the Employee and shall
not be assigned by the Employee. The Employee shall not hypothecate, delegate,
encumber, alienate, transfer or otherwise dispose of the Employee's rights and
duties hereunder. The Company may assign this Agreement without the Employee's
consent to any other entity who, in connection with such assignment, acquires
all or substantially all of the Company's assets or into or with which the
Company is merged or consolidated.

         13. Waiver. The waiver by either party of a breach by the other party
of any provision of this Agreement shall not be construed as a waiver of a
breach of any other provision or any subsequent breach.

         14. Severability. If any clause, phrase, provision or portion of this
Agreement or the application thereof to any person or circumstance shall be
invalid or unenforceable under any applicable law, such event shall not affect
or render invalid or unenforceable the remainder of this Agreement and shall not
affect the application of any clause, provision, or portion hereof to any other
person or circumstance.

         15. Benefit. Subject to the restrictions of paragraph 12, the
provisions of this Agreement shall inure to the benefit of the Company, its
successors and assigns, and shall be binding upon the Company and the Employee,
the Employee's heirs, personal representatives and successors and assigns,
including without limitation the Employee's estate and the executors,
administrators, or trustees of such estate.

         16. Relevant Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Colorado, without regard to the
conflicts of laws principles of such State.

         17. Notices. All notices, requests, demands and other communications in
connection with this Agreement shall be made in writing and shall be deemed to
have been given (i) when delivered by hand, or (ii) 48 hours after mailing at
any general or branch United States Post Office, by registered or certified
mail, postage prepaid, return receipt requested, or (iii) one business day after
deposit for overnight delivery at an express courier service holding itself out
as

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being able to make overnight delivery, in each case addressed as follows, or to
such other address as shall have been designated in writing by the addressee:

                  If to the Company:

                           Janus Capital Corporation
                           ATTN: CEO
                           100 Fillmore Street
                           Denver, Colorado  80206

                  With a copy to the Office of General Counsel

                  If to the Employee:

                           Helen Y. Hayes
                           10 Polo Club Drive
                           Denver, Colorado  80209

         18. Entire Agreement. This Agreement sets forth the entire
understanding of the parties and supersedes all prior agreements, arrangements,
and communications, whether oral or written, pertaining to the subject matters
hereof. This Agreement may only be amended or modified by a writing signed by
both parties. Oral promises or assurances are not effective to enforce, amend or
modify this Agreement.

         19. Survival. The provisions of paragraphs 6, 7(b), 7(c) and 9 through
19 shall survive any termination, expiration or nonrenewal of this Agreement for
such periods as are necessary to enforce the provisions thereof.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective on the date first set forth above.

                                            JANUS CAPITAL MANAGEMENT LLC

                                            By: /s/ Thomas A. Early
                                                --------------------------------
                                                Thomas A. Early, Vice President

                                            EMPLOYEE:

                                            By: /s/ Helen Y. Hayes
                                                --------------------------------
                                                Helen Y. Hayes

                                       10
<PAGE>
                                   SCHEDULE A
                      TERMINATION BENEFIT AND SEVERANCE PAY

        TERMINATION BENEFIT AND SEVERANCE PAY FOLLOWING CHANGE IN CONTROL

<Table>
<Caption>
                                        ADDITIONAL         ADDITIONAL
EVENT OF                                 MONTHS OF          MONTHS OF
TERMINATION                              BENEFITS         COMPENSATION
<S>                                     <C>               <C>

DEATH                                        12                 12

DISABILITY                                   12                 12

TERMINATION BY                                3                NONE
COMPANY FOR CAUSE

TERMINATION BY                               36*                36*
EMPLOYEE FOR
GOOD REASON

NON-RENEWAL BY                                3                NONE
EMPLOYEE

NON-RENEWAL BY                               36*                36*
COMPANY

TERMINATION BY                               36*                36*
COMPANY WITHOUT
CAUSE

TERMINATION BY                                3                 NONE
EMPLOYEE WITHOUT
GOOD REASON
</Table>

*For an Event of Termination occurring within 3 years following the
Change-in-Control; reduced to 12 months for an Event of Termination occurring
thereafter.

                                       11<PAGE>
                                                                    EXHIBIT 10.4

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (the "Agreement"), dated as of October 25,
2002, is entered into by and between TELEX COMMUNICATIONS, INC., a Delaware
corporation (the "Company"), and NED C. JACKSON ("Executive").

                                  INTRODUCTION

         The Company desires to employ Executive, and Executive desires to
accept such employment, under the terms and conditions set forth in this
Agreement.

         In consideration of the mutual covenants contained in this Agreement
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:

                                    ARTICLE I

                            EMPLOYMENT; TERM; DUTIES

         1.1 Employment. The Company agrees to continue the employment of
         Executive as the Chief Executive Officer of the Company under the terms
         set forth in this Agreement. This Agreement supersedes and replaces any
         and all other agreements concerning Executive's employment with the
         Company or any of its affiliates, including, but not limited to the
         Employment Agreement dated August 26, 1998 by and between Executive and
         Telex Communications Group, Inc. ("Group") and the Incentive
         Compensation Agreement dated March 14, 2000 by and between Executive
         and Group, and such other agreements and any other agreements are
         deemed terminated as of the date of this Agreement, with no liability
         for such termination under any such agreement or agreements by the
         Company or its affiliates (including Group) to Executive.

         1.2 Term. Executive's employment under this Agreement shall commence at
         the beginning of the last regular payroll period for the Company in
         December 2002 and terminate on December 31, 2003.

         1.3 Duties. Executive shall perform such executive duties for the
         Company as may be assigned to him from time to time by the Board of
         Directors.

                                   ARTICLE II

                                  COMPENSATION

         2.1 Base Salary. Executive's base salary shall be Four Hundred Fifty
         Thousand and 00/100 Dollars ($450,000.00) ("Base Salary") per year,
         payable by the Company in accordance with the Company's normal payroll
         practices applicable to senior executives, but no less frequently than
         monthly.

<PAGE>

         2.2 Bonus. In addition to the Base Salary, Executive shall be eligible
         to receive a bonus payable under the Company's Management Incentive
         Compensation ("MIC") Plan under such terms as are established by the
         Company's Board of Directors from time to time. Executive's "Minimum,"
         "Target" and "Maximum" bonus payable under such MIC Plan shall be 50%,
         100% and 200%, respectively, of his Base Salary. Executive shall be
         guaranteed payment of the Minimum Bonus for the fiscal year ended
         December 31, 2003, which bonus shall be payable in one lump sum on
         January 1, 2004. In the event the Company achieves performance
         objectives for the fiscal year ended December 31, 2003 that would allow
         Executive to earn more than the Minimum bonus to which he is entitled
         pursuant to the preceding sentence, Executive shall be entitled to
         receive such additional amount, up to and including the Maximum bonus
         amount. Any bonus in excess of the guaranteed Minimum bonus payable
         under this Agreement shall be "earned" based on the Company's receipt
         of audited financial results and as and when approved for payment by
         the Company's Board of Directors.

         2.3 Relocation Expenses. Upon Executive's termination or retirement
         from the Company, or upon Executive's death or disability (as defined
         below), the Company shall pay the actual, reasonable closing costs on
         the sale of Executive's current home in Minnesota and his actual and
         reasonable expenses in connection with the relocation of his household
         goods from Minnesota to Executive's new home.

         2.4 Additional Income Tax Liability. "Additional Income Tax Liability"
         shall mean the amount of federal, state or local taxes that the
         Executive is required to pay in connection with compensation received
         under to Section 2.3. If a payment is made to Executive under Section
         2.3 that causes Additional Income Tax Liability, the Company shall pay
         to Executive the Gross-Up Amount calculated according to the formula in
         Exhibit "A". The Gross-Up Amount shall be reduced by the aggregate
         amount of any tax saving (if any) actually realized by the Executive,
         and Executive shall reimburse such excess to the Company.

         2.5 Business Travel. Executive has the option, when appropriate, to
         travel in "business class" for international flights.

                                   ARTICLE III

                  TERMINATION; REASSIGNMENT; DEATH; DISABILITY

         3.1 Termination by Company With Cause. In addition to any other
         remedies available to the Company at law, in equity or as set forth in
         this Agreement, the Company shall have the right, upon sixty (60) days'
         written notice to Executive, to terminate his employment immediately
         without any further liability or obligation to him in respect of his
         employment (other than its obligation to pay Base Salary actually
         earned and vacation time accrued but unpaid, each calculated as of the
         date of termination; and any accrued prorata MIC Plan bonus that has
         been earned based on the Company's receipt of audited financial
         results, if approved for payment to Executive by the Company's Board of
         Directors), if Executive: (a) breaches any material provision of this
         Agreement; or (b) is convicted of or pleads nolo contendere to any
         felony; or (c) is convicted of or pleads nolo

                                      -2-
<PAGE>

         contendere to any misdemeanor involving moral turpitude and the conduct
         underlying such misdemeanor has a detrimental effect on the Company, as
         determined by the Board of Directors of the Company; or (d) has
         committed any act of fraud, misappropriation of funds or embezzlement
         in connection with his employment (a "Termination With Cause").

                  Executive acknowledges that the Company's obligations to pay
         Base Salary, vacation time, MIC Plan Bonus, and reimbursement of
         certain expenses as described above, together with any rights or
         benefits under any written plan or agreement which have vested on or
         prior to the termination date of Executive's employment under this
         Section 3.1, constitute the only payments which Executive shall be
         entitled to receive from the Company, or any of its affiliates, and
         neither the Company nor any of its affiliates shall have any further
         liability or obligation to him hereunder or otherwise in respect of his
         employment with the Company or any of its affiliates after such
         termination.

         3.2 Termination by Company Without Cause; Voluntary Retirement; or
         Death or Disability of Executive. In the event of any of the following:
         (a) the termination of Executive's employment by the Company at any
         time for any reason other a Termination with Cause (a "Termination
         Without Cause"), (b) the voluntary retirement of Executive from the
         Company, or (c) upon the death or disability of Executive (as defined
         below), the Company shall pay Executive (or Executive's beneficiaries,
         in the event of the death of Executive) an amount equal to the sum of
         the following:

                  (i)      any Base Salary and vacation time that would have
                           been earned and accrued as of the end of the month in
                           which termination, retirement, death or disability
                           occur;

                  (ii)     an amount (the "Severance Payment") equal to a
                           prorata portion (calculated at the end of the month
                           in which termination, retirement, death or disability
                           occur) of (a) Executive's Minimum Bonus, and (b) any
                           additional bonus amount actually "earned" in excess
                           of the Minimum Bonus, up to and including the Maximum
                           Bonus.

                  The Severance Payment shall be made in one lump sum promptly
         following Executive's termination under this Section 3.2 (provided that
         payment of any bonus amount in excess of the prorata Minimum Bonus
         shall be made upon confirmation of such amount following the conclusion
         of the Company's annual audit).

                  In the event of a Termination Without Cause or Executive's
         retirement, Executive shall also be entitled to receive the sum of
         $30,000.00 per month for twelve (12) months, provided that Executive
         agrees to provide consulting services to the Company upon terms
         mutually agreeable to Executive and the Company.

                  Executive acknowledges that the payments and benefits referred
         to in Article II and Section 3.2, together with any rights or benefits
         under any written plan or agreement which have vested on or prior to
         the termination date of Executive's employment under

                                      -3-
<PAGE>

                  Section 3.2, constitute the only payments which Executive
         shall be entitled to receive from the Company or any of its affiliates
         hereunder in the event of any termination of his employment under any
         of the provisions of Section 3.2, and neither the Company nor any of
         its affiliates shall have any further liability or obligation to him.
         At all times, Executive shall be entitled to full indemnification as an
         officer of the Company as provided under Delaware law and the Company's
         Certificate of Incorporation, Bylaws, policies and directors' and
         officers' liability insurance.

                  For the purposes of this Agreement, Executive shall be deemed
         to be "Disabled" or have a "Disability" if, because of Executive's
         physical or mental disability, he has been substantially unable to
         perform his duties under this Agreement for twelve (12) work weeks in
         any twelve (12) month period ("Period of Disability"). The Term shall
         be deemed to have ended as of the close of business on the last day of
         such period. Executive shall be considered to have been substantially
         unable to perform his duties only if he is either (a) unable to
         reasonably and effectively carry out his duties with reasonable
         accommodations by the Company or (b) unable to reasonably and
         effectively carry out his duties because any reasonable accommodation
         which may be required would cause the Company undue hardship and the
         Company has determined not to provide such accommodation for such
         reason. In the event of a disagreement concerning Executive's perceived
         Disability, Executive shall submit to such examinations as are deemed
         appropriate by three practicing physicians specializing in the area of
         Executive's Disability, one selected by Executive, one selected by the
         Company, and one selected by both such physicians. The majority
         decision of such three physicians shall be final and binding on the
         parties. Nothing in this paragraph is intended to limit the Company's
         right to invoke the provisions of this paragraph with respect to any
         perceived Disability of Executive.

                                   ARTICLE IV

                   NON-DISCLOSURE, INVENTIONS AND NON-COMPETE

         4.1 Non-Disclosure. Executive shall not at any time disclose to anyone,
         other than in connection with the business of the Company, any
         confidential or trade secret information about the business of the
         Company ("Confidential Information"); provided, however, that Executive
         may disclose such information (i) at the request of any governmental
         regulatory authority or in connection with an examination of Executive
         by any such authority, (ii) pursuant to subpoena or other court
         process, (iii) when required to do so in accordance with the provisions
         of any applicable law or regulation, or (iv) if such information has
         otherwise been made generally available to the public other than by
         reason of Executive's breach of this paragraph 4.1. Upon termination of
         Executive's employment for any reason, Executive or his legal
         representative shall promptly deliver to the Company all property
         relating to the business of the Company, including all Confidential
         Information, and all copies thereof that are in the possession or
         control of Executive.

         4.2 Non-Disparagement. During Executive's employment with the Company
         and thereafter, Executive agrees not to make any negative or
         disparaging remarks or

                                      -4-
<PAGE>

         comments about the Company, its affiliated or related companies, or any
         of the foregoing entities' directors, officers, employees or products.
         The Company agrees that it shall direct its directors, officers, and
         key employees not to make any negative or disparaging remarks or
         comments about Executive.

         4.3 Injunctive Relief with Respect to Covenants. Executive acknowledges
         that irreparable damage would result to the Company if the provisions
         of Article IV were not specifically enforced, and agrees that the
         Company shall be entitled to any appropriate legal, equitable or other
         remedy, including injunctive relief, a restraining order or other
         equitable relief (without the requirement to post bond) with respect to
         any failure of Executive to comply with the provisions of such Article.

                                    ARTICLE V

                                  MISCELLANEOUS

         5.1 Binding Effect. This Agreement shall be binding upon and inure to
         the benefit of the parties and their respective legal representatives,
         heirs, distributees, successors and assigns; provided that the rights
         and obligations of Executive hereunder shall not be assignable.

         5.2 Notices. Any notice provided for herein shall be in writing and
         shall be deemed to have been given or made when personally delivered or
         three (3) days following deposit for mailing by first class registered
         or certified mail, return receipt requested, or if delivered by
         facsimile transmission, upon confirmation of receipt of the
         transmission, to the address of the other party set forth below or to
         such other address as may be specified by notice given in accordance
         with this Section 5.2:

                  (a)      If to the Company:

                           Telex Communications, Inc.
                           12000 Portland Avenue South
                           Burnsville, Minnesota 55337
                           Attention:  Chief Financial Officer

                           Fax No.:  (952) 887-5588

                  (b)      If to Executive:

                           Ned C. Jackson
                           1976 Pine Ridge Drive
                           West St. Paul, MN  55118

         5.3 Severability. If any provision of this Agreement is invalidated or
         determined to be unenforceable by a court of competent jurisdiction,
         such invalidity or unenforceability shall affect only such provision,
         and this Agreement shall be carried out as if any such invalid or
         unenforceable provision were not contained in this Agreement. In
         addition, any such invalid or unenforceable provision shall be deemed,
         without further action on

                                      -5-
<PAGE>

         the part of the parties, modified, amended or limited to the extent
         necessary to render the same valid and enforceable.

         5.4 No Trust Created. Nothing contained in this Agreement and no action
         taken pursuant to the provisions of this Agreement shall create or be
         construed to create a trust fund of any kind. Any funds that may be set
         aside or provided for in this Agreement shall continue for all purposes
         to be part of the general funds of the Company and no person other than
         the Company shall by virtue of the provisions of this Agreement have
         any interest in such funds. To the extent that any person acquires a
         right to receive payments from the Company under this Agreement, such
         right shall be no greater than the right of any unsecured general
         creditor of the Company.

         5.5 Full Discharge of Company Obligations. The amounts payable to
         Executive under Sections 3.1 and 3.2 following termination of his
         employment shall constitute liquidated damages with respect to any and
         all rights and claims of Executive under this Agreement and, upon
         Executive's receipt of such amounts, the Company shall be released and
         discharged from any and all liability to Executive in connection with
         this Agreement or otherwise in connection with Executive's employment
         with the Company and its affiliates.

         5.6 Arbitration of Disputes. The parties agree that any controversy or
         claim arising out of or relating to this Agreement, or any dispute
         arising out of the interpretation or application of this Agreement,
         which the parties are unable to resolve, shall be finally resolved and
         settled exclusively by arbitration in Minnesota by a single arbitrator
         under the American Arbitration Association's Commercial Arbitration
         Rules then in effect and in accordance with the substantive laws of the
         State of Minnesota. If the parties cannot agree upon an arbitrator,
         then for the sole purpose of selecting an arbitrator, each party shall
         choose its own independent representative and those independent
         representatives shall in turn choose the single arbitrator within
         thirty (30) days of the date of the selection of the first independent
         representative. The parties severally recognize and consent to the
         jurisdiction over each of them by the courts of the State of Minnesota.
         The legal expenses of Executive shall be reimbursed to Executive if an
         award is rendered in favor of Executive or if the arbitrator finds that
         Executive acted reasonably and exercised good faith in demanding
         arbitration of any such dispute.

         5.7 Confidentiality. The parties agree that they will not disclose to
         any other person or entity the terms or conditions of this Agreement
         without the prior written consent of the other party or as required by
         law, regulatory authority or as necessary for either party to obtain
         personal loans or financing. Approval of the Company and of Executive
         shall be required with respect to any press releases regarding this
         Agreement and the employment of Executive.

         5.8 Professional Fees. The Company will pay for reasonable fees of
         Executive's professional advisors in connection with the review and
         negotiation of this Agreement.

         5.9 Waiver. No waiver by either party to this Agreement of a breach or
         default by the other party shall be considered valid unless in writing
         signed by the first party, and no

                                      -6-
<PAGE>

         such waiver shall be deemed a waiver of any subsequent breach or
         default of the same or any other nature.

         5.10 Entire Agreement. This Agreement sets forth the entire agreement
         between the parties with respect to the subject matter hereof, and
         supersedes any and all prior agreements or understanding between the
         Company, Telex Communications Group, Inc. and Executive, whether
         written or oral, fully or partially performed relating to any or all
         matters covered by and contained or otherwise dealt with in this
         Agreement.

         5.11 Amendment. No modification, change or amendment of this Agreement
         or any of its provisions shall be valid unless in writing and signed by
         the party against whom such claimed modification, change or amendment
         is sought to be enforced.

         5.12 Applicable Law. This Agreement, and all of the rights and
         obligations of the parties in connection with the employment
         relationship established hereby, shall be governed by and construed in
         accordance with the substantive laws of the State of Minnesota without
         giving effect to principles relating to conflicts of law.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
         of the day and year first above written.

                                    "COMPANY"

                                    TELEX COMMUNICATIONS, INC.,
                                    a Delaware corporation

                                    By: /s/ Edgar S. Woolard, Jr.
                                        -------------------------

                                    Name:   Edgar S. Woolard, Jr.
                                    Title:  Chairman, Board of Directors

                                    "EXECUTIVE"

                                    /s/ Ned C. Jackson
                                    ------------------
                                    Ned C. Jackson

                                      -7-
<PAGE>

                                   EXHIBIT "A"

                         CALCULATION OF GROSS-UP AMOUNT

         The term "GROSS-UP AMOUNT" is the amount calculated in accordance with
         the following formula:

                           GROSS-UP AMOUNT = (    a   ) - (a)
                                               -------
                                             ( (1 - r) )

                  a =      The amount required to be grossed up under Section
                           2.7.

                  r =      The sum of (x) the highest marginal federal income
                           tax rates applicable to individuals at the time the
                           Additional Tax Payment is required to be made (the
                           "Federal Rate"), plus (y) the product of: (i) the
                           highest marginal Minnesota income tax rates
                           applicable to individuals at the time the Additional
                           Tax Payment is required to be made, multiplied by
                           (ii) one minus the Federal Rate. However, subsection
                           (ii) shall be equal to one (1) if Minnesota income
                           taxes are not deductible for federal income tax
                           purposes at the time the Additional Tax Payment is
                           required to be made.

         For example, if (i) the Additional Income Tax Liability is equal to
         $1,000,000; (ii) the highest Federal Rate applicable to individuals at
         the time the Additional Tax Payment is required to be made is equal to
         40%; (iii) the highest Minnesota income tax rate applicable to
         individuals at the time the Additional Tax Payment is required to be
         made is equal to 9%, then the Gross-Up Amount would equal $831,501.80
         calculated as follows:

                  r = 0.40 + (0.09 x (.60)

                  r = 0.454

                  $831,501.80 =      $1,000,000 - $(1,000,000)
                                     ----------
                                    (1 - 0.454)

         Accordingly, the total compensation paid (compensation plus Gross-Up
         Amount) would equal $1,831,501.80 (i.e., $1,000,000 + $831,501.80).

                                      -8-

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