AMENDMENT NUMBER THREE
                                          TO
                              AVONDALE INDUSTRIES, INC.
                                     PENSION PLAN


               WHEREAS,  Avondale Industries, Inc., a corporation organized
          and existing under  the  laws  of the State of Louisiana, adopted
          the Avondale Industries, Inc. Pension Plan (the "Plan") effective
          September 1, 1985, said Plan has  been amended from time to time,
          and  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  as  required  or
          allowed  by  the  Family  and  Medical  Leave  Act  of  1993, the
          Uniformed  Services  Employment  and  Reemployment Rights Act  of
          1994,  the  Retirement  Protection Act of  1994,  and  the  Small
          Business Job Protection Act of 1996; to clarify the employees who
          are  eligible  to participate;  to  revise  the  commencement  of
          participation date;  to  change "Year of Service" from an elapsed
          time method to an Hours of  Service  method  for  the  purpose of
          eligibility and vesting; and to make further clarifications:

               NOW, THEREFORE, as authorized by Section 11.1 and resolution
          of  the Board of Directors, the Plan is hereby amended, effective
          as of the date executed, unless stated otherwise, as follows:

                                          I.

               Article I, Section 1.2, Actuarial Equivalent, is amended and
          restated, effective January 1, 1997, to read as follows:

                         1.2  Actuarial  Equivalent  shall mean a
                    benefit  of equivalent current value  to  the
                    benefit  which   otherwise  would  have  been
                    provided  to the Participant,  determined  on
                    the basis of  (a) the UP-1984 Mortality Table
                    set forward one year for males, set back four
                    years for females  and  weighted 95% male and
                    5%  female  and  (b)   7.0% annual  interest.
                    Provided, however, that  the  interest factor
                    used in determining a lump sum value shall be
                    as follows: (i) prior to 1997,  the  interest
                    rate  used  by  the  Pension Benefit Guaranty
                    Corporation as of January  1  of the calendar
                    year in which the determination  date occurs;
                    and  (ii)  on  or after January 1, 1997,  the
                    Applicable  Interest  Rate.   The  Applicable
                    Interest Rate  is the annual rate of interest
                    on 30-year Treasury securities for the second
<PAGE>
                    calendar month preceding  the  Plan  Year  in
                    which   the  date  of  determination  occurs.
                    Further,  on  or  after  January 1, 1997, the
                    determination of a lump sum  benefit shall be
                    based on the Applicable Mortality Table.  The
                    Applicable Mortality Table is  the  mortality
                    table  prescribed  in Revenue Ruling 95-6  or
                    any  successor publication  of  the  Service.
                    However,  the determination of the annuitized
                    value of the  Participant's account under the
                    Avondale  ESOP  for   purposes   of   Section
                    4.1(a)(iv)  and  Section  4.1(b)(iii)  of the
                    Plan  shall  be based on no mortality and  7%
                    annual interest  for the period, if any, from
                    (i)  the  date  the  Participant   terminates
                    employment with the Participating Employer or
                    Non-Participating   Employer,   retires    or
                    becomes  totally  and  permanently  disabled,
                    whichever    is    earlier,   to   (ii)   the
                    Participant's Normal Retirement Date.

                                         II.

               The family aggregation rules  under  Code Section 401(a)(17)
          and  414(q)(6)  are hereby deleted for all Plan  Years  beginning
          after 1996.  This applies to the third and fourth sentence of the
          third paragraph of  Section  1.10, Compensation.  These sentences
          continue to apply for Plan Years  beginning  prior  to January 1,
          1997.

                                         III.

               Article I, Section 1.10, Compensation is amended,  effective
          October  13, 1994, to add the following paragraph at the end,  to
          read as follows:

                         The  Compensation of a Returning Veteran
                    for  a  prior   year   in   which   a  makeup
                    contribution  is required under the Uniformed
                    Services Employment  and  Reemployment Rights
                    Act  shall  be  (a)  the  pay  the  Returning
                    Veteran  would  have received if not  in  the
                    Uniformed Services  (including wage increases
                    and bonuses) or (b) if  it is not "reasonably
                    certain"  what  the  pay  rate   during   the
                    Uniformed   Services  would  have  been,  the
                    Returning Veteran's  average  earnings during
                    the  twelve  months  (or  shorter period,  if
                    applicable)  prior  to  the  Service  in  the
                    Uniformed Services.

                                         IV.

               Article I, Section 1.11, Compensation  Year,  is amended and
          restated, effective January 1, 1997, to read as follows:

                         1.11  Compensation  Year shall mean each
                    calendar year in which an  Employee  employed
                    by   a   Participating   Employer   or   Non-
<PAGE>
                    Participating  Employer  on  December 31st of
                    such year, or if not employed on such date is
                    reemployed  by  a Participating  Employer  or
                    Non-Participating  Employer  within 12 months
                    of his termination of employment.

                                          V.

               Article I, Section 1.16, is amended and restated, to read as
          follows:

                         1.16 An Eligible Employee shall mean any
                    Employee   of   a   Participating   Employer;
                    provided,  however, that an Eligible Employee
                    shall not include:   (a) any  Employee who is
                    included in a unit of employees  covered by a
                    negotiated  collective  bargaining  agreement
                    which  does not provide for his participation
                    in  this   Plan;   (b) any  Employee  who  is
                    providing services pursuant  to  an  oral  or
                    written  contract or leasing arrangement with
                    an unrelated employer, including any Employee
                    who under a Participating Employer's standard
                    personnel     practices,    is    deemed    a
                    subcontractor or  a  leased employee; (c) any
                    Employee who is a Leased  Employee;  (d)  any
                    Employee    who,    under   a   Participating
                    Employer's standard personnel  practices,  is
                    deemed  an  independent  contractor  (without
                    regard  to  such  person's status for Federal
                    income tax purposes and without regard to any
                    subsequent determination  that such person is
                    a common law employee) and  (e) any  Employee
                    who,   under   a   Participating   Employer's
                    standard  personnel  practices,  is deemed  a
                    contractor,  jobber,  or  a consultant.   All
                    determinations  shall  be made  in  the  sole
                    discretion of the Participating Employer in a
                    uniform non-discriminating manner.

                                         VI.

               Section 1.17, Employee, is amended  and restated, to read as
          follows:

                         1.17 Employee shall mean any  person who
                    is  employed  by a Participating Employer  or
                    Non-Participating  Employer  as  a common law
                    employee  receiving  remuneration subject  to
                    withholding  for  purposes   of  the  Federal
                    Insurance   Contribution  Act  (except   that
                    Leased  Employees  as  described  in  Section
                    414(n)(2)  of  the  Code  shall be considered
                    Employees solely for purposes  of determining
                    whether the requirements of Section 414(n)(3)
                    of  the  Code are satisfied).  A director  of
                    the Company is not eligible for participation
                    in the Plan unless he is also an Employee.

<PAGE>
                                         VII.

               Article I is amended  to  add  Section 1.18A, effective with
          respect  to  each  Employee  as  of  the  first  Employment  Year
          beginning on or after January 1, 1997, to read as follows:

                         1.18A  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.

                                        VIII.

               Article  I,  Section  1.18B,  Entry  Date,  is  amended  and
          restated to read as follows:

                         1.18B Entry Date shall mean January 1 or
                    July 1 for anyone whose first Employment Year
                    begins  on  or  after  January  1,  1997.  An
                    Employee hired before this date will become a
                    Participant  on  the  first  day of the month
                    coincident with or next following the date on
                    which  he meets the eligibility  requirements
                    that  were   in   effect   at  the  time  his
                    employment began.

                                         IX.

               Article I, Section 1.21, Hour of  Service, is amended to add
          a new paragraph (d), effective  October  13,  1994,  to  read  as
          follows:

                         (d)  If  an  Employee is absent from his
                              or her employment with the Employer
                              for  any  period   on   account  of
                              (i) Parental  Absence, or  (ii) any
                              period  of leave  recognized  under
                              the Family and Medical Leave Act of
                              1993,  such   Employee   shall   be
                              credited  with  sufficient Hours of
                              Service (not in excess  of  501  in
                              any  Plan  Year) so that a Break in
                              Service does  not  occur  in either
                              the  Employment Year in which  such
                              absence   begins   (if   credit  is
                              required  to  preclude  a Break  in
                              Service  in  such year) or  in  the
                              immediately  following   Employment
                              Year  (if no credit was awarded  in
                              the   preceding    year).    If   a
                              Returning Veteran was  absent  from
                              his  or  her  employment  with  the
                              Employer  on  account of Service in
                              the    Uniformed   Services,    the
                              Returning Veteran shall be credited
                              with sufficient Hours of Service so
                              that a Break  in  Service  does not
                              occur.   For  purposes of computing
<PAGE>
                              Hours  of  Service  credited  under
                              this  paragraph  (d),  an  Employee
                              shall be credited with (i) Hours of
                              Service  which  would  otherwise be
                              credited  to such Employee  without
                              regard to the  absence,  or  (ii) 8
                              Hours  of  Service for each day  of
                              the absence.  The Committee, in its
                              sole   discretion,    may   require
                              (i) evidence that the absence is on
                              account  of a reason enumerated  in
                              this     paragraph     (d),     and
                              (ii) evidence as to the duration of
                              the absence.

                                          X.

               Article I, Section 1.21(b),  Hour  of  Service,  is amended,
          effective  October  13,  1994  to  delete  the  phrase  "military
          service" and to restate the last paragraph, to read as follows:

                    To  the  extent  not credited above, Hours of
                    Service will also  be  credited,  for vesting
                    purposes, based on the customary work week of
                    the  Employee for periods of Service  in  the
                    Uniformed Services (as required by applicable
                    law).

                                         XI.

               Article I is  amended  to  add  Section  1.22A,  to  read as
          follows:

                         1.22A  A  Leased Employee shall mean any
                    person (excluding  a  person  who is a common
                    law employee of the Participating Employer or
                    Non-Participating Employer) who,  pursuant to
                    an agreement between a Participating Employer
                    (or  an  Affiliated  Company)  and any  other
                    person ("leasing organization") has performed
                    services  for the Participating Employer  (or
                    an Affiliated  Company)  and  related persons
                    determined   in   accordance   with   Section
                    414(n)(6)  of  the  Code, on a "substantially
                    full-time basis" for a period of at least one
                    year and:  for Plan Years  after  1996,  such
                    services  are  performed  under  the  primary
                    direction   or  control  of  a  Participating
                    Employer  (or  an  Affiliated  Employer); for
                    Plan  Years prior to 1997, such services  are
                    of the  type  historically  performed, in the
                    business field of the Participating  Employer
                    (or an Affiliated Employer) by employees.

                         A person is considered to have performed
                    services on a "substantially full-time basis"
                    for  a  period  of  at  least  one  year  if:
                    (a) during  any  consecutive  12-month period
                    such  person  has  performed  at least  1,500
<PAGE>
                    Hours   of   Service  for  the  Employer   or
                    (b) during any  consecutive  12-month  period
                    such   person   performed  services  for  the
                    Employer for a number  of Hours of Service at
                    least equal to 75% of the  average  number of
                    hours  that are customarily performed  by  an
                    employee  of  the  Employer in the particular
                    position.

                         Such  a  person will  not  be  a  Leased
                    Employee if the  person  (a)  is covered by a
                    money purchase pension plan providing  (i)  a
                    nonintegrated  employer  contribution rate of
                    at least 10% of such person's W-2 wages, (ii)
                    immediate participation, and  (iii)  full and
                    immediate  vesting,  and  (b)  provided,  the
                    Leased Employee, determined without regard to
                    whether  such  person is a participant in the
                    above described   money purchase plan, do not
                    constitute  more  than   20  percent  of  the
                    recipient's nonhighly compensated workforce.

                         In  the event that any  Leased  Employee
                    subsequently  becomes  an  Eligible Employee,
                    then unless the Plan is otherwise excluded by
                    applicable  Treasury  Regulations   from  the
                    requirements  of  Code  Section  414(n),  the
                    total period that such former Leased Employee
                    provided   services   to   the  Participating
                    Employer shall be treated under the Plan, for
                    participation    eligibility   and    vesting
                    purposes as though he had been an Employee of
                    the   Participating    Employer    or    Non-
                    Participating Employer.

                                         XII.

               Article  I,  Section  1.25,  One  Year Break in Service  for
          Benefit  Accrual,  is  amended, effective with  respect  to  each
          Employee as of his first  Employment  Year  beginning on or after
          January 1, 1997, to read as follows:

                         1.25  One  Year  Break  in  Service  for
                    Benefit  Accrual,  for  purposes  of  benefit
                    accrual,  shall  mean  a 12-month consecutive
                    period   following   an  Employee's   Service
                    Termination Date during  which  the  Employee
                    fails to be credited with an Hour of Service.

                                        XIII.

               Article  I,  Section  1.25A, One Year Break in  Service,  is
          amended, effective with respect  to each Employee as of his first
          Employment Year beginning on or after  January  1,  1997 to add a
          new Section 1.25A, to read in its entirety as follows:

                         1.25A  One  Year  Break  in Service, for
                    purposes  of  eligibility to participate  and
                    vesting, shall  mean  an  Employment  Year in
<PAGE>
                    which  a Participant has 500 or less Hours of
                    Service.

                                         XIV.

               Article  I,  Section  1.27,  Participant,  is  amended   and
          restated, to read as follows:

                         1.27   Participant  shall  mean  (a) any
                    Eligible   Employee    who    satisfies   the
                    participation  requirements  set   forth   in
                    Article  II,  and  (b) any former Employee on
                    whose  behalf  an  Account  continues  to  be
                    maintained in the Plan  pursuant  to  Article
                    II.

                         In the event the Plan fails to pass  the
                    coverage  requirements  of  Section 410(b) of
                    the  Code for a Plan Year, certain  Employees
                    will be given "Eligible Employee" status in a
                    number  necessary  to  satisfy  the  coverage
                    requirements  of Section 410(b) of the  Code.
                    "Eligible Employee"  status  will be given to
                    certain  Employees beginning first  with  the
                    Employee   who   has   both   satisfied   the
                    participation  requirements of Article II and
                    has the most recent  original employment date
                    and   continuing   in   descending   original
                    employment   date   order,  to   the   extent
                    necessary for the Plan  to  pass the coverage
                    requirements of Section 410(b)  of  the Code.
                    If  two or more Employees have satisfied  the
                    participation  requirements of Article II and
                    have  the  same  original   employment  date,
                    Employees  will be given "Eligible  Employee"
                    status determined  in  alphabetical  order of
                    the  Employees' last names until the coverage
                    requirements  are  met.   Coverage under this
                    paragraph  only  applies  to  the   year   in
                    question.

                                         XV.

               Article  I  is  amended to add the following Section  1.30A,
          effective October 13, 1994, to read in its entirety as follows:

                         Section  1.30A Returning Veteran means a
                    reemployed Employee  who  gave  notice to the
                    Company  of  his  impending  service  in  the
                    Uniformed Services, (unless such  notice  was
                    precluded   by   military  necessity  or  was
                    otherwise impossible  or  unreasonable),  and
                    the  cumulative  length  of  absence from the
                    Company by reason of Service in the Uniformed
                    Services does not exceed five years.

                                         XVI.

               Article  I  is amended to add the following  Section  1.30B,
<PAGE>
          effective October 13, 1994, to read in its entirety as follows:

                         Section  1.30B  Service in the Uniformed
                    Services means the performance  of  duty on a
                    voluntary   or   involuntary   basis   in   a
                    "Uniformed  Service"  and  includes:   active
                    duty,   active  duty  for  training,  initial
                    active  duty   for  training,  inactive  duty
                    training, full-time  National Guard duty, and
                    a period for which a person  is absent from a
                    position of employment for the  purpose of an
                    examination to determine the fitness  of  the
                    person   to   perform  any  such  duty.   The
                    "Uniformed  Services"   include   the   Armed
                    Forces, the Army National Guard, and the  Air
                    National  Guard  when  engaged in active duty
                    for  training,  inactive  duty  training,  or
                    full-time    National    Guard   duty;    the
                    commissioned  corps  of  the   Public  Health
                    Service;  and any other category  of  persons
                    designated  by  the  President  of the United
                    States in time of war or emergency.

                                        XVII.

               Article  I,  Section  1.38,  Year  of Service,  is  amended,
          effective January 1, 1997, to read as follows:

                         1.38  Year  of  Service shall  mean  any
                    Employment Year beginning on or after January
                    1, 1997 in which an Employee  completes  1000
                    Hours  of  Service  with  the  Employer.   An
                    Employee's   Years  of  Service  include  all
                    periods counted  as  the  Employee's Years of
                    Service  earned  prior  to  1997  under  Plan
                    provisions then in effect.

                         All of the Employee's Years  of  Service
                    with the Employer shall be taken into account
                    including  service  prior  to  the  year  the
                    Employee  meets  the  definition  of Eligible
                    Employee,  for  purposes  of  satisfying  the
                    Plan's  eligibility  requirements   and   for
                    calculating  a  Participant's Vested Interest
                    in his Employer Contribution  Account  unless
                    such   periods  of  service  are  disregarded
                    pursuant to Section 2.5 of the Plan.

                                        XVIII.

               Article I, is  amended  to  add a new Section 1.38A, Year of
          Benefit Service, to read as follows, effective January 1, 1997:

                         Year of Benefit Service shall mean a 12-
                    month  period  commencing  on  the  date  the
                    Eligible  Employee   completes  one  Hour  of
                    Service, but counting  only  months  while an
                    Eligible  Employee,  (or  such later date  of
                    participation as specified  in Appendix A) or
<PAGE>
                    anniversary  thereof  during  which   he   is
                    employed   by   a   Participating   Employer,
                    provided that:

                    a.   An  Employee shall be credited with  one
                         Year  of  Benefit  Service  for  each 12
                         complete  months  of employment, whether
                         or not consecutive.

                    b.   An Employee who is  not absent from work
                         due  to a Parental Absence  shall  cease
                         accruing Years of Service on his Service
                         Termination   Date,   except   if   such
                         Employee  performs  an  Hour  of Service
                         within the 12 month period commencing on
                         his Service Termination Date, his period
                         of   absence   shall   be   treated   as
                         employment.

                    c.   Years  of  Benefit Service shall include
                         any one or more  of  the  following,  if
                         they  occur  while  the  Employee  is an
                         Eligible Employee:

                         i.   any  period of absence because
                              of Service  in  the  Uniformed
                              Services   for   a   Returning
                              Veteran;

                         ii.  any  period  of layoff not  in
                              excess   of   one    year   in
                              duration;

                         iii. any   period   while  the  Eligible
                              Employee is on an approved leave of
                              absence   with   or   without   pay
                              (including any leave of absence for
                              maternity or paternity reasons);

                         iv.  any   other   period   of   absence
                              approved    by    a   Participating
                              Employer    or    Non-Participating
                              Employer including  paid  holidays,
                              paid vacations and sick leaves;

                         v.   any  other  period  of absence
                              during   which   the  Eligible
                              Employee does not  incur a One
                              Year  Break  in  Service   for
                              Benefit  Accrual; provided the
                              Employee returns to work as an
                              Eligible   Employee   with   a
                              Participating Employer or Non-
                              Participating  Employer within
                              the one-year period  after his
                              Service Termination Date;

                         vi.  to   the   extent   not   otherwise
                              credited above, the first 12 months
<PAGE>
                              of   a   Parental  Absence  if  the
                              Employee  provides   the  Committee
                              with any evidence it may reasonably
                              require   to  determine  that   the
                              absence  is   on  account  of  such
                              Parental Absence.

                    Except  as  otherwise  specifically  provided
                    under this Section 1.38A,  a  month  shall be
                    determined be dividing the number of days  of
                    employment,  whether  or  not consecutive, by
                    30.

                    Notwithstanding anything in  the  Plan to the
                    contrary,   the   Years  of  Service  of  any
                    Participant determined as of January 1, 1988,
                    shall not be less than the number of years he
                    would have had on such  date  under the terms
                    of a Prior Plan as in effect on  December 31,
                    1987.

                                         XIX.

               The  first  sentence  of  Article  III, Section  3.3,  Early
          Retirement Date, is amended and restated to read as follows:

                     3.3 Early Retirement Date.  A Participant who has
               completed  at  least ten Years of Benefit  Service  may
               retire on the first day of any month following his 55th
               birthday, such date being known as his Early Retirement
               Date; provided, however, that such Participant provides
               the Committee with  written  notice  at  least  60 days
               prior to his Early Retirement Date.

                                         XX.

               The  references  in Paragraphs 4.1(a)(ii) and 4.1(b)(i)  and
          (ii) to "Years of Service" are amended to be references to "Years
          of Benefit Service", effective January 1, 1997.

                                         XXI.

               Article II, Section  2.1,  Eligible  Class,  is  amended and
          restated to read as follows:

                    2.1  Eligibility  Requirements.   An  Employee  is
               eligible  to  participate only after he (a) attains age
               21; (b) has completed  one  Year of Service; and (c) is
               an Eligible Employee.

                                        XXII.

               The first paragraph of Article II, Section 2.2, Commencement
          of Participation, is amended and restated to read as follows:

                    2.2  Commencement of Participation.   An  Employee
               shall become  a  Participant on the first Entry Date on
               which he is an Eligible  Employee  and  which coincides
               with  or  immediately  follows  the completion  of  the
<PAGE>
               requirements  set forth in Section  2.1.   However,  no
               Employee  shall  become  a  Participant  prior  to  the
               effective date  of  the  adoption  of  the  Plan by his
               Employer.

                                        XXIII.

               The  last paragraph of paragraph a. of Article  IV,  Section
          4.6,  Maximum   Retirement   Income,  is  amended  and  restated,
          effective January 1, 1997, to read as follows:

                         For  the  purpose   of  determining  the
                    Actuarial Equivalent amount described in (v),
                    above, or in (iii) above if  the  benefit  is
                    payable   prior   to   the   Social  Security
                    Retirement  Age, the interest rate  shall  be
                    the greater of  5%  or  the rate specified in
                    Section 1.2 of the Plan.   To  determine  the
                    Actuarial Equivalent amount in (iii) above if
                    the  benefit  is  payable  after  the  Social
                    Security  Retirement  Age,  the interest rate
                    shall  be  the  lesser  of  5%, or  the  rate
                    specified in Section 1.2 of the Plan, with no
                    mortality. In any event, the  mortality table
                    shall be as set forth in Revenue  Ruling 95-6
                    or any successor publication of the  Service.
                    If   the   standard   rate   for  determining
                    Actuarial Equivalent benefits  under  Section
                    1.2 is modified, the above "greater of"  rate
                    will   change   accordingly.    If  the  rate
                    specified  in  Code  Section 415(b)(2)(E)  is
                    modified  the  above "lesser  of"  rate  will
                    change accordingly.

                                        XXIV.

               The second paragraph  of Article VI, Section 6.7 is amended,
          to add the following sentence:

                    Effective January  1,  1997,  distribution of
                    benefits to a Participant shall  commence  no
                    later  than  the  Required Beginning Date, as
                    defined in Section 6.9.

                                         XXV.

               Article VI, is amended to  add  a new section 6.9, effective
          January 1, 1997, to read as follows:

                         6.9 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.

                         (b)  If the Participant elects  a  lump-
                              sum benefit or an annuity, the date
<PAGE>
                              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,
                    effective January 1, 1997, for  anyone  other
                    than  a  5% owner (as defined in Code Section
                    416(i)(1)(B)(i))  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.  For Plan Years  beginning prior to
                    January  1,  1997,  Required  Beginning  Date
                    shall  mean  April  1st of the calendar  year
                    following  the  calendar   year  in  which  a
                    Participant attains age 70 1/2.

                         If    minimum   required   distributions
                    commenced prior  to  December  31,  1996 to a
                    Participant   who   remains   employed  by  a
                    Participating Employer, such Participant  may
                    elect,  at  any  time  during  the  Plan Year
                    ending  December  31,  1997, to cease further
                    distributions   until   he   has   terminated
                    employment.













<PAGE>

               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 31st day of December, 1996.
                                      ----        --------

          WITNESSES:                         AVONDALE INDUSTRIES, INC

          /s/ JOY T. RINALDI                 BY: /s/ THOMAS M. KITCHEN
          ------------------                     ---------------------
                                                 Thomas M. Kitchen, Secretary
          /s/ JACKIE H. WALKER
          --------------------


          ATTEST

          /s/ BL HICKS
          ------------
          (Corporate Seal)






































<PAGE>

                                    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 Three to
          the Avondale Industries, Inc. Pension 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 31st DAY
                         ----
          OF DECEMBER, 1996.
             --------

          /s/ A. BLOMKALNS
          ----------------
          NOTARY PUBLIC

                                         -2-