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                                                                    EXHIBIT 4.2

                                     FORM OF
               CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF
                     SERIES B PREFERRED STOCK OF NORTHROP
                                GRUMMAN CORPORATION

     Pursuant to Section 151 of the General Corporation Law of the State of
Delaware, Northrop Grumman Corporation, a Delaware corporation (the
"Corporation"), certifies that pursuant to the authority contained in Article
FOURTH of its Certificate of Incorporation, and in accordance with the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, its Board of Directors has adopted the following resolution creating a
series of its Preferred Stock, par value $1.00 per share, designated as Series B
Convertible Preferred Stock:

     RESOLVED, that a series of the authorized Preferred Stock, par value $1.00
     per share, of the Corporation be hereby created, and that the designation
     and amount thereof and the voting powers, preferences and relative,
     participating, optional and other special rights of the shares of such
     series, and the qualifications, limitations or restrictions thereof are as
     follows:

     Section 1.  Designation and Amount.  The shares of such series shall be
                 ----------------------
designated as the "Series B Convertible Preferred Stock" (the "Series B
Convertible Preferred Stock") and the number of shares constituting such series
shall be 3,500,000.

     Section 2.  Dividends.  The holders of shares of Series B Convertible
                 ---------
Preferred Stock shall be entitled to receive cumulative cash dividends when, as
and if declared by the Board of Directors out of any funds legally available
therefor, at the rate per year herein specified, payable quarterly at the rate
of one-fourth of such amount on the fifteenth day (or, if such day is not a
business day, on the first business day thereafter) of January, April, July and
October in each year.  The rate of dividends shall [initially] be [$9.00] per
year per share/1/.  [Thereafter, the rate

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/1/  If the initial date of issue is after the 2001 annual meeting of
stockholders, this provision will be modified to reflect the vote at such
meeting.  If Stockholder Approval was obtained, the dividend rate shall be $7.00
per year and the provision relating to future Stockholder Approval will be
deleted.  If Stockholder Approval was not obtained, the initial dividend rate
shall be $9.00 per year and the provision for a future downward adjustment
following Stockholder Approval will be retained.

     If the initial date of issue is before the 2001 annual meeting, the initial
dividend rate shall be $7.00 per year. If Stockholder Approval is obtained at
the 2001 annual meeting, the dividend rate shall remain at such level. If
Stockholder Approval is not obtained at the 2001 annual meeting, the dividend
rate shall increase to $9.00 per year, after the October 2001 dividend payment
date, subject to future downward adjustment if Stockholder Approval is obtained.

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of dividends shall be reduced to $7.00 per year per share after the first
quarterly dividend payment following the date, if any, on which the stockholders
of the Corporation shall have approved the issuance of all common stock, par
value $1.00 per share, of the Corporation ("Common Stock") issuable upon
conversion of the Series B Convertible Preferred Stock (such stockholder
approval being referred to herein as the "Stockholder Approval").] [Thereafter,
the rate of dividends shall be increased to $9.00 per share per year after the
October 2001 dividend payment date if the stockholders of the Corporation shall
not have, prior to that time, approved the issuance of all Common Stock issuable
upon conversion of the Series B Convertible Preferred Stock.] [The rate of
dividends shall be decreased to $7.00 per share after the first quarterly
dividend payment date after Stockholder Approval is obtained.] Cash dividends
upon the Series B Convertible Preferred Stock shall commence to accrue and shall
be cumulative from the date of issuance.

     If the dividend for any dividend period shall not have been paid or set
apart in full for the Series B Convertible Preferred Stock, the deficiency shall
be fully paid or set apart for payment before (i) any distributions or
dividends, other than distributions or dividends paid in stock ranking junior to
the Series B Convertible Preferred Stock as to dividends, redemption payments
and rights upon liquidation, dissolution or winding up of the Corporation, shall
be paid upon or set apart for Common Stock or stock of any other class or series
of Preferred Stock ranking junior to the Series B Convertible Preferred Stock as
to dividends, redemption payments or rights upon liquidation, dissolution or
winding up of the Corporation; and (ii) any Common Stock or shares of Preferred
Stock of any class or series ranking junior to the Series B Convertible
Preferred Stock as to dividends, redemption payments or rights upon liquidation,
dissolution or winding up of the Corporation shall be redeemed, repurchased or
otherwise acquired for any consideration other than stock ranking junior to the
Series B Preferred Stock as to dividends, redemption payments and rights upon
liquidation, dissolution or winding up of the Corporation. No distribution or
dividend shall be paid upon, or declared and set apart for, any shares of
Preferred Stock ranking on a parity with the Series B Convertible Preferred
Stock as to dividends, redemption payments or rights upon liquidation,
dissolution or winding up of the Corporation for any dividend period unless at
the same time a like proportionate distribution or dividend for the same or
similar dividend period, ratably in proportion to the respective annual
dividends fixed therefor, shall be paid upon or declared and set apart for all
shares of Preferred Stock of all series so ranking then outstanding and entitled
to receive such dividend.

     Section 3.  Voting Rights.  Except as provided herein or as may otherwise
                 -------------
be required by law, the holders of shares of Series B Convertible Preferred
Stock shall not be entitled to any voting rights as stockholders with respect to
such shares.

     (a) So long as any shares of Series B Convertible Preferred Stock shall be
outstanding, the Corporation shall not, without the affirmative vote of the
holders of at least two-thirds of the aggregate number of shares of Series B
Convertible Preferred Stock at the time

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outstanding, by an amendment to the Restated Certificate of Incorporation, by
merger or consolidation, or in any other manner:

          (i)    authorize any class or series of stock ranking prior to the
     Series B Convertible Preferred Stock as to dividends, redemption payments
     or rights upon liquidation, dissolution or winding up of the Corporation;

          (ii)   alter or change the preferences, special rights, or powers
     given to the Series B Convertible Preferred Stock so as to affect such
     class of stock adversely, but nothing in this clause (ii) shall require
     such a class vote (x) in connection with any increase in the total number
     of authorized shares of Common Stock or Preferred Stock; (y) in connection
     with the authorization or increase in the total number of authorized shares
     of any class of stock ranking on a parity with the Series B Convertible
     Preferred Stock; or (z) in connection with the fixing of any of the
     particulars of shares of any other series of Preferred Stock ranking on a
     parity with the Series B Convertible Preferred Stock that may be fixed by
     the Board of Directors as provided in Article FOURTH of the Certificate of
     Incorporation; or

          (iii)  directly or indirectly purchase or redeem less than all of the
     Series B Convertible Preferred Stock at the time outstanding unless the
     full dividends to which all shares of the Series B Convertible Preferred
     Stock then outstanding shall then be entitled shall have been paid or
     declared and a sum sufficient for the payment thereof set apart.

     (b) If and whenever accrued dividends on the Series B Convertible Preferred
Stock shall not have been paid or declared and a sum sufficient for the payment
thereof set aside for six quarterly dividend periods (whether or not
consecutive), then and in such event, the holders of the Series B Convertible
Preferred Stock, voting separately as a class, shall be entitled to elect two
directors at any annual meeting of the stockholders or any special meeting held
in place thereof, or at a special meeting of the holders of the Series B
Convertible Preferred Stock called as hereinafter provided. Such right of the
holders of the Series B Convertible Preferred Stock to elect two directors may
be exercised until the dividends in default on the Series B Convertible
Preferred Stock shall have been paid in full or funds sufficient therefor set
aside; and when so paid or provided for, then the right of the holders of the
Series B Convertible Preferred Stock to elect such number of directors shall
cease, but subject always to the same provisions for the vesting of such voting
rights in the case of any such future default or defaults. At any time after
such voting power shall have so vested in the holders of the Series B
Convertible Preferred Stock, the Secretary of the Corporation may, and upon the
written request of the holders of record of ten percent (10%) or more in amount
of the Series B Convertible Preferred Stock then outstanding addressed to him at
the principal executive office of the Corporation shall, call a special meeting
of the holders of the Series B Convertible Preferred Stock for the election of
the directors to be elected by them as hereinafter provided, to be held within
sixty (60) days after delivery of such request and at the place and upon the
notice provided by law and in the bylaws of the Corporation for the holding of
meetings of stockholders; provided, however, that the Secretary shall not be
                          --------  -------
required to call such special meeting in the case of any such request received
less than ninety (90) days before the date fixed for the next ensuing annual
meeting of stockholders. If at any such annual or special meeting or any
adjournment thereof the holders of at least a majority of the Series B
Convertible Preferred Stock then outstanding and entitled to

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vote thereat shall be present or represented by proxy, then, by vote of the
holders of at least a majority of the Series B Convertible Preferred Stock
present or so represented at such meeting, the then authorized number of
directors of the Corporation shall be increased by two, and the holders of the
Series B Convertible Preferred Stock shall be entitled to elect the additional
directors so provided for. The directors so elected shall serve until the next
annual meeting or until their respective successors shall be elected and shall
qualify; provided, however, that whenever the holders of the Series B
         -------- --------
Convertible Preferred Stock shall be divested of voting power as above provided,
the terms of office of all persons elected as directors by the holders of the
Series B Convertible Preferred Stock as a class shall forthwith terminate and
the number of the Board of Directors shall be reduced accordingly.

     (c) If, during any interval between any special meeting of the holders of
the Series B Convertible Preferred Stock for the election of directors to be
elected by them as provided in this Section 3 and the next ensuing annual
meeting of stockholders, or between annual meetings of stockholders for the
election of directors, and while the holders of the Series B Convertible
Preferred Stock shall be entitled to elect two directors, the number of
directors who have been elected by the holders of the Series B Convertible
Preferred Stock shall, by reason of resignation, death, or removal, be less than
the total number of directors subject to election by the holders of the Series B
Convertible Preferred Stock, (i) the vacancy or vacancies in the directors
elected by the holders of the Series B Convertible Preferred Stock shall be
filled by the remaining director then in office, if any, who was elected by the
holders of the Series B Convertible Preferred Stock, although less than a
quorum, and (ii) if not so filled within sixty (60) days after the creation
thereof, the Secretary of the Corporation shall call a special meeting of the
holders of the Series B Convertible Preferred Stock and such vacancy or
vacancies shall be filled at such special meeting.  Any director elected to fill
any such vacancy by the remaining director then in office may be removed from
office by vote of the holders of a majority of the shares of the Series B
Convertible Preferred Stock.  A special meeting of the holders of the Series B
Convertible Preferred Stock may be called by a majority vote of the Board of
Directors for the purpose of removing such director.  The Secretary of the
Corporation shall, in any event, within ten (10) days after delivery to the
Corporation at its principal office of a request to such effect signed by the
holders of at least ten percent (10%) of the outstanding shares of the Series B
Convertible Preferred Stock, call a special meeting for such purpose to be held
within sixty (60) days after delivery of such request; provided, however, that
                                                       --------  -------
the Secretary shall not be required to call such a special meeting in the case
of any such request received less than ninety (90) days before the date fixed
for the next ensuing annual meeting of stockholders.

     Section 4.  Redemption.
                 ----------

     (a) Shares of Series B Convertible Preferred Stock shall not be redeemable
except as follows:

          (i)  All, but not less than all, of the shares of Series B Convertible
     Preferred Stock shall be redeemed for cash in an amount equal to (X) if
     prior to Stockholder Approval, the greater of (a) the Liquidation Value
     plus all accrued and unpaid dividends with respect to such shares, whether
     or not declared, and (b) the Current Market Price of the number of shares
     of Common Stock which would be issued to such holders if all shares of
     Series B Convertible Preferred Stock were converted into Common Stock on
     the

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     Redemption Date pursuant to Section 8; and (Y) after Stockholder
     Approval, the Liquidation Value plus all dividends with respect to such
     shares, whether or not declared, accrued and unpaid as of the Redemption
     Date, as defined below, on the first day after the twentieth anniversary of
     the initial issuance of the Series B Convertible Preferred Stock.

          (ii)  All, but not less than all, of the shares of Series B
     Convertible Preferred Stock may be redeemed at the option of the
     Corporation at any time after the seventh anniversary of the initial
     issuance of the Series B Convertible Preferred Stock.  Any redemption
     pursuant to this clause (ii) shall be solely for Common Stock of the
     Corporation and at the Redemption Date each holder of shares of Series B
     Convertible Preferred Stock shall be entitled to receive, in exchange and
     upon surrender of the certificate therefor, that number of fully paid and
     nonassessable shares of Common Stock determined by dividing (X) if prior to
     Stockholder Approval, the greater of (a) the Liquidation Value plus all
     accrued and unpaid dividends with respect to such shares, whether or not
     declared, and (b) the Current Market Price of the number of shares of
     Common Stock which would be issued if all shares of Series B Convertible
     Preferred Stock were converted into Common Stock pursuant to Section 8 on
     the Redemption Date; or (Y) if after Stockholder Approval, the Liquidation
     Value plus all accrued and unpaid dividends with respect to such shares,
     whether or not declared thereon to the Redemption Date, by (Z) the Current
     Market Price of the Common Stock as of the Redemption Date; provided,
                                                                 --------
     however, that if prior to the Redemption Date there shall have occurred a
     -------
     Transaction, as defined in Section 8(b)(iii), the consideration deliverable
     in any such exchange shall be the Alternate Consideration as provided in
     Section 12.

     (b) Notice of every mandatory or optional redemption shall be mailed at
least thirty (30) days but not more than fifty (50) days prior to the Redemption
Date to the holders of record of the shares of Series B Convertible Preferred
Stock so to be redeemed at their respective addresses as they appear upon the
books of the Corporation.  Each such notice shall specify the date on which such
redemption shall be effective (the "Redemption Date"), the redemption price or
manner of calculating the redemption price and the place where certificates for
the Series B Convertible Preferred Stock are to be surrendered for cancellation.

     (c) On the date that redemption is being made pursuant to paragraph (a) of
this Section 4, the Corporation shall deposit for the benefit of the holders of
shares of Series B Convertible Preferred Stock the funds, or stock certificates
for Common Stock, necessary for such redemption with a bank or trust company in
the Borough of Manhattan, the City of New York, having a capital and surplus of
at least $1,000,000,000.  Dividends paid on Common Stock held for the benefit of
the holders of shares of Series B Convertible Preferred Stock hereunder shall be
held for the benefit of such holders and paid over, without interest, on
surrender of certificates for the Series B Convertible Preferred Stock.  Any
monies or stock certificates so deposited by the Corporation and unclaimed at
the end of one year from the Redemption Date shall revert to the Corporation.
After such reversion, any such bank or trust company shall, upon demand, pay
over to the Corporation such unclaimed amounts or deliver such stock
certificates and thereupon such bank or trust company shall be relieved of all
responsibility in respect thereof and any holder of shares of Series B
Convertible Preferred Stock shall look only to the Corporation for the payment
of the redemption price. Any interest accrued on funds deposited

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pursuant to this paragraph (c) shall be paid from time to time to the
Corporation for its own account.

     (d) Upon the deposit of funds or certificates for Common Stock pursuant to
paragraph (c) in respect of shares of Series B Convertible Preferred Stock being
redeemed pursuant to paragraph (a) of this Section 4, notwithstanding that any
certificates for such shares shall not have been surrendered for cancellation,
the shares represented thereby shall on and after the Redemption Date no longer
be deemed outstanding, and all rights of the holders of shares of Series B
Convertible Preferred Stock shall cease and terminate, excepting only the right
to receive the redemption price therefor.  Nothing in this Section 4 shall limit
the right of a holder to convert shares of Series B Convertible Preferred Stock
pursuant to Section 8 at any time prior to the Redemption Date, even if such
shares have been called for redemption pursuant to Section 4(a).

     (e) In connection with any redemption pursuant to clause (ii) of paragraph
(a) of this Section 4, no fraction of a share of common stock shall be issued,
but in lieu thereof the Corporation shall pay a cash adjustment in respect of
such fractional interest in an amount equal to such fractional interest
multiplied by the Current Market Price per share of Common Stock on the
Redemption Date.

     Section 5.  Fundamental Change in Control.
                 -----------------------------

     (a) Not later than 10 business days following a Fundamental Change in
Control, as defined below, the Corporation shall mail notice to the holders of
Series B Convertible Preferred Stock stating that a Fundamental Change in
Control has occurred and advising such holders of their right to exchange (the
"Exchange Right") any and all shares of Series B Convertible Preferred Stock for
shares of Common Stock as provided herein; provided, however, that if prior to
                                           --------  -------
the Exchange Date (as defined below) there shall have occurred a Transaction, as
defined in Section 8(b)(iii), the consideration deliverable in any such exchange
shall be the Alternate Consideration as provided in Section 12.  Such notice
shall state: (i) the date on which such exchanges shall be effective (the
"Exchange Date"), which shall be the 21st business day from the date of giving
such notice; (ii) the number of shares of Common Stock (or Alternate
Consideration) for which each share of Series B Convertible Preferred Stock may
be exchanged; and (iii) the method by which each holder may give notice of its
exercise of the Exchange Right; and (iv) the method and place for delivery of
certificates for Series B Convertible Preferred Stock in connection with
exchanges pursuant hereto.  For a period of twenty (20) business days following
the notice provided herein, each holder of Series B Convertible Preferred Stock
may exercise the Exchange Right as provided herein.

     (b) Pursuant to the Exchange Right, each share of Series B Convertible
Preferred Stock shall be exchanged for that number of shares of Common Stock
determined by dividing an amount equal to (X) if prior to Stockholder Approval,
the greater of (a) the Liquidation Value plus all dividends accrued and unpaid
with respect to such share as of the Exchange Date, whether or not declared, and
(b) the Current Market Price of the number of shares of Common Stock which would
be issued if such share of Series B Convertible Preferred Stock were converted
into Common Stock pursuant to Section 8 on the Exchange Date; or (Y) if after
Stockholder Approval, the Liquidation Value plus all dividends accrued and
unpaid with respect

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to such share as of the Exchange Date, whether or not declared, in each case by
the Current Market Price per share of Common Stock as of the Exchange Date.

     (c) The holder of any share of Series B Convertible Preferred Stock may
exercise the Exchange Right by surrendering for such purpose to the Corporation,
at its principal office or at such other office or agency maintained by the
Corporation for that purpose, a certificate or certificates representing the
shares of Series B Convertible Preferred Stock to be exchanged accompanied by a
written notice stating that such holder elects to exercise the Exchange Right as
to all or a specified number of such shares in accordance with this Section 5
and specifying the name or names in which such holder wishes the certificate or
certificates for shares of Common Stock to which such holder is entitled to be
issued and such other customary documents as are necessary to effect the
exchange.  In case such notice shall specify a name or names other than that of
such holder, such notice shall be accompanied by payment of all transfer taxes
payable upon the issuance in such name or names of shares of Common Stock to
which such holder has become entitled. Other than such taxes, the Corporation
will pay any and all issue and other taxes (other than taxes based on income)
that may be payable in respect of any issue or delivery of shares of Common
Stock to which such holder has become entitled on exchange of shares of Series B
Convertible Preferred Stock pursuant hereto.  As promptly as practicable, and in
any event within five (5) business days after the surrender of such certificate
or certificates and the receipt of such notice relating thereto and, if
applicable, payment of all transfer taxes (or the demonstration to the
satisfaction of the Corporation that such taxes have been paid), the Corporation
shall deliver or cause to be delivered certificates representing the number of
validly issued, fully paid and nonassessable shares of Common Stock to which the
holder of shares of Series B Convertible Preferred Stock so exchanged shall be
entitled.

     (d) From and after the Exchange Date, a holder of shares of Series B
Convertible Preferred Stock who has elected to exchange such shares for Common
Stock as herein provided shall have no voting or other rights with respect to
the shares of Series B Convertible Preferred Stock subject thereto, other than
the right to receive the Common Stock provided herein upon delivery of the
certificate or certificates evidencing shares of Series B Convertible Preferred
Stock.

     (e) In connection with the exchange of any shares of Series B Convertible
Preferred Stock, no fraction of a share of Common Stock shall be issued, but in
lieu thereof the Corporation shall pay a cash adjustment in respect of such
fractional interest in an amount equal to such fractional interest multiplied by
the Current Market Price per share of Common Stock on the Exchange Date.

     (f) The Corporation shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for the purpose of the Exchange
Rights provided herein, such number of shares of Common Stock as shall from time
to time be sufficient to effect the exchange provided herein.  The Corporation
shall from time to time, in accordance with the laws of Delaware, increase the
authorized amount of Common Stock if at any time the number of authorized shares
of Common Stock remaining unissued shall not be sufficient to permit the
exchange of all then outstanding shares of Series B Convertible Preferred Stock.

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     (g) As used herein, the term "Fundamental Change in Control" shall mean any
merger, consolidation, sale of all or substantially all of the Corporation's
assets, liquidation or recapitalization (other than solely a change in the par
value of equity securities) of the Common Stock in which more than one-third of
the previously outstanding Common Stock shall be changed into or exchanged for
cash, property or securities other than capital stock of the Corporation or
another corporation ("Non Stock Consideration").  For purposes of the preceding
sentence, any transaction in which shares of Common Stock shall be changed into
or exchanged for a combination of Non Stock Consideration and capital stock of
the Corporation or another corporation shall be deemed to have involved the
exchange of a number of shares of Common Stock for Non Stock Consideration equal
to the total number of shares exchanged multiplied by a fraction in which the
numerator is the Fair Market Value of the Non Stock Consideration and the
denominator is the Fair Market Value of the total consideration in such
exchange, each as determined by a resolution of the Board of Directors of the
Corporation.

     Section 6.  Reacquired Shares.  Any shares of Series B Convertible
                 -----------------
Preferred Stock converted, redeemed, exchanged, purchased or otherwise acquired
by the Corporation in any manner whatsoever shall be retired and canceled
promptly after the acquisition thereof.  All such shares shall upon their
cancellation, and upon the filing of an appropriate certificate with the
Secretary of State of the State of Delaware, become authorized but unissued
shares of Preferred Stock, par value $1.00 per share, of the Corporation and may
be reissued as part of another series of Preferred Stock, par value $1.00 per
share, of the Corporation subject to the conditions or restrictions on issuance
set forth herein.

     Section 7.  Liquidation, Dissolution or Winding Up.
                 --------------------------------------

     (a) Except as provided in paragraph (b) of this Section 7, upon any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (i) to the holders of shares of
capital stock of the Corporation ranking junior as to dividends, redemption
payments and rights upon liquidation, dissolution or winding up of the
Corporation to the Series B Convertible Preferred Stock unless, prior thereto,
the holders of shares of Series B Convertible Preferred Stock shall have
received (X) if prior to Stockholder Approval, the greater of (a) the
Liquidation Value plus all accrued and unpaid dividends with respect to such
shares, whether or not declared, and (b) the amount which would be distributed
to such holders if all shares of Series B Convertible Preferred Stock had been
converted into Common Stock pursuant to Section 8; and (Y) after Stockholder
Approval, the Liquidation Value plus all accrued and unpaid dividends with
respect to such shares, whether or not declared or (ii) to the holders of shares
of capital stock ranking on a parity with the Series B Convertible Preferred
Stock as to dividends, redemption payments and rights upon liquidation,
dissolution or winding up of the Corporation, except distributions made ratably
on the Series B Convertible Preferred Stock and all such parity stock in
proportion to the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up.  The Liquidation
Value shall be $100.00 per share.

     (b) If the Corporation shall commence a voluntary case under the Federal
bankruptcy laws or any other applicable Federal or State bankruptcy, insolvency
or similar law, or consent to the entry of an order for relief in an involuntary
case under any such law or to the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official) of the

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Corporation or of any substantial part of its property, or make an assignment
for the benefit of its creditors, or admit in writing its inability to pay its
debts generally as they become due, or if a decree or order for relief in
respect of the Corporation shall be entered by a court having jurisdiction in
the premises in an involuntary case under the Federal bankruptcy laws or any
other applicable Federal or State bankruptcy, insolvency or similar law, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Corporation or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and on
account of any such event the Corporation shall liquidate, dissolve or wind up,
no distribution shall be made (i) to the holders of shares of capital stock of
the Corporation ranking junior to the Series B Convertible Preferred Stock as to
dividends, redemption payments and rights upon liquidation, dissolution or
winding up of the Corporation unless, prior thereto, the holders of shares of
Series B Convertible Preferred Stock shall have received (X) if prior to
Stockholder Approval, the greater of (a) the Liquidation Value plus all accrued
and unpaid dividends with respect to such shares, whether or not declared, and
(b) the amount which would be distributed to such holders if all shares of
Series B Convertible Preferred Stock had been converted into Common Stock
pursuant to Section 8; and (Y) after Stockholder Approval, the Liquidation Value
plus all accrued and unpaid dividends with respect to such shares, whether or
not declared, or (ii) to the holders of shares of capital stock ranking on a
parity with the Series B Convertible Preferred Stock as to dividends, redemption
payments and rights upon liquidation, dissolution or winding up of the
Corporation, except distributions made ratably on the Series B Convertible
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up.

     (c) Neither the consolidation, merger or other business combination of the
Corporation with or into any other Person or Persons nor the sale of all or
substantially all of the assets of the Corporation shall be deemed to be a
liquidation, dissolution or winding up of the Corporation for purposes of this
Section 7.

     Section 8.  Conversion.  Subject to the condition that the Stockholder
                 ----------
Approval shall first have been obtained, each share of Series B Convertible
Preferred Stock shall be convertible, at any time, at the option of the holder
thereof into the right to receive shares of Common Stock, on the terms and
conditions set forth in this Section 8.

     (a) Subject to the provisions for adjustment hereinafter set forth, each
share of Series B Convertible Preferred Stock shall be converted into the right
to receive a number of fully paid and nonassessable shares of Common Stock,
which shall be equal to the Liquidation Value divided by the Conversion Price,
as herein defined.  Initially the Conversion Price shall be 127% of
$______________./2/  The Conversion Price shall be subject to adjustment as
provided in this Section 8.

     (b) The Conversion Price shall be subject to adjustment from time to time
as follows:

----------------------

/2/  The blank will be filled with an amount equal to the Average Parent Price,
as defined in the Amended and Restated Agreement and Plan of Merger.

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          (i)  In case the Corporation shall at any time or from time to time
     declare a dividend, or make a distribution, on the outstanding shares of
     Common Stock in shares of Common Stock or subdivide or reclassify the
     outstanding shares of Common Stock into a greater number of shares or
     combine or reclassify the outstanding shares of Common Stock into a smaller
     number of shares of Common Stock, or shall declare, order, pay or make a
     dividend or other distribution on any other class or series of capital
     stock, which dividend or distribution includes Common Stock then, and in
     each such case, the Conversion Price shall be adjusted to equal the number
     determined by multiplying (A) the Conversion Price immediately prior to
     such adjustment by (B) a fraction, the denominator of which shall be the
     number of shares of Common Stock outstanding immediately after such
     dividend, distribution, subdivision or reclassification, and the numerator
     of which shall be the number of shares of Common Stock outstanding
     immediately before such dividend, distribution, subdivision or
     reclassification.  An adjustment made pursuant to this clause (i) shall
     become effective (A) in the case of any such dividend or distribution,
     immediately after the close of business on the record date for the
     determination of holders of shares of Common Stock entitled to receive such
     dividend or distribution, or (B) in the case of any such subdivision,
     reclassification or combination, at the close of business on the day upon
     which such corporate action becomes effective.

          (ii) In case the Corporation shall at any time or from time to time
     declare, order, pay or make a dividend or other distribution (including,
     without limitation, any distribution of stock, evidences of indebtedness or
     other securities, cash or other property or rights or warrants to subscribe
     for securities of the Corporation or any of its Subsidiaries by way of
     distribution, dividend or spinoff, but excluding regular ordinary cash
     dividends as may be declared from time to time by the Corporation) on its
     Common Stock, other than a distribution or dividend of shares of Common
     Stock that is referred to in clause (i) of this paragraph (b), then, and in
     each such case, the Conversion Price shall be adjusted to equal the number
     determined by multiplying (A) the Conversion Price immediately prior to the
     record date fixed for the determination of stockholders entitled to receive
     such dividend or distribution by (B) a fraction, the denominator of which
     shall be the Current Market Price per share of Common Stock on the last
     Trading Day on which purchasers of Common Stock in regular way trading
     would be entitled to receive such dividend or distribution and the
     numerator of which shall be the Current Market Price per share of Common
     Stock on the first Trading Day on which purchasers of Common Stock in
     regular way trading would not be entitled to receive such dividend or
     distribution (the "Ex-dividend Date"); provided that the fraction
     determined by the foregoing clause (B) shall not be greater than 1.  An
     adjustment made pursuant to this clause (ii) shall be effective at the
     close of business on the Ex-dividend Date.  If the Corporation completes a
     tender offer or otherwise repurchases shares of Common Stock in a single
     transaction or a related series of transactions, provided such tender offer
     or offer to repurchase is open to all or substantially all holders of
     Common Stock (not including open market or other selective repurchase
     programs), the Conversion Price shall be adjusted as though (A) the
     Corporation had effected a reverse split of the Common Stock to reduce the
     number of shares of Common Stock outstanding from (x) the number
     outstanding immediately prior to the completion of the tender offer or the
     first repurchase for which the adjustment is being made to (y) the number
     outstanding

                                       10
<PAGE>

     immediately after the completion of the tender offer or the last
     repurchase for which the adjustment is being made and (B) the Corporation
     had paid a dividend on the Common Stock outstanding immediately after
     completion of the tender offer or the last repurchase for which the
     adjustment is being made in an aggregate amount equal to the aggregate
     consideration paid by the Corporation pursuant to the tender offer or the
     repurchases for which the adjustment is being made (the "Aggregate
     Consideration"); provided that in no event shall the Conversion Price be
     increased as a result of the foregoing adjustment. In applying the first
     two sentences of this Section 8(b)(ii) to the event described in clause (B)
     of the preceding sentence, the Current Market Price of the Common Stock on
     the date immediately following the closing of any such tender offer or on
     the date of the last repurchase shall be taken as the value of the Common
     Stock on the Ex-Dividend Date, and the value of the Common Stock on the day
     preceding the Ex-Dividend Date shall be assumed to be equal to the sum of
     (x) the value on the Ex-Dividend Date and (y) the per share amount of the
     dividend described in such clause (B) computed by dividing the Aggregate
     Consideration by the number of shares of Common Stock outstanding after the
     completion of such tender offer or repurchase. In the event that any of the
     consideration paid by the Corporation in any tender offer or repurchase to
     which this Section 8(b)(ii) applies is in a form other than cash, the value
     of such consideration shall be determined by an independent investment
     banking firm of nationally recognized standing to be selected by the Board
     of Directors of the Corporation.

          (iii) In case at any time the Corporation shall be a party to any
     transaction (including, without limitation, a merger, consolidation, sale
     of all or substantially all of the Corporation's assets, liquidation or
     recapitalization (other than solely a change in the par value of equity
     securities) of the Common Stock and excluding any transaction to which
     clause (i) or (ii) of this paragraph (b) applies) in which the previously
     outstanding Common Stock shall be changed into or exchanged for different
     securities of the Corporation or common stock or other securities of
     another corporation or interests in a noncorporate entity or other property
     (including cash) or any combination of any of the foregoing (each such
     transaction being herein called the "Transaction"), then each Share of
     Series B Convertible Preferred Stock then outstanding shall thereafter be
     convertible into, in lieu of the Common Stock issuable upon such conversion
     prior to consummation of such Transaction, the kind and amount of shares of
     stock and other securities and property receivable (including cash) upon
     the consummation of such Transaction by a holder of that number of shares
     of Common Stock into which one share of Series B Convertible Preferred
     Stock would have been convertible (without giving effect to any restriction
     on convertibility) immediately prior to such Transaction including, on a
     pro rata basis, the cash, securities or property received by holders of
     Common Stock in any such transaction.  The Corporation shall not be a party
     to a Transaction that does not expressly contemplate and provide for the
     foregoing.

          (iv)  If any event occurs as to which the foregoing provisions of this
     Section 8(b) are not strictly applicable but the failure to make any
     adjustment to the Conversion Price or other conversion mechanics would not
     fully and equitably protect the conversion rights of the Series B Preferred
     Stock in accordance with the essential intent and principles of such
     provisions, then in each such case the Board of Directors of the
     Corporation shall make such appropriate adjustments to the Conversion Price
     or other

                                       11
<PAGE>

     conversion mechanics (on a basis consistent with the essential intent
     and principles established in this Section 8) as may be necessary to fully
     and equitably preserve, without dilution or diminution, the conversion
     rights of the Series B Convertible Preferred Stock.

     (c) If any adjustment required pursuant to this Section 8 would result in
an increase or decrease of less than 1% in the Conversion Price, the amount of
any such adjustment shall be carried forward and adjustment with respect thereto
shall be made at the time of and together with any subsequent adjustment, which,
together with such amount and any other amount or amounts so carried forward,
shall aggregate at least 1% of the Conversion Price.

     (d) The Board of Directors may at its option increase the number of shares
of Common Stock into which each share of Series B Convertible Preferred Stock
may be converted, in addition to the adjustments required by this Section 8, as
shall be determined by it (as evidenced by a resolution of the Board of
Directors) to be advisable in order to avoid or diminish any income deemed to be
received by any holder for federal income tax purposes of shares of Common Stock
or Series B Convertible Preferred Stock resulting from any events or occurrences
giving rise to adjustments pursuant to this Section 8 or from any other similar
event.

     (e) The holder of any shares of Series B Convertible Preferred Stock may
exercise his right to receive in respect of such shares the shares of Common
Stock or other property or securities, as the case may be, to which such holder
is entitled by surrendering for such purpose to the Corporation, at its
principal office or at such other office or agency maintained by the Corporation
for that purpose, a certificate or certificates representing the shares of
Series B Convertible Preferred Stock to be converted, accompanied by a written
notice stating that such holder elects to convert all or a specified number of
such shares in accordance with this Section 8 and specifying the name or names
in which such holder wishes the certificate or certificates for shares of Common
Stock or other property or securities, as the case may be, to which such holder
is entitled to be issued and such other customary documents as are necessary to
effect the conversion.  In case such notice shall specify a name or names other
than that of such holder, such notice shall be accompanied by payment of all
transfer taxes payable upon the issuance in such name or names of shares of
Common Stock or other property or securities, as the case may be, to which such
holder has become entitled.  Other than such taxes, the Corporation will pay any
and all issue and other taxes (other than taxes based on income) that may be
payable in respect of any issue or delivery of shares of Common Stock or such
other property or securities, as the case may be, to which such holder has
become entitled on conversion of Series B Convertible Preferred Stock pursuant
hereto.  As promptly as practicable, and in any event within five (5) business
days after the surrender of such certificate or certificates and the receipt of
such notice relating thereto and, if applicable, payment of all transfer taxes
(or the demonstration to the satisfaction of the Corporation that such taxes
have been paid), the Corporation shall deliver or cause to be delivered
certificates representing the number of validly issued, fully paid and
nonassessable full shares of Common Stock to which the holder of shares of
Series B Convertible Preferred Stock so converted shall be entitled or such
other property or assets, as the case may be, to which such holder has become
entitled.  The date upon which a holder delivers to the Corporation a notice of
conversion and the accompanying documents referred to above is referred to
herein as the "Conversion Date."

                                       12
<PAGE>

     (f) From and after the Conversion Date, a holder of shares of Series B
Convertible Preferred Stock shall have no voting or other rights with respect to
the shares of Series B Convertible Stock subject thereto, other than the right
to receive upon delivery of the certificate or certificates evidencing shares of
Series B Convertible Preferred Stock as provided by paragraph 8(e), the
securities or property described in this Section 8.

     (g) In connection with the conversion of any shares of Series B Convertible
Preferred Stock, no fraction of a share of Common Stock shall be issued, but in
lieu thereof the Corporation shall pay a cash adjustment in respect of such
fractional interest in an amount equal to such fractional interest multiplied by
the Current Market Price per share of Common Stock on the day on which such
shares of Series B Convertible Preferred Stock are deemed to have been
converted.

     (h) Upon conversion of any shares of Series B Convertible Preferred Stock,
if there are any accrued but unpaid dividends thereon, the Corporation shall, at
its option, either pay the same in cash or deliver to the holder an additional
number of fully paid and nonassessable shares of Common Stock determined by
dividing the amount of such accrued and unpaid dividends by the Conversion
Price.

     (i) The Corporation shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for the purpose of effecting
the conversion of the Series B Convertible Preferred Stock, such number of
shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all then outstanding shares of Series B Convertible Preferred
Stock. The Corporation shall from time to time, in accordance with the laws of
Delaware, increase the authorized amount of Common Stock if at any time the
number of authorized shares of Common Stock remaining unissued shall not be
sufficient to permit the conversion at such time of all then outstanding shares
of Series B Convertible Preferred Stock.

     Section 9.  Reports as to Adjustments.  Whenever the Conversion Price is
                 -------------------------
adjusted as provided in Section 8 hereof, the Corporation shall (i) promptly
place on file at its principal office and at the office of each transfer agent
for the Series B Convertible Preferred Stock, if any, a statement, signed by an
officer of the Corporation, setting forth in reasonable detail the event
requiring the adjustment and the method by which such adjustment was calculated
and specifying the new Conversion Price, and (ii) promptly mail to the holders
of record of the outstanding shares of Series B Convertible Preferred Stock at
their respective addresses as the same shall appear in the Corporation's stock
records a notice stating that the number of shares of Common Stock into which
the shares of Series B Convertible Preferred Stock are convertible has been
adjusted and setting forth the new Conversion Price (or describing the new
stock, securities, cash or other property) as a result of such adjustment, a
brief statement of the facts requiring such adjustment and the computation
thereof, and when such adjustment became effective.

     Section 10.  Definitions.  For the purposes of the Certificate of
                  -----------
Designations, Preferences and Rights of Series B Convertible Redeemable
Preferred Stock which embodies this resolution:

     "Current Market Price" per share of Common Stock on any date for all
purposes of Section 8 shall be deemed to be the closing price per share of
Common Stock on the date

                                       13
<PAGE>

specified. For all other purposes hereunder, "Current Market Price" on any date
shall be deemed to be the average of the closing prices per share of Common
Stock for the five (5) consecutive trading days ending two trading days prior to
such date. The closing price for each day shall be the last sale price, regular
way or, in case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Common Stock is
not listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Common Stock is listed or admitted to trading or, if the Common Stock is not
listed or admitted to trading on any national securities exchange, the last
quoted sale price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System ("NASDAQ")
or such other system then in use, or, if on any such date the Common Stock is
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Common
Stock selected by the Board of Directors. If the Common Stock is not publicly
held or so listed or publicly traded, "Current Market Price" shall mean the Fair
Market Value per share as determined in good faith by the Board of Directors of
the Corporation.

     "Fair Market Value" means the amount which a willing buyer would pay a
willing seller in an arm's-length transaction as determined in good faith by the
Board of Directors of the Corporation, unless otherwise provided herein.

     "Person" means any individual, firm, corporation or other entity, and shall
include any successor (by merger or otherwise) of such entity.

     "Trading Day" means a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
the transaction of business or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.

     Section 11.  Rank. The Series B Convertible Preferred Stock shall, with
                  ----
respect to payment of dividends, redemption payments and rights upon
liquidation, dissolution or winding up of the Corporation, rank (i) prior to the
Common Stock of the Corporation and any class or series of Preferred Stock which
provides by its terms that it is to rank junior to the Series B Preferred Stock
and (ii) on a parity with each other class or series of Preferred Stock of the
Corporation.

     Section 12.  Alternate Consideration.  For purposes of determining the
                  -----------------------
consideration payable upon exercise of the optional redemption provided in
Section 4(a)(ii) and upon the exercise of the Exchange Right provided in Section
5, if there shall have occurred a Transaction, as defined in Section 8(b)(iii),
the Common Stock that would otherwise have been issued to a holder of Series B
Convertible Preferred Stock for each share of Series B Convertible Preferred
Stock pursuant to Section 4(a)(ii) or Section 5, as applicable, shall be deemed
to instead be the kind and amount of shares of stock or other securities and
property receivable (including cash)

                                       14
<PAGE>

upon consummation of such Transaction (the "Alternate Consideration") in respect
of the Common Stock that would result in the Fair Market Value of such Alternate
Consideration, measured as of the Redemption Date or Exchange Date, as
applicable, being equal to (X) if prior to Stockholder Approval, the greater of
(a) the Liquidation Value plus all dividends accrued and unpaid with respect to
such share of Series B Convertible Preferred Stock, whether or not declared,
measured as of the Redemption Date or the Exchange Date, as applicable, and (b)
the Fair Market Value of the kind and amount of shares of stock and other
securities and property receivable (including cash) pursuant to Section
8(b)(iii) which would have been issued if such share of Series B Convertible
Preferred Stock had been converted pursuant to Section 8 immediately prior to
the consummation of the Transaction; or (Y) if after Stockholder Approval, the
Liquidation Value plus all dividends accrued and unpaid with respect to such
share of Series B Convertible Preferred Stock, whether or not declared, measured
as of the Redemption Date or Exchange Date, as applicable. In the event the
subject Transaction provides for an election of the consideration to be received
in respect of the Common Stock, then each holder of Series B Convertible
Preferred Stock shall be entitled to make a similar election with respect to the
Alternate Consideration to be received by it under Section 4(a)(ii) or Section
5, as applicable. Any determination of the Fair Market Value of any Alternate
Consideration (other than cash) shall be determined by an independent investment
banking firm of nationally recognized standing selected by the Board of
Directors of the Corporation. The Fair Market Value of any Alternate
Consideration that is listed on any national securities exchange or traded on
the NASDAQ National Market shall be deemed to be the Current Market Price of
such Alternate Consideration.

                                       15
<PAGE>

     IN WITNESS WHEREOF, NORTHROP GRUMMAN CORPORATION has caused this
Certificate of Designations, Preferences and Rights of Series B Convertible
Preferred Stock to be duly executed by its ___________ and attested to by its
Secretary this ___ day of ______________, 2001.

                              NORTHROP GRUMMAN CORPORATION

                              By: __________________________________
                              Name:

ATTEST:

By:  __________________________________
Name:

                                       16<PAGE>

                                                                    EXHIBIT 10.3

                                    FORM OF
                    CHANGE OF CONTROL EMPLOYMENT AGREEMENT

     AGREEMENT by and between Litton Industries, Inc., a Delaware corporation
(the "Company") and ____________________ (the "Executive"), dated as of the
_____ day of __________, _____.

     The Board of Directors of the Company (the "Board") has determined that it
is in the best interests of the Company and its shareholders to assure that the
Company will have the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of
the Company.  The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
which ensure that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     1.   Certain Definitions.
          -------------------

          (a) The "Effective Date" shall mean the first date during the Change
of Control Period (as defined in Section 1(b)) on which a Change of Control (as
defined in Section 2) occurs.  Anything in this Agreement to the contrary
notwithstanding, if a Change of Control occurs and if the Executive's employment
with the Company is terminated prior to the date on which the Change of Control
occurs, and if it is reasonably demonstrated by the Executive that such
termination of employment (i) was at the request of a third party who has taken
steps reasonably calculated to effect a Change of Control or (ii) otherwise
arose in connection with or anticipation of a Change of Control, then for all
purposes of this Agreement the "Effective Date" shall mean the date immediately
prior to the date of such termination of employment.

           (b) The "Change of Control Period" shall mean the period commencing
on the date hereof and ending on the third anniversary of the date hereof;
provided, however, that commencing on the date one year after the date hereof,
--------  -------
and on each annual anniversary of such date (such date and each annual
anniversary thereof shall be hereinafter referred to as the "Renewal Date"),
unless previously terminated, the Change of Control Period shall be
automatically extended so as to terminate three years from such Renewal Date,
unless at least 60 days prior to the Renewal Date the Company shall give notice
to the Executive that the Change of Control Period shall not be so extended.
<PAGE>

     2.   Change of Control.  For the purpose of this Agreement, a "Change of
          -----------------
Control" shall mean:

          (a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of
either (i) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (a), the following
--------  -------
acquisitions of stock shall not constitute a Change of Control:  (i) any
acquisition directly from the Company, (ii) any acquisition by the Company,
(iii) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the Company or
(iv) any acquisition by any corporation pursuant to a transaction which complies
with clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or

          (b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
       --------  -------
the date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

          (c) Consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (ii) no
Person (excluding any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 30% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination, and (iii) at least a majority of the members
of the board of directors of the corporation resulting

                                       2
<PAGE>

from such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or

         (d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

     3.  Employment Period.  The Company hereby agrees to continue the Executive
         -----------------
in its employ, and the Executive hereby agrees to remain in the employ of the
Company subject to the terms and conditions of this Agreement, for the period
commencing on the Effective Date and ending on the third anniversary of such
date (the "Employment Period").

     4.  Terms of Employment.
         -------------------

         (a)  Position and Duties.
              -------------------

              (i)  During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements), authority,
duties and responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised and assigned at any
time during the 120-day period immediately preceding the Effective Date and (B)
the Executive's services shall be performed at the location where the Executive
was employed immediately preceding the Effective Date or any office or location
less than 35 miles from such location.

              (ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities.  During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement.  It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company.

         (b)  Compensation.
              ------------

              (i)  Base Salary. During the Employment Period, the Executive
                   -----------
shall receive an annual base salary ("Annual Base Salary"), which shall be paid
at a monthly rate, at least equal to twelve times the highest monthly base
salary paid or payable, including any base salary which has been earned but
deferred, to the Executive by the Company and its affiliated companies in
respect of the twelve-month period immediately preceding the month in which the
Effective Date occurs. During the Employment Period, the Annual Base Salary
shall be
                                       3
<PAGE>

reviewed no more than 12 months after the last salary increase awarded to the
Executive prior to the Effective Date and thereafter at least annually. Any
increase in Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. Annual Base Salary shall not
be reduced after any such increase and the term Annual Base Salary as utilized
in this Agreement shall refer to Annual Base Salary as so increased. As used in
this Agreement, the term "affiliated companies" shall include any company
controlled by, controlling or under common control with the Company.

          (ii)  Annual Bonus.  In addition to Annual Base Salary, the Executive
                ------------
shall be awarded, for each fiscal year ending during the Employment Period, an
annual bonus in cash at least equal to the Executive's highest award under the
Company's Performance Award Plan(s), or any comparable bonus under any
predecessor or successor plan, for the last three full fiscal years prior to the
Effective Date (any such award shall be annualized for any fiscal year in the
event that the Executive was not employed by the Company for the whole of such
fiscal year) (the "Annual Bonus").  Each such Annual Bonus plus unpaid but due
amounts from prior awards shall be paid in accordance with the terms of the
Performance Award Plan or successor plan, but in no event later than such amount
would have been paid under the Performance Award Plan.  Any portion of an award
made under the Performance Award Plan, or any comparable or successor plan,
shall be paid on the last day of the Employment Period to the extent not
previously paid but only if the Executive is employed on such date.

          (iii) Incentive, Savings and Retirement Plans.  During the Employment
                ---------------------------------------
Period, the Executive shall be entitled to participate in all incentive
(including stock option or similar incentive plans), savings and retirement
plans, practices, policies and programs applicable generally to other peer
executives of the Company and its affiliated companies, but in no event shall
such plans, practices, policies and programs provide the Executive with
incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit opportunities, in each
case, less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for the Executive under
such plans, practices, policies and programs as in effect at any time during the
120-day period immediately preceding the Effective Date or if more favorable to
the Executive, those provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated companies.

          (iv)  Welfare Benefit Plans.  During the Employment Period, the
                ---------------------
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and
travel accident insurance plans and programs) to the extent applicable generally
to other peer executives of the Company and its affiliated companies, but in no
event shall such plans, practices, policies and programs provide the Executive
with benefits which are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those provided generally
at any time after the Effective Date to other peer executives of the Company and
its affiliated companies.

                                       4
<PAGE>

          (v)     Expenses. During the Employment Period, the Executive shall be
                  --------
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in accordance with the most favorable policies, practices and
procedures of the company and its affiliated companies in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the Company and its
affiliated companies.

          (vi)    Fringe Benefits.  During the Employment Period, the Executive
                  ---------------
shall he entitled to fringe benefits, including, without limitation, if
applicable, tax and financial planning services, use of an automobile and
payment of related expenses, in accordance with the most favorable plans,
practices, programs and policies of the company and its affiliated companies in
effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.

          (vii)   Office and Support Staff.  During the Employment Period, the
                  ------------------------
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing provided
to the Executive by the company and its affiliated companies at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as provided generally at any time thereafter with
respect to other peer executives of the company and its affiliated companies.

          (viii)  Vacation.  During the Employment Period, the Executive shall
                  --------
be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated companies as
in effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.

     5.   Termination of Employment.
          -------------------------

          (a) Death or Disability.  The Executive's employment shall terminate
              -------------------
automatically upon the Executive's death during the Employment Period.  If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance with
Section 12(b) of this Agreement of its intention to terminate the Executive's
employment.  In such event, the Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such notice by the
Executive (the "Disability Effective Date"); provided that, within the 30 days
                                             --------
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties.  For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's duties
with the Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative.

                                       5
<PAGE>

          (b) Cause.  The Company may terminate the Executive's employment
              -----
during the Employment Period for Cause.  For purposes of this Agreement, "Cause"
shall mean:

              (i)  the willful and continued failure of the Executive to perform
     substantially the Executive's duties with the Company or one of its
     affiliates (other than any such failure resulting from incapacity due to
     physical or mental illness), after a written demand for substantial
     performance is delivered to the Executive by the Board or the Chief
     Executive Officer of the Company which specifically identifies the manner
     in which the Board or Chief Executive Officer believes that the Executive
     has not substantially performed the Executive's duties, or

              (ii) the willful engaging by the Executive in illegal conduct or
     gross misconduct which is materially and demonstrably injurious to the
     Company.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company.  Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer or
a senior officer of the Company or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company.  The cessation
of employment of the Executive shall not be deemed to be for Cause unless and
until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of the
entire membership of the Board at a meeting of the Board called and held for
such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail.

          (c) Good Reason.  The Executive's employment may be terminated by the
              -----------
Executive for Good Reason.  For purposes of this Agreement, "Good Reason" shall
mean:

              (i)  the assignment to the Executive of any duties inconsistent in
     any respect with the Executive's position (including status, offices,
     titles and reporting requirements), authority, duties or responsibilities
     as contemplated by Section 4(a) of this Agreement, or any other action by
     the Company which results in a diminution in such position, authority,
     duties or responsibilities, excluding for this purpose an isolated,
     insubstantial and inadvertent action not taken in bad faith and which is
     remedied by the Company promptly after receipt of notice thereof given by
     the Executive;

              (ii) any failure by the Company to comply with any of the
     provisions of Section 4(b) of this Agreement, other than an isolated,
     insubstantial and inadvertent failure not occurring in bad faith and which
     is remedied by the Company promptly after receipt of notice thereof given
     by the Executive;

                                       6
<PAGE>

              (iii) the Company's requiring the Executive to be based at any
     office or location other than as provided in Section 4(a)(i)(B) hereof or
     the Company's requiring the Executive to travel on Company business to a
     substantially greater extent than required immediately prior to the
     Effective Date;

              (iv)  any purported termination by the Company of the Executive's
     employment otherwise than as expressly permitted by this Agreement; or

              (v)   any failure by the Company to comply with and satisfy
     Section 11(c) of this Agreement.

For purposes of this Section 5(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive.  Anything in this Agreement to the
contrary notwithstanding, a termination by the Executive for any reason during
the 30-day period immediately following the first anniversary of the Effective
Date shall be deemed to be a termination for Good Reason for all purposes of
this Agreement.

          (d) Notice of Termination.  Any termination by the Company for Cause,
              ---------------------
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b) of
this Agreement.  For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than thirty
days after the giving of such notice).  The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.

          (e) Date of Termination.  "Date of Termination" means (i) if the
              -------------------
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the case
may be.

     6.   Obligations of the Company Upon Termination.
          -------------------------------------------

          (a) Good Reason; Other Than for Cause, Death or Disability.  If,
              ------------------------------------------------------
during the Employment Period, the Company shall terminate the Executive's
employment other than for Cause or Disability or the Executive shall terminate
employment for Good Reason:

                                       7
<PAGE>

               (i)  the Company shall pay to the Executive in a lump sum in cash
     within 30 days after the Date of Termination the aggregate of the following
     amounts:

                    A.  the sum of (1) the Executive's Annual Base Salary
          through the Date of Termination to the extent not theretofore paid,
          (2) the product of (x) the Annual Bonus, and (y) a fraction, the
          numerator of which is the number of days in the current fiscal year
          through the Date of Termination, and the denominator of which is 365
          and (3) any compensation previously deferred by the Executive
          (together with any accrued interest or earnings thereon), any awards
          under the Performance Award Plan or any comparable or successor plan
          and any accrued vacation pay, in each case to the extent not
          theretofore paid (the sum of the amounts described in clauses (1),
          (2), and (3) shall be hereinafter referred to as the "Accrued
          Obligations"); and

                    B.  the amount equal to the product of (1) three and (2) the
          sum of (x) the Executive's Annual Base Salary and (y) the Annual
          Bonus, or if higher, any bonus paid with respect to any fiscal year
          during the Employment Period; and

                    C.  utilizing actuarial assumptions no less favorable to the
          Executive than those in effect immediately prior to the Effective
          Date, an amount equal to the difference between (a) the actuarial
          equivalent of the benefit under the Company's qualified defined
          benefit retirement plan (the "Retirement Plan") and any excess or
          supplemental retirement plan in which the Executive participates
          (together, the "SERP") which the Executive would receive if the
          Executive's employment continued for three years after the Date of
          Termination assuming for this purpose that all accrued benefits are
          fully vested, and, assuming that the Executive's compensation in each
          of the three years is that required by Section 4(b)(i) and Section
          4(b)(ii), over (b) the actuarial equivalent of the Executive's actual
          benefit (paid or payable), if any, under the Retirement Plan and the
          SERP as of the Date of Termination;

               (ii) for three years after the Executive's Date of Termination,
     or such longer period as may be provided by the terms of the appropriate
     plan, practice, policy or program, the Company shall continue benefits to
     the Executive and/or the Executive's family at least equal to those which
     would have been provided to them in accordance with the plans, programs,
     practices and policies described in Section 4(b)(iv) of this Agreement if
     the Executive's employment had not been terminated or, if more favorable to
     the Executive, as in effect generally at any time thereafter with respect
     to other peer executives of the Company and its affiliated companies and
     their families; provided, however, that if the Executive becomes reemployed
                     --------  -------
     with another employer and is eligible to receive medical or other welfare
     benefits under another employer provided plan, the medical and other
     welfare benefits described herein shall be secondary to those provided
     under such other plan during such applicable period of eligibility.  For
     purposes of determining eligibility (but not the time of commencement of
     benefits) of the Executive for retiree benefits pursuant to such plans,
     practices, programs and policies, the Executive shall be considered to have
     remained employed until three years after the Date of Termination and to
     have retired on the last day of such period;

                                       8
<PAGE>

               (iii) the Company shall, at its sole expense as incurred,
     provide the Executive with outplacement services the scope and provider of
     which shall be selected by the Executive in his or her sole discretion; and

               (iv)  to the extent not theretofore paid or provided, the Company
     shall timely pay or provide to the Executive any other amounts or benefits
     required to be paid or provided or which the Executive is eligible to
     receive under any plan, program, policy or practice or contract or
     agreement of the Company and its affiliated companies (such other amounts
     and benefits shall be hereinafter referred to as the "Other Benefits").

          (b)  Death.  If the Executive's employment is terminated by reason of
               -----
the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits.  Accrued Obligations shall be
paid to the Executive's estate or beneficiary, as applicable, in a lump sum in
cash within 30 days of the Date of Termination.  With respect to the provision
of Other Benefits, the term Other Benefits as utilized in this Section 6(b)
shall include, without limitation, and the Executive's estate and/or
beneficiaries shall be entitled to receive, benefits at least equal to the most
favorable benefits provided by the Company and affiliated companies to the
estates and beneficiaries of peer executives of the Company and such affiliated
companies under such plans, programs, practices and policies relating to death
benefits, if any, as in effect with respect to other peer executives and their
beneficiaries at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive's estate and/or the
Executive's beneficiaries, as in effect on the date of the Executive's death
with respect to other peer executives of the Company and its affiliated
companies and their beneficiaries.

          (c)  Disability.  If the Executive's employment is terminated by
               ----------
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of Accrued Obligations and the timely payment or provision of
Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum
in cash within 30 days of the Date of Termination. With respect to the provision
of Other Benefits, the term Other Benefits as utilized in this Section 6(c)
shall include, and the Executive shall be entitled after the Disability
Effective Date to receive, disability and other benefits at least equal to the
most favorable of those generally provided by the Company and its affiliated
companies to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in
effect generally with respect to other peer executives and their families at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive and/or the Executive's family, as in effect at
any time thereafter generally with respect to other peer executives of the
Company and its affiliated companies and their families.

           (d) Cause; Other than for Good Reason.  If the Executive's employment
               ---------------------------------
shall be terminated for Cause during the Employment Period or if the Executive
voluntarily terminates employment during the Employment Period, excluding a
termination for Good Reason, this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay to the Executive
(x) his or her Annual Base Salary through the Date of Termination, (y) the
amount of any compensation previously deferred by the Executive, and (z) Other

                                       9
<PAGE>

Benefits, in each case to the extent theretofore unpaid.  In such case, all
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
30 days of the Date of Termination.

     7.  Non-Exclusivity of Rights.  Nothing in this Agreement shall prevent or
         -------------------------
limit the Executive's continuing or future participation in any plan, practice,
policy or program provided by the Company or any of its affiliated companies and
for which the Executive may qualify, nor, subject to Section 12(f), shall
anything herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its affiliated
companies.  Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan, policy, practice or program of or
any contract or agreement with the Company or any of its affiliated companies at
or subsequent to the Date of Termination shall be payable in accordance with
such plan, practice, policy or program or contract or agreement except as
explicitly modified by this Agreement.

     8.  Full Settlement.  The Company's obligation to make the payments
         ---------------
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others.  In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Executive obtains other employment.  The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code
of 1986, as amended (the "Code").

     9.  Certain Additional Payments by the Company.
         ------------------------------------------

         (a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of the Executive (whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 9) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.

                                       10
<PAGE>

          (b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by Deloitte &
Touche or such other certified public accounting firm as may be designated by
the Executive (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of
the receipt of notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company.  In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or group
effecting the Change of Control, the Executive shall appoint another nationally
recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder) All
fees and expenses of the Accounting Firm shall be borne solely by the Company.
Any Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by
the Company to the Executive within five days of the receipt of the Accounting
Firm's determination.  Any determination by the Accounting Firm shall be binding
upon the Company and the Executive.  As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Gross-Up Payments which
will not have been made by the Company should have been made ("Underpayment"),
consistent with the calculations required to be made hereunder.  In the event
that the Company exhausts its remedies pursuant to Section 9(c) and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company to or for the
benefit of the Executive.

          (c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment.  Such notification shall be given as soon
as practicable but no later than ten business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid.  The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due).  If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:

              (i)   give the Company any information reasonably requested by the
     Company relating to such claim,

              (ii)  take such action in connection with contesting such claim as
     the Company shall reasonably request in writing from time to time,
     including, without limitation, accepting legal representation with respect
     to such claim by an attorney reasonably selected by the Company,

              (iii) cooperate with the Company in good faith in order
     effectively to contest such claim, and

                                       11
<PAGE>

              (iv) permit the Company to participate in any proceedings
     relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
--------  -------
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses.  Without limitation on the foregoing provisions
of this Section 9(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
           --------  -------
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
    ------- --------
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount.  Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

          (d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 9(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 9(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto).  If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section 9(c), a determination
is made that the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in writing of its
intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.

     10.  Confidential Information.  The Executive shall hold in a fiduciary
          ------------------------
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this
Agreement).  After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company or as
may otherwise be required by law or legal

                                       12
<PAGE>

process, communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no event shall an
asserted violation of the provisions of this Section 10 constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under
this Agreement.

     11.  Successors.
          ----------

          (a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution.  This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.

          (b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.

          (c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.  As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid.

     12.  Miscellaneous.
          -------------

          (a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without reference to principles of
conflict of laws.  The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.  This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.

          (b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

               If to the Executive:

               ______________________________

               ______________________________

               ______________________________

               Attention: ___________________

               If to the Company:

               Litton Industries, Inc.
               360 North Crescent Drive
               Beverly Hills, California  90210
               Attention:  General Counsel

                                       13
<PAGE>

or to such other address as either party shall have furnished to the other in
writing in accordance herewith.  Notice and communications shall be effective
when actually received by the addressee.

          (c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

          (d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

          (e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.

          (f) The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive
and the Company, the employment of the Executive by the Company is "at will"
and, subject to Section 1(a) hereof, prior to the Effective Date, the
Executive's employment and/or this Agreement may be terminated by either the
Executive or the Company at any time prior to the Effective Date, in which case
the Executive shall have no further rights under this Agreement.  From and after
the Effective Date this Agreement shall supersede any other agreement between
the parties with respect to the subject matter hereof.

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.

                              _______________________________________
                              [EXECUTIVE]

                              LITTON INDUSTRIES, INC.

                              By:____________________________________

                              Name:__________________________________

                              Title:_________________________________

                                       14

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