1. Contract ID Code Page 1 of 2 Pages
AMENDMENT OF SOLICITATION/MODIFICATION
OF CONTRACT L
- --------------------------------------------------------------------------------
2. Amendment/Modification No. 3. Effective Date
P00025 BLK 16C
- --------------------------------------------------------------------------------
4. Requisition/Purchase Reg. No. 5. Proj. No. (If applicable)
N00024-98-FR-91008 8-385P-91008
- --------------------------------------------------------------------------------
6. Issued By Code N00024 7. Administered By Code N63124
NAVAL SEA SYSTEMS COMMAND
2531 JEFFERSON DAVIS HWY SUPSHIP New Orleans
ARLINGTON VA 22242-5160 New Orleans, LA 70142-5700
BUYER/SYMBOL: J.M. Clement SEA 02225
PHONE: 703/602-3102 ext 225
- --------------------------------------------------------------------------------
8. Name and Address of Contractor 9a. Amendment of Solicitation No.
(No., street, county, State and ZIP Code)
Avondale Industries, Inc.
Shipyard Division 9b. Dated (See Item 11)
P.O. Box 50280
New Orleans, LA 70150-1967
10a. Modification of Contract/
Order No.
[X] N00024-93-C-2205

10b. Dated (See Item 13)
Cage Code 96204 Facility Code NOV 20 1992
- --------------------------------------------------------------------------------
11. This Item Only Applies to Amendments of Solicitations
The above numbered solicitation is amended as set forth in Item 14. The
hour and date specified for receipt of Offers [ ]is [ ] is not extended.

Offers must acknowledge receipt of this amendment prior to the hour and date
specified in the solicitation as amended, by one of the following methods:

(a) By completing Items 8 and 15, and returning 2 copies of the amendment, (b)
By acknowledging receipt of this amendment on each copy of the offer submitted;
or (c) By separate letter or telegram which includes a reference to the
solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGEMENT TO BE
RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND
DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this
amendment you desire to change an offer already submitted, such change may be
made by telegram or letter, provided each telegram or letter makes reference to
the solicitation and this amendment, and is received prior to the opening hour
and date specified.
- --------------------------------------------------------------------------------
12. Accounting and Appropriation Data (if required)
See Attached Financial Accounting Data Sheet
- --------------------------------------------------------------------------------
13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS, IT MODIFIES THE
CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
- --------------------------------------------------------------------------------
[ ] A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES
SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
- --------------------------------------------------------------------------------
[ ] B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REPLACE THE
ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation
data, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR
43.103(b)
- --------------------------------------------------------------------------------
[X] C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
IN ACCORDANCE WITH OPTIONS CLAUSE
- --------------------------------------------------------------------------------
[ ] D. OTHER (Specify type of modification and authority)

- --------------------------------------------------------------------------------
E. IMPORTANT: Contractor (x) is not, ( ) is required to sign this document
and return copies to the issuing office.
- --------------------------------------------------------------------------------
14. Description of Amendment/Modification (Organize by UCF section headings,
including solicitation/contract subject matter where feasible.)

SEE THE FOLLOWING PAGE.

- --------------------------------------------------------------------------------
15B. Contractor/Offeror 15C. Date Signed

----------------------------------------
(Signature of person authorized to sign)
- -------------------------------------------------------------------------------
16A. Name and Title of Contracting Officer (Type or Print)
Jerry M. Clement
Contracting Officer
- -------------------------------------------------------------------------------
16B. United States of America 16C. Date Signed

By /s/ JERRY M. CLEMENT 14 NOV 1997
-------------------------------------
(Signature of Contracting Officer)
- --------------------------------------------------------------------------------
NSN 7540-01-152-8070 30-105 STANDARD FORM 30 (REV 10-83)
PREVIOUS EDITION UNUSABLE Prescribed by GSA
FAR (48 CFR) 53-243

N00024-93-C-2205
P00025
Page 2 of 2

Contract N00024-93-C-2205 provides, in part, under Section B.3, Item(s) 0403AA
through 0411AA that "the Government may require the Contractor to furnish items
0403AA through 0411AA as specified in Section B, for delivery at the time(s) and
place(s) and at the applicable price(s) set forth herein. The Option(s) will be
exercised, if at all, by written or telegraphic notice from the Contracting
Officer sent within the time specified below:"

1. Pursuant to the above provisions, the Government hereby exercises its option
for Item 0403AA through Item 0411AA.

2. As a result of the above option exercise, this modification executes and
fully funds CLINS 0403AA, 0407AA, and 0410AA.

3. Funding in the amount of $209,955,156.00, which consists of $209,707,826.00
for CLIN 0403AA (which includes $1,211,651.00 for Administrative Modifications
thru A00132), $225,178.00 for CLIN 0407AA, and $22,152.00 for CLIN 0410AA is
hereby provided in the attached Financial Accounting Data Sheet to fully fund
the effort in CLINS 0403AA, 0407AA, and 0410AA plus $34,204,000.00 for Item
0403AA for payment of compensation adjustment.

4. The total amount obligated on this modification is $244,159,156.00 which
consists of $209,955,156.00 for the target price as appropriate of
Items 0403AA, 0407AA and 0410AA plus $34,204,000.00 for Item 0303AA for payment
of compensation adjustment thereof.

5. Except as modified above, all other terms, conditions, and prices of Contract
N00024-93-C-2205 remain unchanged and in full force and effect.

FINANCIAL ACCOUNTING DATA SHEET-NAVY

- -----------------------------------------------------------------------------------------------------------------------------------
1. CONTRACT NUMBER (CRITICAL) 2.SPIN (CRITICAL) 3. MOD (CRITICAL) 4. PR NUMBER

N0002493-C-2205 P00025 N0002498FR91008
- -----------------------------------------------------------------------------------------------------------------------------------
5. 6. LINE OF ACCOUNTING
-----------------------------------------------------------------------------------------------------------------------
A. B. C. D. E. F. G. H. I. J. K.
CLIN/SLIN ACRN APPROPRIATION SUBHEAD OBJ PARM RFM SA AAA TT PAA COST CODE
(CRITICAL) (CRITICAL) (CRITICAL) CLA (CRITICAL) ----------------
PROJ PDLI
UNIT MCC & SUF
- -----------------------------------------------------------------------------------------------------------------------------------

0403/AA
0407/AA
0410/AA AS 17 X 4557 8810 312 SA 385 0 068342 2D 000000 22251 200 0000

0403/AA AT 17 X 4557 8810 312 SA 385 0 068342 2D 000000 22251 291 0000

PAGE 1 OF 1

NAVY INTERNAL
AMOUNT USE ONLY
(CRITICAL) REF DOC/ACRN
- ------------------------------------------------------------------------------

$209,707,826.00
$225,178.00
$22,152.00
---------------
$209,955,156.00 N000240XAF0NDSF

$34,204,000.00 N000240XAF0NDSF

---------------
PAGE TOTAL $244,159,156.00
---------------
GRAND TOTAL $244,159,156.00
- ------------------------------------------------------------------------------------
PREPARED/AUTHORIZED BY: HENRY W. FITZPATRICK, JR., PMS385P COMPTROLLER APPROVAL:

/S/ Linda D. Grantham /S/ V. JEFFERSON
for 703-602-3130x212
BY DIRECTION OF
11/12/97 CAPT V. H. ACKLEY
DATE: 11/13/97 DEPUTY COMMANDER/COMPTROLLER

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<DESCRIPTION>EXHIBIT 10.1(L)
<TEXT>

1. Contract ID Code Page 1 of 5 Pages
AMENDMENT OF SOLICITATION/MODIFICATION
OF CONTRACT L
- --------------------------------------------------------------------------------
2. Amendment/Modification No. 3. Effective Date
P00028 BLK 16C
- --------------------------------------------------------------------------------
4. Requisition/Purchase Reg. No. 5. Proj. No. (If applicable)
N00024-98-FR-91011 8-385P-91011
- --------------------------------------------------------------------------------
6. Issued By Code N00024 7. Administered By Code N63124
NAVAL SEA SYSTEMS COMMAND SUPSHIP New Orleans
2531 JEFFERSON DAVIS HWY New Orleans, LA 70142-5700
ARLINGTON VA 22242-5160
BUYER/SYMBOL: J.M. Clement SEA 02225
PHONE: 703/602-3102 ext 225
- --------------------------------------------------------------------------------
8. Name and Address of Contractor 9a. Amendment of Solicitation No.
(No., street, county, State and ZIP Code)
Avondale Industries, Inc.
Shipyard Division 9b. Dated (See Item 11)
P.O. Box 50280
New Orleans, LA 70150-1967
10a. Modification of Contract/
Order No.
[X] N00024-93-C-2205

Offers must acknowledge receipt of this amendment prior to the hour and date
specified in the solicitation as amended, by one of the following methods:

(a) By completing Items 8 and 15, and returning 2 copies of the amendment, (b)
By acknowledging receipt of this amendment on each copy of the offer submitted;
or (c) By separate letter or telegram which includes a reference to the
solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGEMENT TO BE
RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND
DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this
amendment you desire to change an offer already submitted, such change may be
made by telegram or letter, provided each telegram or letter makes reference to
the solicitation and this amendment, and is received prior to the opening hour
and date specified.
- --------------------------------------------------------------------------------
12. Accounting and Appropriation Data (if required)
N/A
- --------------------------------------------------------------------------------
13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS, IT MODIFIES THE
CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
- --------------------------------------------------------------------------------
[ ] A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES
SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
- --------------------------------------------------------------------------------
[ ] B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REPLACE THE
ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation
data, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR
43.103(b)
- --------------------------------------------------------------------------------
[X] C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
IN ACCORDANCE WITH OPTIONS CLAUSE
- --------------------------------------------------------------------------------
[ ] D. OTHER (Specify type of modification and authority)

SEE THE FOLLOWING PAGE.

Except as provided herein, all terms and conditions of the document referenced
in Item 9A or 10A, as heretofore changed, remain unchanged and in full force and
effect.
- --------------------------------------------------------------------------------
15A. Name and Title of Signer (Type or print)
E. C. MORTIMER
V. P. GOV'T PROGRAMS
- --------------------------------------------------------------------------------
15B. Contractor/Offeror 15C. Date Signed

/S/ E. C. MORTIMER 2/19/98
----------------------------------------
(Signature of person authorized to sign)
- -------------------------------------------------------------------------------
16A. Name and Title of Contracting Officer (Type or Print)
Jerry M. Clement
Contracting Officer
- -------------------------------------------------------------------------------
16B. United States of America 16C. Date Signed

By /s/ JERRY M. CLEMENT 20 FEB 1998
-------------------------------------
(Signature of Contracting Officer)
- --------------------------------------------------------------------------------
NSN 7540-01-152-8070 30-105 STANDARD FORM 30 (REV 10-83)
PREVIOUS EDITION UNUSABLE Prescribed by GSA
FAR (48 CFR) 53-243

The purpose of this modification is to restate Option Item 0501 as follows:

SECTION B - SUPPLIES OR SERVICES AND PRICES/COSTS

OPTIONS - FY 98 (SEE NOTE C)
----------------------------

ITEM SUPPLIES/SERVICES PRICE/COST
---- ----------------- ----------

0501AA Procurement of Long Lead Target Cost: $21,766,504
Time Material (LLTM) for Target Profit: $ 2,433,496
one ship (See Attached Target Price: $24,200,000
List A and Notes A and Ceiling Price: $26,119,804
D)

0501AB Procurement of Long Lead Target Cost: $23,233,496
Time Material (LLTM) for Target Profit: $ 2,597,504
one ship (See Attached Target Price: $25,831,000
List B and Notes A and Ceiling Price: $27,880,196
D)

0502AA Data for Option Items NSP
0501AA, and 0501AB

OPTIONS - FY 99 (SEE NOTE C)
----------------------------

0501AC Procurement of Long Lead Target Cost: $13,000,000
Time Material (LLTM) for Target Profit: $ 1,453,270
one ship (See Attached Target Price: $14,453,270
List C and Notes A and Ceiling Price: $15,600,000
D)

0502AB Data for Option Item NSP
0501AC

0503 Completion of one Sealift Target Cost: $146,608,817
ship (See Note A) Target Profit: $ 16,389,207
Target Price: $162,998,024
Ceiling Price: $175,930,580

NOTE A: These Items are priced on a 50/50 sharing arrangement
with a ceiling percentage of 120% of Target Cost. (See the
INCENTIVE PRICE REVISION--FIRM TARGET clause of Section I.) FY
99 Option Item 0503 Target Cost, which shall increase upon its
exercise by the amount rolled over from the target cost in FY 98
Option Items 0501AA and 0501AB and FY 99 Option Item 0501AC (as
specified in Note D below), shall be the amount used for
calculating incentive price revision for T-AKR 306. If after the
exercise of FY 98 Option Items 0501AA and/or 0501AB and/or FY 99
Option Item 0501AC, the decision is made not to exercise FY 99
Option Item 0503, only the amount under FY 98 Option Items 0501AA
and/or 0501AB and/or FY 99 Option Item 0501AC, will be used in
the calculation of incentive price revision. All costs under
these items shall reflect cost in DEC 1996 dollars.

NOTE B: These Items are to be priced as firm-fixed-price items.

NOTE C: Option Items to which the option clause in SECTION I-2
applies and which are to be supplied only if and to the extent
said Option Items are exercised

NOTE D: Items to be procured as LLTM are specified in the
attached lists A, B and C, attached hereto. The target cost of
each LLTM option includes the cost of procurement as well as
receipt, long-term storage, protection, and maintenance for the
items until exercise of FY 99 Option Item 05C3. After exercise
of FY99 Option Item 0503 (if option is exercised) the target cost
of FY 98 Option Items 0501AA, 0501AB and FY 99 Option Item
0501AC, whether expended or unexpended, will be merged into FY 99
Option Item 0503 via contract modification such that the Target
Cost, Target Profit, Target Price, and Ceiling Price under FY 98
Option Items 0501AA, 0501AB and FY 99 Option Item 0501AC will be
deleted from the contract and will become part of the Target
Cost, Target Profit, Target Price and Ceiling Price under FY 99
Option Item 0503. After such time, all costs, direct and
indirect, incurred under FY 98 Option Items 0501AA, 0501AB and FY
99 Option Item 0501AC will be deemed to be costs incurred under
FY 99 Option Item 0503 and all payments of costs made under FY 98
Option Items 0501AA, 0501AB and FY 99 Option Item 0501AC will be
deemed to be payments made under FY Option Item 0503.

SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT

The paragraph entitled "Option Item 0501 of FY 98 (if the option
is exercised) - PROCUREMENT OF LONG LEAD TIME MATERIAL FOR ONE
SHIP" is restated to read as follows:

Option FY 98 Items 0501AA, 0501AB and FY 99 Option Item
0501AC (if options are exercised)- PROCUREMENT OF LONG LEAD
TIME MATERIAL FOR ONE SHIP

The Contractor shall procure, as a minimum, the Long
Lead Time Materials in accordance with Attachment A for Item
0501AA, Attachment B for Item 0501AB and Attachment C for
Item 0501AC and within the cost limits stated under Section
B of this contract modification.

SECTION I-2 - CLAUSES INCORPORATED IN FULL TEXT

The Clause "FAR 52.217-7 entitled "OPTION FOR INCREASED QUANTITY
-- SEPARATELY PRICED LINE ITEM (MAR 1989) (NAVSEA VARIATION II)
(SEP 1990)" is restated to read as follows:

OPTION FOR INCREASED QUANTITY -- SEPARATELY PRICED LINE ITEM
(MAR 1989) (NAVSEA VARIATION II) (SEP 1990)

(a) By written notice to the Contractor, The Contracting
Officer may exercise, if at all, any of the Option Items
(for T-AKR 306) identified in Section B and require the
Contractor to provide, within the performance period
specified in Section F, the work described in Section C
for such Option Item(s) at the Target Cost, Target Profit,
Target Price and Ceiling Price and sharing arrangement set
forth in Section B. The Option Item(c) shall be exercised,
if at all, on or before the following dates:

FISCAL YEAR OPTION ITEM ON OR BEFORE:
----------- ---------------------- ---------------
FY 98 0501AA 20 FEB 98
FY 98 0501AB 30 JUN 98
FY 99 0501AC 30 OCT 98

FY 99 0503, 0505, 0507, 0510 31 JAN 99

(b) The exercise of any Item identified under Section B as
an Option Item shall also extend the period of performance
for the Contract Data Requirements List (DD 1423),
Attachment J-5 of the basic contract as modified through all
"A" modification up to A000119, all "P" modlfications up to
P00021, and other changes specified in Section J of this
contract modification.

(c) The Government may require the Contractor to furnish,
if the options are exercised, FY 99 Option Item 0512 as
specified in paragraph B.3 of the basic contract as modified
through all "A" modification up to A000119, all "P"
modifications up to P00021.

(d) In the event that Option Items 0501AB and 0501AC are
not exercised within the time period specified above the
Government reserves the right to still exercise Option Item
0503. In this event the Contractor would be entitled to an
equitable adjustment in Target Cost and period of
performance for T-AKR 306 only. Target profit, target
price, and ceiling would also be adjusted based upon the
agreed profit and ceiling percentage determined in contract
modification P00022 dated 23 May 1997.

SECTION J - LIST OF ATTACHMENTS is modified to add paragraph C)
as follows:

c) List A, B, and C for Long Lead Time Material to be procured
under CLINS 0501AA, 0501AB and 0501AC, respectively.

Contract N00024-93-C-2205 provides, in part, under Section I-2 in
the Clause "FAR 52.217-7 entitled "OPTION FOR INCREASED QUANTITY
-- SEPARATELY PRICED LINE ITEM (MAR 1989) (NAVSEA VARIATION II)
(SEP 1990)" that the Contracting Officer may exercise, if at all,
any of the Option Items (for T-AKR 306) identified in Section B
and require the Contractor to provide, within the performance
period specified in Section F, the work described in Section C
for such Option Item(s) at the Target Cost, Target Profit, Target
Price and Ceiling Price and sharing arrangement set forth in
Section B. The Option Item(s) shall be exercised, if at all,
on or before the following dates:"

Pursuant to the above provisions, the Government hereby exercises
its option for Item 0501AA.

As a result of the above option exercise, this modification
executes and fully funds CLIN 0501AA.

Funding in the amount of $24,200,000.00 is hereby provided in the
attached Financial Accounting Data Sheet to fully fund the effort
in CLIN 0501AA plus $462,756.00 for Item 0501AA for payment of
compensation adjustment.

The total amount obligated on this modification is $24,662,756.00
which consists of $24,200,000.00 for the target price for Item
0501AA plus $462,756.00 for Item 0501AA for payment of
compensation adjustment.

Except as modified above, all other terms, conditions, and prices
of Contract N00024-93-C-2205 remain unchanged and in full force
and effect.

The Government acknowledges that the Long Lead Time Material
(LLTM) funding profile in this Modification is different from
that included in P00022 for Option Item 0501 dated 23 May 1997.
The Government recognizes that in order to accommodate its
revised LLTM funding profile with no change in the total price or
delivery date for Option Item 0503, the Contractor may incur
additional effort and risk in revising work plans and vendor
pricing arrangements. This additional effort, if justified, will
be recognized as a part of the consideration for any future
contract delivery date changes under this contract.

FINANCIAL ACCOUNTING DATA SHEET-NAVY

N0002493-C-2205 P00028 N0002498FR91011
- -----------------------------------------------------------------------------------------------------------------------------------
5. 6. LINE OF ACCOUNTING
-----------------------------------------------------------------------------------------------------------------------
A. B. C. D. E. F. G. H. I. J. K.
CLIN/SLIN ACRN APPROPRIATION SUBHEAD OBJ PARM RFM SA AAA TT PAA COST CODE
(CRITICAL) (CRITICAL) (CRITICAL) CLA (CRITICAL) ----------------
PROJ PDLI
UNIT MCC & SUF
- -----------------------------------------------------------------------------------------------------------------------------------

0501/AA AU 17 X 4557 8810 312 SA 385 0 068342 2D 000000 22252 200 0000

0501/AA AV 17 X 4557 8810 312 SA 385 0 068342 2D 000000 22252 291 0000

PAGE 1 OF 1

NAVY INTERNAL
AMOUNT USE ONLY
(CRITICAL) REF DOC/ACRN
- ------------------------------------------------------------------------------

$24,200,000.00 N000240XAF0NDSF

$462,756.00 N000240XAF0NDSF

--------------
PAGE TOTAL $24,662,756.00
--------------
GRAND TOTAL $24,662,756.00
- ------------------------------------------------------------------------------------
PREPARED/AUTHORIZED BY: HENRY W. FITZPATRICK, JR., PMS385P COMPTROLLER APPROVAL:

/S/ HENRY W. FITZPATRICK, JR. /S/ V. JEFFERSON
V. JEFFERSON
BY DIRECTION OF
CAPT V. H. ACKLEY
DATE: 2/13/98 DEPUTY COMMANDER/COMPTROLLER

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<DESCRIPTION>EXHIBIT 10.3(C)
<TEXT>

AMENDMENT NUMBER FIVE
TO
AVONDALE INDUSTRIES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN

WHEREAS, Avondale Industries, Inc., a corporation
organized and existing under the laws of the State of
Louisiana, adopted the Avondale Industries, Inc. Employee
Stock Ownership Plan (the "Plan") effective September 1, 1985,
said Plan has been amended from time to time, said Plan was
amended and restated on December 28, 1994 effective January 1,
1989;

WHEREAS, Avondale Industries, Inc. reserved the right to
amend the Plan by resolution of the Board of Directors;

WHEREAS, it is desirable to amend the Plan to clarify the
Plan's reemployment rules, to permit a distribution without
Participant consent of Accounts valued at $5,000 or less
effective January 1, 1998, to permit Participants who attain
age of 70 1/2 in 1996, 1997, or 1998 to elect to commence
distributions or defer receipt of distributions until
retirement, to further revise the definition of Required
Beginning Date to conform to the Small Business Job Protection
Act of 1996 as interpreted by recent IRS Announcements and
Notices, and to make other revisions and clarifications;

NOW, THEREFORE, as authorized by Section 11.1, the Plan
is hereby amended, effective January 1, 1997, unless stated
otherwise, as follows:

Article I, Section 1.15A, Employment Year, is amended and
restated to read as follows:

1.15A Employment Year shall mean the twelve
consecutive month period of employment commencing on
the date the Employee performs his first Hour of
Service for the Employer and each anniversary
thereof. The Employment Year for a reemployed
Eligible Employee is determined in Section 2.3.

II.

Article I, Section 1.33, Service Termination Date, is
added effective with respect to each Employee as of his
Employment Year beginning on or after January 1, 1997:

1.33 Service Termination Date shall mean the
earliest of the following:

(a) the date on which an Employee resigns,
is discharged, retires or dies;

(b) the first anniversary of the date on
which an Employee is laid off, starts
an authorized leave of absence, or is
absent from work for any other reason
(other than those instances covered
under paragraphs (a) and (c)),
including holidays, paid vacations,
sick leaves and absence on account of
disability;

(c) the second anniversary of the date on
which an Employee commenced a Parental
Absence, if such Employee has not yet
returned to work with a Participating
or Non-Participating Employer.

III.

Article II, Section 2.3, Participation Following
Reemployment, is amended and restated to read as follows:

2.3 Reemployment of an Eligible Employee or
Former Participant. The following reemployment
rules apply:

a. Resetting the Employment Year. If an
Eligible Employee is reemployed his
Employment Year is reset based on his
reemployment date if the following
conditions are met:

i. the Eligible Employee is not
reemployed until after the end of
the Employment Year of his
Service Termination Date, and

ii. the Eligible Employee has a One
Year Break in Service in the
Employment Year prior to the
Employment Year of his
reemployment date.

b. Reemployment of a Former Participant.
Except as provided in Section 2.3(d),
a "Former Participant" is an Employee
who terminated employment after the
Entry Date following the date on which
he met the requirements of Section
2.1. A Former Participant who is
reemployed shall be treated as if his
employment was not broken. His past
Years of Service for purposes of
vesting will be added to any Years of
Service earned after reemployment.

c. Reemployment of a Non-Participant.

i. If an Eligible Employee who had
not become a Participant is
reemployed and his Employment
Year is not reset, he becomes a
Participant on the first Entry
Date after he meets the
requirements of Sections 1.13 and
2.1.

ii. If an Eligible Employee who had
not become a Participant is
reemployed and his Employment
Year is reset, he becomes a
Participant on the first Entry
Date after he meets the
requirements of Sections 1.13
and 2.1. Hours of Service prior
to reemployment are not
considered for purposes of
determining eligibility to
participate.

iii. If an Eligible Employee who had
previously met the requirements
of Sections 1.13 and 2.1 but had
not yet become a Participant
because he was not employed on an
Entry Date is reemployed and his
Employment Year is not reset, he
shall become a Participant as of
the first Entry Date following
reemployment. If such Eligible
Employee is reemployed and his
Employment Year is reset, he
shall become a Participant on the
first Entry Date following the
completion of one Year of
Service.

d. Reemployment of Non-Vested
Participant. If a Participant who was
not fully vested in his Employer
Contribution Account terminates
employment and is reemployed after
incurring the greater of (i) five
consecutive One Year Breaks in Service
or (ii) the aggregate number of Years
of Service prior to termination, he
shall be treated as a new employee for
purposes of vesting and any Years of
Service accumulated by him prior to
termination shall be disregarded. For
purposes of participation, see Section
2.3(b).

e. Reemployment of Vested Participant.
If a Participant who was fully vested
in his Employer Contribution Account
terminates employment and is
reemployed after any number of One
Year Breaks in Service, he shall be
reinstated as a Participant, if he is
an Eligible Employee, as of the date
he first performs an Hour of Service
following reemployment. However, his
Employment Year may be reset for
vesting purposes based on the rules
stated in Section 2.3(a).

III.

The last paragraph of Article IV, Section 4.3 is hereby
deleted.

IV.

Article IV, Section 4.4, Reemployment, is amended and
restated to read as follows:

4.4 Reemployment. Years of Service prior to
reemployment may be considered, but only
under the circumstances described in
Section 2.3.

Article VII, Section 7.9, Notice, is amended, effective
January 1, 1998, to insert the following as the first three
sentences:

The notice required by Section 1.411(a)-11(c)
of the Income Tax Regulations must be provided
to a Participant no less than 30 days and no
more than 90 days before the date of
distribution. The notice explains a
Participant's right to defer receipt of a
distribution if his Vested Interest exceeds
$5,000 ($3,500 prior to January 1, 1998). A
Participant will also receive an explanation of
his distribution options no less than 30 days
and no more than 90 days before the date of
distribution.

VI.

Article VII, Section 7.10, Minimum Required Distribution,
is amended and restated to read as follows:

7.10 Minimum Required Distributions. The
following provisions apply in the event that a
Participant reaches his Required Beginning Date, as
defined below:

(a) Such Participant is required to
receive a benefit unless the
provisions stated below apply.

(b) If the Participant elects a lump-sum
benefit or an annuity, the date as of
which an annuity benefit or lump sum
benefit is required to begin, shall be
no later than the Participant's
Required Beginning Date.

(c) If the Participant elects to be paid
in annual installments, two annual
installments may be made in the year
of the Participant's Required
Beginning Date. Subsequent annual
installments must be made by the
December 31 of that year. The first
payment applicable to the year in
which the Participant attained age 70
1/2 or, if later, retired, cannot be
made later than the Participant's
Required Beginning Date. The second
annual installment must be made by the
December 31 immediately following the
Participant's Required Beginning Date.

Required Beginning Date shall mean, for anyone,
other than a 5% owner (as defined in Code Section
416(i)(1)(B)(i)), who obtains age 70-1/2 after
December 31, 1998, April 1st of the calendar year
following the later of (a) the calendar year in
which the Employee attains age 70-1/2, or (b) the
calendar year in which the Employee terminates
employment with the Employer.

A Participant (other than a 5% owner) who
attained the age of 70-1/2 in 1996 and has not
retired by the end of 1996 may (i) delay
commencement of minimum distributions until no later
than April 1 following the calendar year in which
the Participant retires from employment with the
Employer or (ii) request make-up distributions for
payments that would have been made in 1997. Such
make-up distributions must be made by December 31,
1997.

A Participant (other than a 5% owner) who
attains the age of 70-1/2 in 1997 or 1998 and
remains employed with an Employer, may elect to
delay commencement of minimum distributions until no
later than April 1 following the calendar year in
which the Participant retires from employment with
an Employer.

A Participant, other than a 5% owner, who
attained age 70-1/2 before 1997 but did not retire
from employment with a Participating Employer before
January 1, 1997, may elect at any time prior to
December 31, 1997, with the consent of his spouse
and subject to the terms of any applicable qualified
domestic relations order, to cease further
distributions until a later date. Pursuant to IRS
Notice 97-75 Q&A-8(b), if such Participant elects to
cease minimum distributions, there will be no new
annuity starting date upon recommencement.

The Required Beginning Date of a Participant
who is a five percent owner (as defined in Code
Section 416(i)(1)(B)(i)) of the Employer shall be
April 1st following the calendar year in which the
Participant reaches age 70-1/2.

For Plan Years beginning prior to January 1,
1997, Required Beginning Date was defined as April
1st of the calendar year following the calendar year
in which a Participant attains age 70-1/2.

IN WITNESS WHEREOF, Avondale Industries, Inc. has caused
this amendment to be executed in multiple originals by its
officers thereunto duly authorized and its corporate seal to
be hereunto affixed, as of the 30th day of December, 1997.

AVONDALE INDUSTRIES, INC

BY: /s/ Thomas M. Kitchen
---------------------
Thomas M. Kitchen,
Secretary

ATTEST

/s/ Eugene K. Simon, Jr.
------------------------
(Corporate Seal)

ACKNOWLEDGMENT

STATE OF LOUISIANA

PARISH OF JEFFERSON

BEFORE ME, the undersigned Notary Public, personally came
and appeared Thomas M. Kitchen, who being by me sworn did
depose and state that he signed the foregoing Amendment Number
Five to the Avondale Industries, Inc. Employee Stock Ownership
Plan as a free act and deed on behalf of Avondale Industries,
Inc. for the purposes therein set forth.

/s/ Thomas M. Kitchen
---------------------
Thomas M. Kitchen

SWORN TO AND SUBSCRIBED
BEFORE ME THIS 30TH DAY
OF DECEMBER, 1997.

/s/ Rudolph R. Ramelli
----------------------
NOTARY PUBLIC