<PAGE>

                                                                   EXHIBIT 10.1


                        [LITTON CORPORATE LETTERHEAD]

June 21, 2000



Mr. Ronald D. Sugar
35 West Juniper Lane
Moreland Hills, Ohio 44022

Dear Ron:

The purpose of this Letter (the "Letter") is to convey our offer to you for the
position of Litton Industries, Inc.'s ("Litton") President and Chief Operating
Officer ("COO"). You will report to Michael R. Brown, Chairman and Chief
Executive Officer. Your date of hire will be the date this Letter is executed
and delivered to us by you. In December 2000, you will be elected a member of
the Board of Directors ("Board"). On or before December 31, 2001, you will be
elected Chief Executive Officer ("CEO") of Litton. It is contemplated that by
December 31, 2002, or within a reasonable period thereafter, when Litton's
strategic status and management team will support this additional position, you
will also be elected Chairman of the Board. This Offer of Employment is
comprised of the following elements:

1.     COMPENSATION: Your compensation shall consist of your salary and
incentive compensation. Your starting annual salary will be $600,000, payable on
a weekly basis. You will receive your first salary review in September 2000 and
any increase will be effective September 30, 2000. When you are named CEO, your
compensation will be increased to a competitive level for that position. Your
total compensation will be competitive.

2.     HIRING BONUS: You will receive a $250,000 signing bonus (less applicable
statutory deductions) payable within thirty (30) days after your hire date at
Litton.

3.     INCENTIVE BONUS: You will receive a guaranteed bonus of $350,000 to be
paid when Litton bonuses are paid for fiscal year 2000, currently scheduled to
be paid in October 2000. For Litton's fiscal year 2001 (commencing August 1,
2000) and for fiscal years thereafter, you will be eligible to participate in
Litton's annual incentive plan. Under our FY 2000 program, the bonus target for
the COO is 100% of your annual salary. The actual bonus payouts, which are based
on Litton meeting its predetermined financial goals, may range from 0% to 125%
of the maximum opportunity. The incentive bonus structure will not at any time
be less favorable to

<PAGE>


you than the structure for fiscal year 2001, unless the incentive structure is
changed by the Board for all executives based on the Board's analysis of
competitive incentive programs.

4.     COMMON STOCK OPTIONS: (a) You have been granted 50,000 non-qualified
stock options effective upon date of hire. These options will vest in equal
installments over a five (5) year period, subject to the terms of the 1984
Long-Term Stock Incentive Plan ("1984 Stock Plan"). The exercise price will be
the fair market value of Litton common stock on your hire date. You will be
eligible for a stock option grant in September 2000. The September 2000 grant
will be subject to the terms of the 1984 Stock Plan and will be at least 43,000
options. All of the foregoing options will have a ten (10) year term. Any
unvested portion of the foregoing options shall become fully vested and
exercisable upon: (i) a termination of employment without Cause; (ii) a
Constructive Termination Without Cause of employment; (iii) a termination of
employment as a result of your death or Disability; or (iv) a change of control
of Litton (as defined in your Change of Control Employment Agreement). In the
event of any termination without Cause, a Constructive Termination Without
Cause, death or Disability, you will have at least two (2) years to exercise any
of the foregoing options (subject to the end of the stated term of the foregoing
options).

       (b)    You will be eligible for other stock option grants subject to the
terms of the 1984 Stock Plan and any successor plan.

5.     PERFORMANCE-BASED RESTRICTED STOCK: Under the 1984 Stock Plan, we will
offer to you the right to receive a grant of 13,700 shares of Performance-Based
Restricted Stock at the maximum level, which is at 125% of goals (the
"Performance-Based Restricted Stock"). The actual number of shares that will
vest is based on Litton's achievement of certain cash flow return on investment
("CFROI") and internal revenue growth goals for the period beginning with August
1, 2000 and ending July 31, 2003, subject to the terms of the plan. The right to
receive this grant is scheduled for Board of Directors approval in September
2000 and is consistent with current practices. Any unvested portion of the
foregoing Performance-Based Restricted Stock shall become fully vested and
exercisable upon: (i) a termination of employment without Cause; (ii) a
Constructive Termination Without Cause of employment; (iii) a termination of
employment as a result of your death or Disability; or (iv) a change of control
of Litton.

6.     ADDITIONAL COMPENSATION: In consideration for the estimated value for
TRW's vested and unvested stock options, unvested restricted stock, retirement
plans, deferred compensation plans, and Strategic Incentive Grants ("SIG"), the
following is provided (collectively referred to as "Additional Grants"):

       (i)    You will receive, upon commencement of employment, 65,198 shares
              of Litton restricted stock. These shares will vest over seven
              years in equal installments of 9,314 shares on each of your first
              seven anniversary dates of your date of hire, provided you are
              then employed by Litton on the respective date.

                                    2 of 11

<PAGE>

       (ii)   You will be granted, upon commencement of employment, 12,710
              shares of Litton restricted stock. These shares will vest over
              five (5) years, in equal installments of 2,542 shares on each of
              your first five anniversary dates of your date of hire provided
              you are then employed by Litton on the respective date.

       (iii)  You will receive 175,000 additional non-qualified stock options in
              two grants, 100,000, which will be granted effective upon date of
              hire, and 75,000, which will be granted on August 1, 2000. Each
              will vest in equal installments over a five (5) year period and
              have a ten (10) year term, subject to the terms of the 1984 Stock
              Plan. The exercise price for each grant will be the fair market
              value on the date of grant.

       (iv)   You will receive an additional right to receive a grant of 13,700
              shares of Performance-Based Litton Restricted Stock at the maximum
              level, which is 125% of goals. The actual number of shares that
              will vest is based on Litton's achievement of certain CFROI and
              internal revenue growth goals for the period beginning with August
              1, 2000 and ending July 31, 2002, subject to the terms of your
              restricted stock agreement. The right to receive this grant is
              scheduled to be made in September 2000.

              The three issuances of stock described in (i), (ii), and (iii) are
              intended as consideration for the remaining value of your TRW
              performance-based restricted stock grant, and vested and unvested
              stock options. The issuance of Litton restricted stock in (iv) is
              intended as consideration for your TRW SIG payment scheduled for
              payment in 2002, which you will be foregoing.

       (v)    We will implement, upon commencement of employment, an additional
              annual incentive in consideration of the TRW SIG payable in 2001
              with a target amount of $571,975 anticipated to be paid
              mid-October 2001. The actual amount will be based on goal
              achievement agreed to by you and the Chairman of the Board, Mike
              Brown, and will range from 0-150% of the target amount.

       (vi)   We will credit $627,090 effective January 1, 2001 into a deferred
              compensation account under the proposed Litton Executive Deferred
              Compensation Plan, if such plan is approved. If the proposed
              Deferred Executive Compensation Plan is not approved prior to
              January 1, 2001, we will pay you $822,000 in January 2001 to
              equalize your loss for the early payout of your TRW deferred
              compensation.

       (vii)  Under the Litton Industries, Inc., Supplemental Executive
              Retirement Plan ("SERP"), you will be credited with five
              additional years of service under the SERP for both vesting and
              benefit accrual purposes. The signing bonus received by you will
              not be counted for SERP calculation purposes. If the SERP is

                                     3 of 11

<PAGE>

              amended to provide more favorable accruals based on your actual
              service than you would have under the current plan formula with
              the additional five (5) year service credit, then your years of
              service under the amended SERP for benefit credit will commence
              from your date of hire at such time as the amended formula is more
              favorable.

       (viii) If your employment terminates at age 55 or above and the vested
              benefits accrued under the Litton defined benefit pension plans
              and SERP are less than the presently projected benefits under the
              TRW qualified and non-qualified supplemental defined benefit
              pension plans (including the applicable early termination factors)
              at such time (which projections are set forth in Exhibit A
              hereto), Litton will provide an additional benefit to equalize the
              difference (the "Pension Makeup").

Notwithstanding the foregoing, any unvested Additional Grants shall become
fully, exercisable and nonforfeitable upon: (i) a termination of employment
without Cause; (ii) a Constructive Termination Without Cause of employment;
(iii) a termination of employment as a result of your death or Disability; or
(iv) a change of control of Litton. In the event of any termination without
Cause, Constructive Termination Without Cause, death or Disability, you will
have at least two (2) years to exercise any Additional Grant options (subject to
the end of the stated term of the options), and for purposes of (vii) and (viii)
above, you will be treated as if you had worked to at least age 55.

7.     SPECIAL SEVERANCE BENEFITS: If for any reason, except a termination for
Cause or your voluntary separation from Litton (other than for Constructive
Termination Without Cause), your death or your Disability, you are not elected
to the Litton Board within thirty (30) days of December 31, 2000 or not elected
Chief Executive Officer of Litton within thirty (30) days of December 31, 2001,
and either you or Litton, upon a further thirty (30) days written notice, elect
to sever any further employment service with Litton, or you are terminated
without Cause or by Constructive Termination Without Cause prior to December 31,
2001, you shall receive the following benefits at your termination date unless
otherwise stated herein:

       (i)    A cash payment equal to $5,000,000 (less applicable statutory
              deductions) to be paid within thirty (30) days of your termination
              date.

       (ii)   The then remaining unvested shares of restricted stock granted to
              you under Section 6 shall vest.

       (iii)  The remaining unvested shares of the non-qualified stock options
              granted to you under Section 4(a) or under Section 6 shall vest
              and you shall have a two (2) year period to exercise.

                                    4 of 11
<PAGE>


       (iv)   The grants of Performance-Based Restricted Stock granted to you
              pursuant to Section 5 and Section 6 shall vest at the maximum
              performance level.

              With respect to (ii) and (iv) above, however, Litton, in lieu
              thereof, reserves the right to pay you in cash within thirty (30)
              days of your termination date an amount equal to the fair market
              value of Litton's Common Stock on the date of vesting of the
              shares of restricted stock and performance stock.

       (v)    You shall receive the calculated value of the difference between
              the projected value of TRW qualified and non-qualified
              supplemental pension plans less the actual vested terminated
              benefit from TRW and Litton's actual accrued benefit from the
              pension plans and SERP. The annual benefit difference is projected
              to be $241,921 annually at age 54. Litton reserves the right to
              pay the benefit on a monthly basis. For the purposes of this
              section, you will be treated as if you had worked to at least age
              55 or your actual age, if greater.

       (vi)   Notwithstanding the foregoing, in the event of a change of control
              under your Change of Control Employment Agreement, and a right to
              payment, under Section 6(a) thereof, to the extent that the amount
              payable under Section 6(a)(i)B thereof is less than $5 million,
              you shall be paid the difference at such time pursuant to the
              terms of this Letter.

       (vii)  Any compensation earned but not yet paid, including and without
              limitation, any bonus if declared or earned but not yet paid for a
              completed fiscal year, the pro rata annual incentive award for the
              year in which termination occurs, any amount of Base Salary earned
              but unpaid, any unreimbursed business expenses, any unpaid signing
              bonus pursuant to Section 2 hereof, and the amounts due under
              Section 6(v) (based on target achievement) and Section 6(vi)
              (collectively the "Accrued Amounts").

       (viii) Outplacement on a level commensurate with your position from an
              outplacement company selected by you.

Once you are elected to the Board and as CEO of Litton, the Special Severance
benefits above terminate and will be of no further force or effect.

8.     TERMINATION: (a) In the event of termination for Cause or termination
       without Cause or Constructive Termination Without Cause after being
       elected CEO and prior to being elected Chairman the following shall be
       provided:

                                    5 of 11
<PAGE>

       (i)    Termination by Litton for Cause or by you other than for
              Constructive Termination Without Cause:

              (A)    A termination for Cause shall not take effect unless the
                     provisions of this paragraph (A) are complied with. You
                     shall be given written notice by the Board of the intention
                     to terminate you for Cause and shall then be entitled to a
                     hearing before the Board, provided you request such hearing
                     within ten (10) calendar days of receipt of the written
                     notice from the Board of the intention to terminate you for
                     Cause. Following such hearing, if you are furnished written
                     notice by the Board confirming that, in its judgment,
                     grounds for Cause on the basis of the original notice
                     exist, you shall thereupon be terminated for Cause, which
                     determination shall be subject to review by the arbitrator
                     on a DE NOVO basis.

              (B)    In the event Litton terminates your employment for Cause:

                     (1)    You shall be entitled to Accrued Amounts;

                     (2)    All outstanding options that are not then
                            exercisable shall be forfeited;

                     (3)    All unvested restricted stock shall be forfeited;
                            and

                     (4)    Any other long-term incentive grants shall be
                            treated in accordance with the applicable plan
                            and/or grant.


       (ii)   Termination Without Cause or Constructive Termination Without
              Cause. In the event your employment is terminated by Litton
              without Cause, other than due to Disability or death, or in the
              event there is a Constructive Termination Without Cause, in either
              case, you shall be entitled to the following benefits:

              (A)    Accrued Amounts;

              (B)    Base salary, at the annualized rate in effect on the date
                     of termination, for a period of 24 months following such
                     termination;

              (C)    An annual incentive award at target for a period of 24
                     months following the date of termination; payable when such
                     awards are made to other senior executives;

              (D)    The same treatment as provided under items (ii), (iii),
                     (iv) and (v) under "Special Severance;"

                                    6 of 11
<PAGE>

              (E)    Any other long-term incentives shall be payable in
                     accordance with the plans and grants;

              (F)    Continued participation in the Executive Health Care Plan
                     and in other employee benefit plans or programs in which
                     you were participating on the date of the termination of
                     your employment on the same basis or while an active
                     employee until the earlier of 24 months following
                     termination of employment or the date, or dates, you obtain
                     coverage under the corresponding plans of another employer;
                     and

              (G)    Outplacement on a level commensurate with your position
                     from an outplacement company selected by you.


Notwithstanding the foregoing, in the event such termination is after a change
of control, you shall receive on an item-by-item basis the better of such each
item hereunder and under the Change of Control Employment Agreement.

       (b)    In the event your employment is terminated as a result of your
              death or Disability at any time prior to becoming Chairman, you
              will receive the following benefits:

              (A)    Accrued Amounts;

              (B)    Continued participation in the Executive Health Care Plan
                     on the same basis as while an active employee for you or
                     your dependents (as applicable) for eighteen (18) months;
                     and

              (C)    The same treatment as provided under items (ii), (iii),
                     (iv) and (v) under "Special Severance."


In consideration of receipt of these additional benefits upon a termination of
employment without Cause or Constructive Termination Without Cause, you agree to
sign an enforceable waiver of all claims against Litton, which you then have or
may have in the future as a result of such severance of employment with Litton.
Such release shall not have provisions other than the release of claims and
shall except out rights under this Letter (or as provided herein) upon such
termination, rights under the Change of Control Employment Agreement, rights of
indemnification and rights to directors and officers liability insurance.


                                    7 of 11
<PAGE>


9.     DEFINITIONS:



       (i)    "Cause" shall mean:

              (A)    Your conviction of, or pleading NOLO CONTENDRE to, a felony
                     (other than a felony involving a traffic violation or as a
                     result of vicarious liability); or

              (B)    In carrying out your duties hereunder, you engage in
                     conduct that constitutes gross neglect or gross misconduct,
                     resulting, in either case, in material economic harm to
                     Litton.


       (ii)   "Constructive Termination Without Cause" shall mean termination by
              you of your employment at your initiative within 30 days following
              the occurrence of any of the following events without your
              consent:

              (A)    A reduction in your current base salary or target bonus
                     opportunity as a percentage of base salary;

              (B)    A material diminution in your duties, authority and/or
                     title;

                     Following written notice from you of any of the events
                     described above, Litton shall have 15 calendar days in
                     which to cure the events giving rise to such notice. If
                     Litton fails to cure, your termination shall become
                     effective on the 16th calendar day following the written
                     notice.

              (C)    Any material breach of this Letter by Litton; or

              (D)    Failure of any successor to Litton to assume in a writing
                     delivered to you the obligations of Litton hereunder.


       (iii)  "Disability" shall mean that by reason of the same or related
              physical or mental illness or incapacity you are unable to carry
              out your material duties pursuant to this Letter for more than six
              (6) consecutive months. In such case Litton may terminate your
              employment for Disability. Upon thirty (30) days prior written
              notice by a notice of disability termination, at any time
              thereafter while you consecutively continue to be unable to carry
              out your duties as a result of the same or related physical or
              mental illness or incapacity. A termination for Disability
              hereunder shall not be effective if you return to the full-time
              performance of your material duties within such thirty (30) day
              period.

                                    8 of 11
<PAGE>


10.    ADDITIONAL PLANS AND BENEFITS: You will be eligible for coverage or
participation in the following plans and benefits (subject to any prospective
changes covering participants):

-      1984 Long-Term Stock Incentive Plan
-      Performance Award and Deferred Compensation Plans
-      Litton Supplemental Executive Retirement Plan
-      Executive Medical Plan
-      Executive Physical Program
-      Incentive Loan Program (permits Company loans to you of amounts up to
       your annual base salary at an interest rate of 4% [with imputed income to
       you at the difference between the Federal rate and 4%])
-      Change of Control Employment Agreement (three times salary, bonus and
       benefits)
-      Use of Company car with all operating costs paid by Litton
-      Estate, financial and tax planning services up to $5,000 per 12-month
       period
-      First-class business travel
-      Matching grants for higher education
-      Corporate headquarters' Executive Dining Room and fitness room
-      Litton Financial Security and Savings Program (FSSP)
-      Group Health Insurance Plans
-      Litton Restoration Plan
-      Executive Life Insurance Plan equal to four times your base salary
-      Directors' and Officers' Liability Insurance

11.    RELOCATION ASSISTANCE: We will provide relocation benefits for your move
from Moreland Hills, Ohio. In addition to the benefits provided under our
Corporate relocation policy, you will be granted temporary housing for six (6)
months with extensions as approved by the CEO. Litton will reimburse you for
reasonable and customary closing costs incurred in the purchase of a home. All
relocation expenses that are taxable income will be grossed-up for Federal,
State, and Medicare Taxes. We expect that you will complete your relocation
within six months, but your relocation must be completed within one year from
your start date.

12.    ADDITIONAL HOME SALE ASSISTANCE: If your home does not sell in Moreland
Hills, Ohio within four months after your employment date, Litton will offer to
purchase your home through our relocation vendor at an appraised price. This
price will be established through an evaluation by two licensed real estate
appraisers selected by you from a list furnished by our relocation vendor. This
price shall be established after a review of your property and a comparison of
like properties in the area. If the two appraisals are within 5% of one another,
Litton's offer to purchase your home will be the average of the two. If the
difference is greater than 5%, you will select a third appraiser from the list
and the offer by Litton will be based on the average of the two highest
appraisals.

                                    9 of 11
<PAGE>

13.    EMPLOYMENT AT WILL: By accepting this offer you understand that the
employment contemplated by this Letter is at the will of either of you or
Litton. Subject to the payment of the amounts due hereunder, your employment is
not for a specified term and may be terminated at the will of either you or
Litton.

14.    ENTIRE AGREEMENT: This Letter contains the entire agreement of the
parties and supersedes all previous agreements, representations, written or
oral, by any other party pertaining to or concerning the subject matter hereof,
other than those set forth in the paragraph entitled "Additional Plans and
Benefits." Any amendment, modification or change hereto shall not be binding
unless in writing and duly executed by both parties. This Letter shall not be
superceded by the Change of Control Employment Agreement upon a change of
control, but shall be in addition to it, except as otherwise provided herein.

15.    NO MITIGATION/NO SET-OFF: In the event of any termination of employment
hereunder, you shall be under no obligation to seek other employment and there
shall be no offset against any amounts due you under this Letter on account of
any remuneration attributable to any subsequent employment that you may obtain.
The amounts payable hereunder shall not be subject to setoff, counterclaim,
recoupment, defense or other right that Litton may have against you or others,
except upon obtaining by Litton of a final unappealable judgment against you.

16.    MUTUAL AGREEMENT TO ARBITRATE CLAIMS: All disputes and controversies
arising under or in connection with this Letter shall be settled by arbitration
conducted before one (1) arbitrator sitting in the location of the primary
executive offices of Litton, or such other location agreed to by the parties
hereto, in accordance with the rules for expedited resolution of commercial
disputes of the American Arbitration Association then in effect. The
determination of the arbitrator shall be final and binding upon the parties.
Judgment may be entered on the award of the arbitrator in any court having
proper jurisdiction. All expenses of such arbitration, including the fees and
expenses of your counsel (which shall be advanced as incurred), shall be borne
by Litton unless the arbitrator determines your position was frivolous or
otherwise taken in bad faith, in which case the arbitrator may determine that
you shall bear your own legal fees.

17.    LIABILITY INSURANCE: Litton shall cover you under directors and officers
liability insurance both during and, while potential liability exists, after the
employment term in the same amount and to the same extent as Litton covers its
other officers and directors.

18.    ATTORNEY FEES: Litton will pay the reasonable attorney and financial
advisory fees and disbursements incurred by you in connection with the review
and negotiation of this offer upon presentation of invoices with appropriate
documentation.

19.    POST-CHAIRMAN SEVERANCE: After you are elected Chairman of the Board, you
will be entitled to receive severance upon a termination in accordance with
Litton's existing policies and

                                    10 of 11
<PAGE>

procedures for senior executive officers then in effect. The provisions of this
Letter with regard to treatment of equity, pensions and Accrued Amounts shall,
however, continue to apply even after you are elected Chairman.

20.    DURATION: Once you are elected Chairman of the Board, this Letter shall
terminate and will be of no further force or effect, except for Sections 6, 10,
16 and 19 hereof.

Sincerely,

/s/ MICHAEL R. BROWN

Michael R. Brown
Chairman, President and
Chief Executive Officer

MRB/la
Enclosures:  As Stated

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

                                 ACKNOWLEDGMENT

I hereby accept the above Offer of Employment and understand and agree to all of
the terms therein.

/s/ RONALD D. SUGAR                                 June 21, 2000
------------------------------------------     -----------------------
Ronald D. Sugar                                        Date


                                    11 of 11

<PAGE>

                                   EXHIBIT A

                                TRW (PER LITTON)



            --------------------------------------------------------
                      AGE                   PENSION PROJECTIONS
            --------------------------------------------------------
                      55                         $241,921
            --------------------------------------------------------
                      56                         $303,240
            --------------------------------------------------------
                      57                         $355,127
            --------------------------------------------------------
                      58                         $413,800
            --------------------------------------------------------
                      59                         $479,966
            --------------------------------------------------------
                      60                         $544,420
            --------------------------------------------------------
                      61                         $613,468
            --------------------------------------------------------
                      62                         $677,466
            --------------------------------------------------------
                      63                         $746,795
            --------------------------------------------------------
                      64                         $821,877
            --------------------------------------------------------
                      65                         $903,141
            --------------------------------------------------------