AMENDMENT NUMBER FOUR
                                          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 as required or
          allowed  by  the  Family  and  Medical  Leave Act  of  1993,  the
          Uniformed  Services  Employment and Reemployment  Rights  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; and to make further clarifications:

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

                                          I.

               The  family aggregation rules under Code Sections 401(a)(17)
          and 414(q)(6)  are  hereby  deleted  for all Plan Years beginning
          after  1996.   This  applies to the last  two  sentences  of  the
          second paragraph of Section  1.9,  Compensation,  and  the  sixth
          paragraph  of  Section  1.19, Highly Compensated Employee.  These
          provisions continue to apply  for  Plan  Years beginning prior to
          January 1, 1997.

                                         II.

               Article I, Section 1.9, 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
<PAGE>
                    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.

                                         III.

               Article I is amended to add the following  Section  1.12A to
          read in its entirety as follows:

                         1.12A  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-discriminatory manner.

                                         IV.

               Section 1.13, Employee, is amended  and  restated to read as
          follows:

                         1.13 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>
                                          V.

               Article I is amended  to  add  Section 1.15A, effective with
          respect  to  each  Employee  as  of  the  first  Employment  Year
          beginning on or after January 1, 1997, 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.

                                         VI.

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

                         1.16  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.

                                         VII.

               Article  I,  Section 1.19, Highly Compensated  Employee,  is
          amended  , effective  January  1,  1997,  to  add  the  following
          paragraph at the end, to read as follows:

                         Highly    Compensated    Employee,    as
                    determined  for  any Plan Year after the Plan
                    Year  ending December  31,  1996,  means  any
                    Employee  who  (a) was a 5% owner (as defined
                    at Section 416(i)(1)(B)(i)  of  the  Code) at
                    any  time  during  the  current  year  or the
                    previous year or (b) received Compensation in
                    excess  of  $80,000  (as  adjusted after 1997
                    under   Code   Section  414(q)(1))   in   the
                    preceding  Plan  Year  and  was  one  of  the
                    highest-paid 20% of Employees.

                                        VIII.

               Article I, Section 1.20,  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
<PAGE>
                              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 Services in
                              the Uniformed Service the Returning
                              Veteran  shall   be  credited  with
                              sufficient  Hours  of  Services  so
                              that a Break in Services  does  not
                              occur.   For  purposes of computing
                              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.

                                         IX.

               Article I, Section 1.20(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).

                                          X.

               Article I is  amended  to  add  Section  1.21A,  to  read as
          follows:

                         1.21A  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
<PAGE>
                    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
                    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.

                                         XI.

               Article  I,  Section  1.27,  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 read as
          follows:
<PAGE>
                         One Year Break in Service shall  mean an
                    Employment  Year in which  a Participant  has
                    500 or less Hours of Service.

                                         XII.

               Article  I,  Section   1.29,  Participant,  is  amended  and
          restated to read as follows:

                         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.

                                        XIII.

               Article  I  is  amended to add the following Section  1.32A,
          effective October 13, 1994, to read in its entirety as follows:

                         Section  1.32A 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.

                                         XIV.

               Article  I  is amended to add the following  Section  1.32B,
<PAGE>
          effective October 13, 1994, to read in its entirety as follows:

                         Section  1.32B  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.

                                         XV.

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

                                         XVI.

               Article I, Section 1.40, Year of Service, is amended to read
          as follows:

                         1.40  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 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 2.3 of the Plan.

                                        XVII.

               The  second  paragraph   of   Article   II,   Section   2.1,
          Commencement of Participation, is amended and restated, effective
          January 1, 1997, to read as follows:
<PAGE>
                         Each  person who is an Eligible Employee
                    shall become  a Participant on the Entry Date
                    which coincides  with  or immediately follows
                    the date (a) on which such  Eligible Employee
                    attains age 21 and (b) on which such Eligible
                    Employee  completes  one  Year  of   Service,
                    provided  he  is employed by the Employer  on
                    such date.  Notwithstanding the foregoing, no
                    Employee shall  become a Participant prior to
                    the effective date  of  the  adoption  of the
                    Plan by his Employer.

                                        XVIII.

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

                    If an Eligible Employee terminates employment
                    but is reemployed  before a One Year Break in
                    Service occurs, he shall be treated as if his
                    employment was not broken.

                    If an Eligible Employee  (whether  or  not  a
                    Participant)  terminates  employment  and  is
                    later reemployed by a Participating Employer,
                    he  shall  be  treated  as a new Employee for
                    purposes   of   determining  eligibility   to
                    participate in the  Plan, if the Employee has
                    no vested interest and  his  consecutive One-
                    Year Breaks in Service exceed  the greater of
                    five or the Years of Service prior to a Break
                    in  Service.   However,  if  a  fully  vested
                    Participant has terminated employment  and is
                    later reemployed by a Participating Employer,
                    he  shall  automatically become a Participant
                    as of the date  he  first performs an Hour of
                    Service following reemployment  regardless of
                    the  number  of  One-Year  Breaks in  Service
                    prior to reemployment.

                                         XIX.

               Article V, Section 5.3, Allocation of Employer Contributions
          and Forfeitures, is amended, effective  October  13, 1994, to add
          the  following  at  the  end of the first paragraph, to  read  as
          follows:

                         The Returning Veteran who is entitled to
                    an allocation under  the  Uniformed  Services
                    Employment  and Reemployment Rights Act  (the
                    "Act") shall  receive  an  allocation  of the
                    employer  contribution  that  he or she would
                    have received if he or she had been employed.
                    The  Returning Veteran will not  be  eligible
                    for (i) an allocation of earnings before such
                    contributions  are  made, or (ii) forfeitures
                    allocated  during  the   period  of  military
                    service.   The  allocation will  be  made  no
                    later  than  the  time   allowed   under  the
<PAGE>
                    Internal Revenue Service's interpretation  of
                    the Act.

                                         XX.

               Article V, Section 5.12(a), Limitation on Annual  Additions,
          is  amended,  effective  October 13,  1994,  to add the following
          paragraph at the end:

                         However,    makeup   contributions   for
                    Returning Veterans  will  be  subject to this
                    limitation with respect to the  year in which
                    the contributions relate but not  in the year
                    in which the contributions were made.

                                         XXI.

               Article V, Section 5.12(d), Limitation on  Annual Additions,
          is amended, effective January 1, 1997, to add the  following  new
          paragraph at the end:

                         Beginning   in   Plan   Year  1997,  for
                    purposes of this Section 5.12,  Participant's
                    compensation, as defined in Section 415(c)(3)
                    of the Code and Regulation, is defined  above
                    but   includes   any   amount   an   Employee
                    contributes to a qualified plan under Section
                    401(k) or Section 125 of the Code.

                                        XXII.

               The  first paragraph of Article VII, Section  7.1,  Time  of
          Payment, is  amended  and restated, effective January 1, 1997, to
          read as follows:

                         7.1  Time  of  Payment.   Subject to the
                    temporary non-payment provisions  of  Section
                    7.6,  the  payment  of a Participant's Vested
                    Interest shall be made,  or commence, as soon
                    as administratively practicable following the
                    Participant's Normal Retirement Date or death
                    (but not later than 60 days  after the end of
                    the   Plan  Year  in  which  the  Participant
                    attains  his Normal Retirement Date or dies);
                    provided, however, that no distribution shall
                    commence later  than  the  Required Beginning
                    Date, as defined as Section 7.10.

                                        XXIII.

               Article VII, Section 7.2(b)  is amended to change the phrase
          "Company Stock Account" to "Company Stock Subaccount."

                                        XXIV.

               Article VII is amended to add Section 7.10, Minimum Required
          Distribution, effective January 1, 1997, to read as follows:

                         7.10  Minimum  Required   Distributions.
<PAGE>
                    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
                              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.
                                      ----        --------

          WITNESS:                      AVONDALE INDUSTRIES, INC


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

          ATTEST

          /s/ BL HICKS, ASST. SECRETARY
          -----------------------------
          (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  Four 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.

               WITNESS:

               /s/ JOY T. RINALDI            /s/ THOMAS M. KITCHEN
               ------------------            ---------------------  
                                             Thomas M. Kitchen
               /s/ JACKIE H. WALKER
               --------------------

               SWORN TO AND SUBSCRIBED
               BEFORE ME THIS 31st DAY
                              ---- 
               OF DECEMBER, 1996.


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