AMENDMENT NO. 1
                    TO THE AMENDED AND RESTATED
                    CHANGE OF CONTROL AGREEMENT


     WHEREAS,  the  Amended  and  Restated Change of Control Agreement (the
"Agreement") between Thomas M. Kitchen  and  Avondale Industries, Inc. (the
"Company") was entered  into effective as of January 19, 1996; and

     WHEREAS,  the  Board of Directors wishes to  amend  the  Agreement  to
provide for the accelerated  payment  of  benefits under the Company's non-
qualified  defined  benefit plans in the event  of  the  payment  of  other
benefits under the Agreement.

     NOW THEREFORE, the Agreement is hereby amended as follows:

                                I.

     Section 2.3(a)(iv) is hereby amended to read as follows:

               (iv)  notwithstanding   any  plan  provision  regarding  the
          payment of benefits following  a change of control of the Company
          which shall be superseded hereby,  the  Company  shall pay to the
          Employee  in  a  lump sum in cash within 30 days of the  date  of
          termination an amount  equal  to  the  then  present value of the
          actuarial equivalent of the additional benefits, if any, to which
          the  Employee  would  be entitled under the Avondale  Industries,
          Inc. Pension Plan, and  any  other qualified defined benefit plan
          maintained  by  the Company and  covering  the  Employee  if  the
          Employee had continued  to  be  employed by the Company until the
          third  anniversary of the Change of  Control,  assuming  Employee
          were fully  vested thereunder, without regard to any amendment to
          such  plans made  after  the  Change  of  Control  but  prior  to
          Employee's  date  of  termination  of employment, which amendment
          adversely  affects in any manner the  computation  of  retirement
          benefits under such plans.
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                                II.

     Section 2/3(a)(v) is hereby added to read as follows:

               (v) notwithstanding any plan provision regarding the payment
          of benefits  following  a  change of control of the Company which
          shall be superseded hereby, the Company shall pay to the Employee
          in a lump sum in cash within  30  days of the date of termination
          of employment an amount equal to the  then  present  value of the
          actuarial equivalent of the benefits to which the Employee  would
          be  entitled  under  the Supplemental Pension Plan, the Executive
          Excess  Retirement  Plan  and  any  other  non-qualified  defined
          benefit plan maintained  by the Company and covering the Employee
          if  the  Employee had an additional  period  of  service  to  the
          Company ending on the third anniversary of the Change of Control,
          assuming the  Employee  were fully vested thereunder and assuming
          retirement at age 55 if Employee is age 52 or younger at the time
          of the Change of Control or assuming retirement at the age of the
          Employee three years following  the Change of Control if Employee
          is  over  age  52 at the time of the  Change  of  Control.   Such
          payment shall be  made  without  regard  to any amendment to such
          plans made after the Change of Control but  prior  to  Employee's
          date  of  termination  of  employment,  which amendment adversely
          affects  in  any  manner the computation of  retirement  benefits
          under such plans.

     This amendment is effective this 23rd day of March, 1998.


                                   AVONDALE INDUSTRIES, INC.



                                   By:     /s/ Hugh A. Thompson
                                         ------------------------
                                              Hugh A. Thompson
                                     Chairman, Compensation Committee


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