AMENDMENT NUMBER TWO
TO
AVONDALE INDUSTRIES, INC.
401(k) SAVINGS PLAN
WHEREAS, Avondale Industries, Inc., ("Employer") is the
sponsor of the Avondale Industries, Inc. 401(k) Savings Plan
(the "Plan") which was adopted effective January 1, 1996;
WHEREAS, the Plan can be amended by the Employer.
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 13.1, the Plan
is hereby amended, effective January 1, 1997, unless stated
otherwise, as follows:
I.
Article I, Section 1.20A, Employment Year, is amended and
restated to read as follows:
1.20A Employment Year shall mean the twelve
month period of employment commencing on the date
the Employee first Hours 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 1.34B, Required Beginning Date is
deleted.
III.
Article I, Section 1.36, Service Termination Date, is
added effective with respect to each Employee as of his
Employment Year beginning on or after January 1, 1997:
1.36 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 2.1, Commencement of Participation,
is amended and restated to read as follows:
2.1 Commencement of Participation. Each person
who is an Eligible Employee shall become a
Participant on the Entry Date which coincides with
or immediately follows the date (a) which such
Eligible Employee attained age 21 and (b) on which
such Eligible Employee completed one Year of
Service, provided he is employed by a Participating
Employer on such date.
IV.
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. Such
Employee, if an Eligible Employee,
shall be allowed to make Employee-
Deferrals pursuant to Section 3.1.
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 1.12 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 1.12 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 1.12 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).
V.
Article VI, Section 6.4(c) is hereby deleted.
VI.
Article VI, Section 6.5, Reemployment Before Break in
Service, is amended and restated to read as follows:
6.5 Reemployment. Years of Service prior to
reemployment may be considered, but only under the
circumstances described in Section 2.3.
VII.
Section 6.6, Reemployment After Break in Service, is
hereby deleted.
VIII.
Article X, Section 10.1, Time of Payment, is amended and
restated to read as follows:
10.1 Time of Payment. A Participant shall be
eligible to receive a distribution of his Vested
Interest when he has terminated employment. A
distribution is based upon the value of the
Participant's Vested Interest as of the Valuation
Date coincident with or immediately preceding the
date of distribution.
a. If the value of a Participant's
Vested Interest is $5,000 or less
($3,500 prior to January 1,
1998), the Vested Interest will
be distributed 30 days following
his date of termination or as
soon as administratively
practicable thereafter but no
later than the 60th day after the
latest of the close of the Plan
Year in which (a) the Participant
attains age 65, or (b) terminates
employment with all Participating
Employers;
b. If the value of a Participant's
Vested Interest is greater than
$5,000 ($3,500 prior to January
1, 1998), the Participant must
consent to the distribution.
Such a Participant's Vested
Interest cannot be made sooner
than 30 days following his date
of termination and no later than
the Participant's Required
Beginning Date.
A distribution may occur while a Participant
remains in the employ of an Employer, in the event
of a withdrawal by reason of Financial Hardship or
after age 59 1/2, as described in Sections 11.1 and
11.2, below.
The distribution rules that apply to an
"alternate payee" pursuant to a "qualified domestic
relations order" are stated in Section 9.4 herein.
Required Beginning Date shall mean, for
anyone, other than a 5% owner (as defined in Code
Section 416(i)(1)(B)(i)), who attains 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.
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 attains 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 attained the age of 70-1/2.
IX.
The second sentence of Article X, Section 10.6, Notice,
is amended and restated, effective January 1, 1998, to read as
follows:
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).
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
Two to the Avondale Industries, Inc. 401(k) Savings 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