Document:

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                                                                    EXHIBIT 10.2

                                                                  EXECUTION COPY

                              EMPLOYMENT AGREEMENT

     This Employment Agreement (the "Agreement") by and between Conrad
Industries, a Louisiana corporation (the "Company"), and Kenneth G. Myers, Jr.
("Executive") is hereby entered into effective as of August 13, 2001 (the
"Effective Date").

                                    RECITALS

     WHEREAS, the Company desires to employ Executive, and Executive desires to
be employed by the Company, all on the terms and conditions set forth in this
Agreement;

     NOW, THEREFORE, in consideration of the mutual promises, terms, covenants
and conditions set forth herein and the performance of each, it is hereby agreed
as follows:

                                   AGREEMENTS

1.  Employment and Duties.

    (a) Effective on August 27, 2001 (the "Start Date"), the Company shall
employ Executive as the Chief Executive Officer and President of the Company. As
such, Executive shall have responsibilities, duties and authority reasonably
accorded to, expected of and consistent with Executive's positions as the Chief
Executive Officer and President of the Company. Executive hereby accepts this
employment upon the terms and conditions herein contained and, subject to
paragraph 1(c), agrees to devote substantially all of his time, attention and
efforts during normal business hours to promote and further the business and
interests of the Company and its affiliates.

    (b)  Executive shall faithfully adhere to, execute and fulfill all lawful
policies established by the Company.

    (c) Executive shall not, during the term of his employment hereunder, engage
in any other business activity pursued for gain, profit or other pecuniary
advantage if such activity interferes in any material respect with Executive's
duties and responsibilities hereunder. The foregoing limitations shall not be
construed as prohibiting Executive from making personal investments in such form
or manner as will neither require his services in the operation or affairs of
the companies or enterprises in which such investments are made nor violate the
terms of paragraph 3 hereof.

2.  Compensation.  For all services rendered by Executive, the Company shall
compensate Executive as follows:

    (a) Base Salary. The base salary payable to Executive during the term of his
employment hereunder, commencing on the Start Date, shall be $230,000 per year,
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payable in accordance with the Company's payroll procedures for executives, but
not less frequently than monthly. Such base salary may be increased from time to
time, at the discretion of the Board of Directors of the Company (the "Board"),
in light of the Executive's position, responsibilities and performance, and, as
increased from time to time, may not be reduced.

    (b) Company Stock. Effective on the Start Date, the Company shall grant to
Executive 5,000 shares of common stock of the Company ("Company Stock"), subject
to the following terms:

        (i) Executive shall not be immediately vested in any of the shares of
     the Company Stock;

        (ii) Executive shall vest in 100% of the shares of Company Stock (the
     "Nonvested Shares") on the anniversary of the Start Date as long as
     Executive continues to be an employee of the Company, subject to the
     further provisions of this Agreement;

        (iii) Executive shall become automatically 100% vested in the Nonvested
     Shares immediately prior to a "Change in Control" of the Company, as such
     term is defined in the Conrad Industries, Inc. 1998 Stock Plan (a "Change
     in Control");

        (iv) prior to becoming vested, the Nonvested Shares may not be
     transferred (except by will or the laws of descent and distribution),
     pledged or encumbered in any manner by Executive;

        (v) all distributions made by the Company with respect to the Nonvested
     Shares (cash, stock or other property), and any shares issued upon a stock
     split or stock dividend or by the Company in exchange for the Nonvested
     Shares shall be subject to the same restrictions applicable to the
     Nonvested Shares as set forth in this Agreement; and

        (vi) the Company may place such legends on the certificate for the
     Nonvested Shares evidencing the restrictions provided herein as it deems
     appropriate.

    (c) Options. On the Start Date, the Company will grant Executive options
pursuant to the Conrad Industries, Inc. 1998 Stock Plan (the "Plan") to purchase
50,000 shares of Company Stock, which options shall vest in three equal annual
installments on the first, second and third anniversary of the Start Date, with
an exercise price equal to the fair market value of the Company Stock on the
grant date, and having other terms and conditions substantially similar to
options granted to other executive officers of the Company. The options shall be
incentive stock options for the maximum number that shall qualify as incentive
stock options, and the balance shall be nonqualified stock options. In the event
of a Change in Control, all such options automatically shall become

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fully vested immediately prior to such Change in Control (or such earlier time
as set by the Board or committee administering the Plan).

    (d) Bonus. Executive shall be eligible to participate in any executive bonus
programs maintained by the Company.

    (e) Executive Perquisites, Benefits and Other Compensation. Executive shall
be entitled to receive additional benefits and compensation from the Company in
such form and to such extent as specified below:

        (i) Executive shall be entitled to an automobile allowance of $650 per
     month. The Company will reimburse Executive for all fuel and maintenance
     and will provide Executive with automobile insurance;

        (ii) Executive shall be promptly reimbursed for all business travel and
     other out-of-pocket expenses reasonably incurred by Executive in the
     performance of his duties pursuant to this Agreement and in accordance with
     the Company's policy for executives of the Company. All such expenses shall
     be appropriately documented in reasonable detail by Executive upon
     submission of any request for reimbursement, and in a format and manner
     consistent with the Company's expense reporting policy;

        (iii) Executive shall, subject to the satisfaction of any general
     eligibility criteria, be eligible to participate in all compensation and
     benefit plans and programs as are maintained from time to time for
     executives of the Company. Employee benefit plans maintained by the Company
     as of the Effective Date are listed on Appendix B attached hereto. The
     Company undertakes no obligation to continue any such plans in effect. If
     Executive is ineligible to participate in the Company's health insurance
     program, the Company shall provide Executive with health insurance similar
     to the Company's program as may be from time to time in effect;

        (iv) Executive shall be entitled to a minimum of three weeks of annual
     vacation; and

        (v) the Company shall provide Executive with such other perquisites as
     may be deemed appropriate for Executive by the Board.

3.  Non-Competition Agreement.

    (a) Executive recognizes that the Company's willingness to enter into this
Agreement is based in material part on Executive's agreement to the provisions
of this paragraph 3 and that Executive's breach of the provisions of this
paragraph 3 could materially damage the Company. Subject to the further
provisions of this Agreement, Executive will not, during the term of his
employment with the Company, and for a

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period of one year immediately following the termination of such employment for
any reason whatsoever, except as may be set forth herein, directly or
indirectly:

        (i)  carry on or engage in any business in direct competition with the
     construction, conversion or repair of marine vessels or the fabrication of
     modular components for offshore drilling rigs or floating production,
     storage and offloading vessels (collectively, the "Businesses") of the
     Company or any subsidiary of the Company (collectively, the "Companies") in
     any State of the United States or other jurisdiction, or specified portions
     thereof, in which the Executive regularly (a) makes contact with customers
     of the Company or any of its subsidiaries, (b) conducts the business of the
     Company or any of its subsidiaries or (c) supervises the activities of
     other employees of the Company or its subsidiaries, as identified in
     Appendix "A" attached hereto and forming a part of this Agreement, so long
     as the Company or any of its subsidiaries carries on any of the Businesses
     therein (collectively the "Territory");

        (ii) call upon any person who is, at that time, an employee of any of
     the Companies for the purpose or with the intent of enticing such employee
     away from or out of the employ of any of the Companies;

        (iii) call upon any customer of any of the Companies within the
     Territory for the purpose of soliciting or selling products or services in
     direct competition with any of the Companies within the Territory;

        (iv) call upon any prospective acquisition candidate, on Executive's own
     behalf or on behalf of any competitor, which candidate was, to Executive's
     knowledge after due inquiry, either called upon by any of the Companies or
     for which any of the Companies made an acquisition analysis, for the
     purpose of acquiring such entity; or

        (v)  disclose customers, whether in existence or proposed, of any of the
     Companies to any person, firm, partnership, corporation or business for any
     reason or purpose whatsoever except to the extent that any of the Companies
     has in the past disclosed such information to the public for valid business
     reasons.

    Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit Executive from acquiring as in investment (i) not more than 1% of the
capital stock of a competing business, whose stock is traded on a national
securities exchange, the Nasdaq Stock Market or similar market or (ii) not more
than 5% of the capital stock of a competing business whose stock is not publicly
traded unless the Board consents to such acquisition.

    Executive agrees that he will from time to time upon the Company's request
promptly execute any supplement, amendment, restatement or modification of
Appendix "A" as may be necessary or appropriate to correctly reflect the
jurisdictions which, at the time of such modification, should be covered by
Appendix "A" and this Paragraph 3.

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Furthermore, Executive agrees that all references to Appendix "A" in this
Agreement shall be deemed to refer to Appendix "A" as so supplemented, amended,
restated or otherwise modified from time to time.

    (b) Because of the difficulty of measuring economic losses to the Company as
a result of a breach of the foregoing covenant, and because of the immediate and
irreparable damage that could be caused to the Company for which it would have
no other adequate remedy, Executive agrees that the foregoing covenant may be
enforced by the Company, in the event of breach by him, by injunctions and
restraining orders. Executive further agrees to waive any requirement for the
Company's securing or posting of any bond in connection with such remedies.

    (c) It is agreed by the parties that the foregoing covenants in this
Paragraph 3 impose a reasonable restraint on Executive in light of the
activities and business of the Companies on the date of the execution of this
Agreement and the current plans of the Companies.

    (d) It is further agreed by the parties hereto that, in the event that
Executive shall cease to be employed by the Company and shall enter into a
business or pursue other activities not in competition with the Businesses of
the Companies or similar activities or businesses in locations the operation of
which, under such circumstances, does not violate clause (a)(i) of this
paragraph 3, and in any event such new business, activities or location are not
in violation of this paragraph 3 or of Executive's obligations under this
paragraph 3, if any, Executive shall not be chargeable with a violation of this
paragraph 3 if the Companies shall thereafter enter the same, similar or a
competitive (i) business, (ii) course of activities or (iii) location, as
applicable.

    (e) The covenants in this paragraph 3 are severable and separate, and the
enforceability of any specific covenant shall not affect the provisions of any
other covenant. Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth are
unenforceable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent permitted by law, and the Agreement shall thereby
be reformed.

    (f) All of the covenants in this Paragraph 3 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Executive against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants.

    (g) The Company and Executive hereby agree that this covenant is a material
and substantial part of this Agreement.

    (h) Executive acknowledges that the payments provided under paragraph 4(d),
(relating to termination without Cause or termination for Good Reason) are
conditioned upon Executive fulfilling the noncompetition and nondisclosure
provisions of this

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Agreement. In addition, such payments are conditioned upon Executive refraining,
for a one-year period after termination of employment, from carrying on or
engaging in, as an employee, officer, director, shareholder, owner, partner,
joint venturer, or in a managerial capacity, whether as an executive,
independent contractor, consultant or advisor, or as a sales representative or
otherwise, any business in direct competition with the Businesses of the
Companies in the Territory, to the extent such activity is not prohibited by
paragraph 3(a). In the event Executive shall at any time materially breach any
noncompetition or nondisclosure agreements contained in this Agreement,
including the agreements in this paragraph 3(h), the Company may cancel payments
otherwise due under paragraph 4(d) during the period of such breach. Executive
acknowledges that any such elimination of payments would be an exercise of the
Company's right to terminate its performance hereunder upon Executive's breach
of this Agreement and such elimination of payments would not constitute and
shall not be characterized as the imposition of liquidated damages.

    (i) Any dispute regarding the reasonableness of the covenants and agreements
set forth in this paragraph 3 or the territorial scope or duration thereof or
the remedies available to the Company upon any breach of such covenants and
agreements, shall be governed by and interpreted in accordance with the laws of
the State of United States or other jurisdiction in which the alleged prohibited
competing activity or disclosure occurs, and with respect to each such dispute,
the Company and Executive each hereby irrevocably consent to the exclusive
jurisdiction of the state and federal courts sitting in the relevant State (or,
in the case of any jurisdiction outside the United States, the relevant courts
of such jurisdiction) for resolution of such dispute, and agree to be
irrevocably bound by any judgment rendered thereby in connection with such
dispute, and further agree that service of process may be made upon him or it in
any legal proceeding related to this paragraph 3 and/or Appendix "A" by any
means allowed under the laws of such jurisdiction. Each party irrevocably waives
any objection he or it may have as to the venue of such suit, action or
proceeding brought in such a court or that such a court is an inconvenient
forum. The parties agree that it is their intent and desire that the provisions
of this Agreement be enforced to the fullest extent permitted under applicable
law, whether now or hereafter in effect, and therefore, to the extent permitted
by applicable law, the parties hereto waive any provision of applicable law that
would render any provision of this paragraph 3 invalid or unenforceable.

    (j) Notwithstanding anything in this paragraph 3 to the contrary, nothing in
this paragraph 3 shall prohibit or restrict Executive from being employed by one
of the five largest shipyards in the United States, as long as Executive is not
involved in any manner in any products or services similar to products or
services provided or offered by the Companies to their customers, or for which
any of the Companies has submitted a bid, within five years prior to the date of
termination of employment.

    4. Term; Termination; Rights on Termination. Executive's term of employment
under this Agreement shall begin on the Start Date and continue until December
31, 2004 (the "Initial Term") and, unless terminated sooner as herein provided,
shall continue thereafter at Executive's and Company's mutual election on a
year-to-year basis on the same terms and

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conditions contained herein in effect as of the time of renewal (the "Extended
Term"); provided, however, upon a Change in Control of the Company, the term of
this Agreement shall automatically continue following such Change in Control for
a period equal to the then remaining term or two years, whichever period is
longer, unless earlier terminated as provided in paragraph 11. This Agreement
and Executive's employment may be terminated in any one of the following ways:

        (a) Death. The death of Executive shall immediately terminate this
     Agreement with no severance compensation due Executive's estate; provided,
     however, all Nonvested Shares, if any, shall immediately vest in full.

        (b) Disability. If Executive becomes entitled to receive benefits under
     an insured long-term disability plan of the Company that includes its
     officers, the Company may terminate Executive's employment hereunder with
     no severance compensation due Executive; provided, however, all Nonvested
     Shares, if any, shall immediately vest in full.

        (c) Cause. The Company may terminate this Agreement and Executive's
     employment 10 days after written notice to Executive for "Cause," which
     shall be: (1) Executive's willful, material and irreparable breach of this
     Agreement (which remains uncured 10 days after receipt of written notice);
     (2) Executive's gross negligence in the performance or intentional
     nonperformance (in either case continuing for 10 days after receipt of
     written notice of need to cure) of any of Executive's material duties and
     responsibilities hereunder; (3) Executive's dishonesty or fraud with
     respect to the business, reputation or affairs of the Company which
     materially and adversely affects the Company (monetarily or otherwise); or
     (4) Executive's conviction of a felony crime involving moral turpitude. In
     the event of a termination for Cause, Executive shall have no right to any
     severance compensation.

        (d) Without Cause. Executive may only be terminated without Cause by the
     Company during either the Initial Term or Extended Term if such termination
     is approved by at least 51% of the members of the Board. Should Executive
     be terminated by the Company without Cause or should Executive terminate
     with Good Reason, then:

            (i) Subject to paragraph 3(h), Executive shall receive from the
     Company the equivalent of one year of base salary at the rate then in
     effect if the remaining term of the contract is one year or less, and two
     years of base salary at the rate then in effect if the remaining term of
     the contract is greater than one year, payable ratably over a one-year
     period;

            (ii) All Nonvested Shares and any stock options immediately shall be
     vested in full, and

            (iii) Executive shall be vested in all unvested amounts to the
fullest extent permitted under the Company's 401(k) plan.

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          Executive shall have "Good Reason" to terminate his employment
     hereunder upon the occurrence of any of the following events, unless such
     event is agreed to in writing by Executive:  (a) Executive is demoted by
     means of a material reduction in authority, responsibilities or duties to a
     position of less stature or importance within the Company than the position
     described in paragraph 1(a) hereof; (b) Executive's annual base salary as
     then in effect is reduced; (c) the relocation of the Company's principal
     executive offices to a location outside the Morgan City, Louisiana area, or
     the Company's requiring Executive to relocate anywhere other than the
     Company's principal executive offices; or (d) the Company's requiring
     Executive to change his principal residence from the address set forth in
     paragraph 16.

     If termination of Executive's employment arises out of the Company's
failure to pay Executive on a timely basis the amounts to which he is entitled
under this Agreement or as a result of any other breach of this Agreement by the
Company, as determined by a court of competent jurisdiction or pursuant to the
provisions of paragraph 18 below, the Company shall pay all amounts and damages
to which Executive may be entitled as a result of such breach, including
interest thereon and all reasonable legal fees and expenses and other costs
incurred by Executive to enforce his rights hereunder.  Further, none of the
provisions of paragraph 3 shall apply in the event this Agreement is terminated
as a result of a breach by the Company.

     Upon termination of this Agreement for any reason provided above, in
addition to the above payments, if any, Executive shall be entitled to receive
all compensation earned and all benefits and reimbursements due through the
effective date of termination, paid to Executive in a lump sum on the effective
date.  All other rights and obligations of the Company and Executive under this
Agreement shall cease as of the effective date of termination, except that the
Executive's obligations under paragraphs 3, 5, 6, 7 and 8 herein shall survive
such termination in accordance with their terms.

    5. Return of Company Property. All records, designs, patents, business
plans, financial statements, manuals, memoranda, lists, and other property
delivered to or compiled by Executive by or on behalf of the Company or any of
the Companies or their representatives, vendors or customers which pertain to
the business of the Company or any of the Companies, shall be and remain the
property of the Company or the Companies, as the case may be, and be subject at
all times to their discretion and control. Likewise, all correspondence,
reports, records, charts, advertising materials, and other similar data
pertaining to the business, activities or future plans of the Company of the
Companies which is collected by Executive, shall be delivered promptly to the
Company without request by it upon termination of Executive's employment.

    6. Inventions. Executive shall disclose promptly to the Company any and all
significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by
Executive, solely or jointly with another, during the period of employment or
within one year thereafter, if conceived during employment, and which are
directly related to the business or activities of the Company and which
Executive conceives as a result of his employment by the Company. Executive
hereby assigns and agrees to assign all his interests therein to the Company or
its nominee. Whenever requested to do so by the Company, Executive shall execute
any and all applications,

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assignments or other instruments that the Company shall deem necessary to apply
for and obtain Letters Patent of the United States or any foreign country or to
otherwise protect the Company's interest therein.

    7. Trade Secrets. Executive agrees that he will not, during or after the
term of this Agreement, disclose the specific terms of the Company's
relationships or agreements with their respective significant vendors or
customers or any other significant and material trade secret of the Company,
whether in existence or proposed, to any person, firm, partnership, corporation
or business for any reason or purpose whatsoever.

    8.  Confidentiality.

        (a) Executive acknowledges and agrees that all Confidential Information
     (as defined below) of the Company is confidential and a valuable, special
     and unique asset of the Company that gives the Company an advantage over
     its actual and potential, current and future competitors. Executive further
     acknowledges and agrees that Executive owes the Company a fiduciary duty to
     preserve and protect all Confidential Information from unauthorized
     disclosure or unauthorized use, that certain Confidential Information
     constitutes "trade secrets" under applicable laws, and that unauthorized
     disclosure or unauthorized use of the Company's Confidential Information
     would irreparably injure the Company.

        (b) Both during the term of Executive's employment and after the
     termination of Executive's employment for any reason (including wrongful
     termination), Executive shall hold all Confidential Information in strict
     confidence, and shall not use any Confidential Information except for the
     benefit of the Company, in accordance with the duties assigned to
     Executive. Executive shall not, at any time (either during or after the
     term of Executive's employment), disclose any Confidential Information to
     any person or entity (except other employees of the Company who have a need
     to know the information in connection with the performance of their
     employment duties), or copy, reproduce, modify, decompile or reverse
     engineer any Confidential Information, or remove any Confidential
     Information from the Company's premises, without the prior written consent
     of the Chairman of the Company, or permit any other person to do so.
     Executive shall take reasonable precautions to protect the physical
     security of all documents and other material containing Confidential
     Information (regardless of the medium on which the Confidential Information
     is stored). This Agreement applies to all Confidential Information, whether
     now known or later to become known to Executive.

        (c) Upon the termination of Executive's employment with the Company for
     any reason, and upon request of the Company at any other time, Executive
     shall promptly surrender and deliver to the Company all documents and other
     written material of any nature containing or pertaining to any Confidential
     Information and shall not retain any such document or other material.
     Within five days of any such request, Executive shall certify to the
     Company in writing that all such materials have been returned.

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        (d) As used in this Agreement, the term "Confidential Information" shall
     mean any information or material known to or used by or for the Company
     (whether or not owned or developed by the Companies and whether or not
     developed by Executive) that is not generally known to persons in the
     Business. Confidential Information includes, but is not limited to, the
     following: all trade secrets of the Companies; all information that the
     Companies have marked as confidential or have otherwise described to
     Executive (either in writing or orally) as confidential; all nonpublic
     information concerning the Companies' products, services, prospective
     products or services, research, product designs, prices, discounts, costs,
     marketing plans, marketing techniques, market studies, test data,
     customers, customer lists and records, suppliers and contracts; all
     business records and plans; all personnel files; all financial information
     of or concerning the Companies; all information relating to operating
     system software, application software, software and system methodology,
     hardware platforms, technical information, inventions, computer programs
     and listings, source codes, object codes, copyrights and other intellectual
     property; all technical specifications; any proprietary information
     belonging to the Companies; all computer hardware or software manuals; all
     training or instruction manuals; and all data and all computer system
     passwords and user codes.

    9.  No Prior Agreements.  Executive hereby represents and warrants to the
Company that the execution of this Agreement by Executive, his employment by the
Company and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client or any other person or
entity.  Further, Executive agrees to indemnify the Company for any claim,
including, but not limited to, reasonable attorneys' fees and expenses of
investigation, for any such third party that such third party may now have or
may hereafter come to have against the Company based upon or arising out of any
non-competition agreement, invention or secrecy agreement between Executive and
such third party which was in existence as of the date of this Agreement.

    10.  Assignment; Binding Effect.  Executive understands that he has been
selected for employment by the Company on the basis of his personal
qualifications, experience and skills.  Executive agrees, therefore, that he
cannot assign all or any portion of his performance under this Agreement.  The
Company will require any successor, by agreement in form and substance
reasonably acceptable to Executive, to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place.  Subject to the
preceding, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, legal
representatives, successors and assigns.

    11. Change in Control.

        (a) In the event a Change in Control is initiated or occurs during the
     Initial Term or Extended Term, then the provisions of this paragraph 11
     shall be applicable.

        (b) If, on or within two years following the effective date of a Change
     in Control, the Company terminates Executive's employment other than for
     Cause or Executive terminates his employment for Good Reason, or if
     Executive's employment

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     with the Company is terminated by the Company within six months before the
     effective date of a Change in Control and it is reasonably demonstrated by
     Executive that such termination (i) was at the request of a third party who
     has taken steps reasonably calculated to effect a Change in Control, or
     (ii) otherwise arose in connection with or in anticipation of a Change in
     Control, then Executive shall receive from Company:

             (i) in a lump sum payment due on the later of the effective date of
        Executive's termination or the Change in Control, as the case may be,
        the equivalent of three times the sum of (A) Executive's base salary at
        the rate in effect on Executive's termination date, plus (B) the last
        bonus received by Executive during the twelve months preceding the
        Change in Control; and

             (ii) all options granted pursuant to paragraph 2(c) automatically
        shall become fully vested immediately prior to the Change in Control (or
        such earlier time as set by the Board or committee administering the
        Plan).

        (c) Notwithstanding anything in this Agreement to the contrary, a
     termination pursuant to paragraph 11(b) shall operate to automatically
     waive in full the noncompetition restrictions imposed on Executive pursuant
     to paragraph 3(a).

        (d) If it shall be determined that any payment made or benefit (a
     "Payment") provided to Executive, whether or not made or provided pursuant
     to this Agreement and whether or not upon a Change in Control as defined
     herein, is subject to the excise tax imposed by Section 4999 of the
     Internal Revenue Code of 1986, as amended, or any successor thereto, the
     Company shall pay Executive an amount of cash (the "Additional Amount")
     such that the net after-tax benefit received by Executive after paying all
     applicable taxes on such Payment and the Additional Amount shall be equal
     to the net after-tax amount that Executive would have received with respect
     to the Payment if Section 4999 had not been applicable.

    12. No Mitigation or Offset. Executive shall not be required to mitigate the
amount of any Company payment provided for in this Agreement by seeking other
employment or otherwise. The amount of any payment required to be paid to
Executive by the Company pursuant to this Agreement shall not be reduced by any
amounts that are owed to the Company by Executive, or by any setoff,
counterclaim, recoupment, defense or other claim, right or action.

    13. Release. Notwithstanding anything in this Agreement to the contrary,
Executive shall not be entitled to receive any payments pursuant to this
Agreement unless Executive has executed a general release of all claims
Executive may have against the Company and its affiliates in a form of such
release reasonably acceptable to the Company and such release has become final.

    14. Indemnification. In the event Executive is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the Company
against Executive), by reason of the fact that he is or was performing services
under this Agreement, then the Company shall indemnify

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Executive against all expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement, as actually and reasonably incurred by Executive in
connection therewith. In the event that both Executive and the Company are made
a party to the same third-party action, complaint, suit or proceeding, the
Company agrees to engage competent legal representation, and Executive agrees to
use the same representation, provided that if counsel selected by the Company
shall have a conflict of interest that prevents such counsel from representing
Executive, Executive may engage separate counsel and the Company shall pay all
reasonable attorneys' fees and reasonable expenses of such separate counsel.
Further, while Executive is expected at all times to use his best efforts to
faithfully discharge his duties under this Agreement, Executive cannot be held
liable to the Company for errors or omissions made in good faith where Executive
has not exhibited gross, willful and wanton negligence and misconduct nor
performed criminal and fraudulent acts which materially damage the business of
the Company.

    15. Complete Agreement. Executive has no oral representations,
understandings or agreements with the Company or any of its officers, directors
or representatives covering the same subject matter as this Agreement. This
written Agreement is the final, complete an exclusive statement and expression
of the agreement between the Company and Executive and of all the terms of this
Agreement, and it cannot be varied, contradicted or supplemented by evidence of
any prior or contemporaneous oral or written agreements. This written Agreement
may not be later modified except by a further writing signed by a duly
authorized officer of the Company and Executive, and no term of this Agreement
may be waived except by writing signed by the party waiving the benefit of such
term. Without limiting the generality of the foregoing, either party's failure
to insist on strict compliance with this Agreement shall not be deemed a waiver
thereof.

    16. Notice. Whenever any notice is required hereunder, it shall be given in
writing addressed as follows:

      To the Company:    Conrad Industries, Inc.
                         150 Front St.
                         P. O. Box 790
                         Morgan City, Louisiana  70381
                         Attn:  Chairman of the Board

      To Executive:      Kenneth G. Myers, Jr.
                         2111 St. Mary Street
                         Thibodaux, Louisiana  70301

Notice shall be deemed given and effective on the earlier of three days after
the deposit in the U.S. mail of a writing addressed as above and sent first
class mail, certified, return receipt requested, or when actually received.
Either party may change the address for notice by notifying the other party of
such change in accordance with this paragraph 16.

     17.  Severability; Headings.  If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far

                                       12
<PAGE>

as is reasonable and possible, effect shall be given to the intent manifested by
the portion held invalid or inoperative. The paragraph headings herein are for
reference purposes only and are not intended in any way to describe, interpret,
define or limit the extent or intent of the Agreement or of any part hereof.

     18.  Dispute Resolutions.  Except with respect to injunctive relief as
provided in paragraph 3(b), neither party shall institute a proceeding in any
court or administrative agency to resolve a dispute between the parties before
that party has sought to resolve the dispute through direct negotiation with the
other party.  If the dispute is not resolved within two weeks after a demand for
direct negotiation, the parties shall attempt to resolve the dispute through
mediation.  If the parties do not promptly agree on a mediator, the parties
shall request the Association of Attorney Mediators in Louisiana (or similar
association) to appoint a mediator.  If the mediator is unable to facilitate a
settlement of the dispute within a reasonable period of time, as determined by
the mediator, the mediator shall issue a written statement to the parties to
that effect and any unresolved dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators in Morgan City, Louisiana in
accordance with the rules of the American Arbitration Association then in
effect.  The arbitrators shall have the authority to order back-pay, severance
compensation, vesting of options (or cash compensation in lieu of vesting
options), reimbursement of costs, including those incurred to enforce this
Agreement, and interest thereon in the event the arbitrators determine that
Executive was terminated without disability or Cause, as defined in paragraphs
4(b) and 4(c), respectively, or that the Company has otherwise materially
breached this Agreement.  A decision by a majority of the arbitration panel
shall be final and binding.  Judgment may be entered on the arbitrators' award
in any court having jurisdiction.  The costs and expenses, including reasonable
attorneys' fees of the prevailing party in any dispute arising under this
Agreement, will be promptly paid by the other party.

     19.  Governing Law.  This Agreement shall in all respects be construed
according to the laws of the State of Louisiana without regard to its conflicts
of law provisions, except as expressly provided in paragraph 3(i) above with
respect to the resolution of disputes arising under, or the Company's
enforcement of, paragraph 3 of this Agreement.

     20.  Counterparts.  This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.

                                       13
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective for all purposes as of the Effective Date.

                                     CONRAD INDUSTRIES, INC.

                                     By: /s/ John P. Conrad, Jr.
                                         ---------------------------------------
                                         John P. Conrad, Jr.
                                         Co-Chairman of the Board

                                     EXECUTIVE

                                      /s/ Kenneth G. Myers, Jr.
                                     -------------------------------------------
                                     Kenneth G. Myers, Jr.

                                       14
<PAGE>

                                         [Appendix A - Territorial Restrictions]
                                    [Appendix B - List of Company Benefit Plans]

                                       15<PAGE>

                                                                    EXHIBIT 10.3

                                                                  EXECUTION COPY

                              TRANSITION AGREEMENT

     This Transition Agreement (the "Agreement") is made and entered into this
20th day of August, 2001 by and among Conrad Industries, Inc., a Delaware
corporation ("Conrad") and Conrad Shipyard, L.L.C., a Louisiana limited
liability company (together, the "Company"), on the one hand, and William H.
Hidalgo ("Executive") on the other hand.

                              W I T N E S S E T H:

     WHEREAS, Executive and the Company entered into an employment agreement
(the "Employment Agreement") dated as of March 31, 1998, and amended as of March
31, 2001;

     WHEREAS, the Company and Executive deem it to be in their mutual best
interests for Executive to resign from his position with the Company as Chief
Executive Officer and President and as a Director of the Company;

     WHEREAS, the Company desires that Executive continue in his position with
the Company as Chief Executive Officer and President until the Resignation Date
(as defined below) and that his resignation as a Director of the Company be
effective as of the date hereof;

     WHEREAS, the Company wishes to accept Executive's resignation as Chief
Executive Officer and President effective at 11:59 p.m. on August 26, 2001 (the
"Resignation Date"), and to engage Executive's services as an employee with the
title of Special Advisor to the Chief Executive Officer ("Special Advisor") from
August 27, 2001 until October 31, 2001 (the "Employment Termination Date") to
provide for an orderly transfer of his responsibilities;

     WHEREAS, the Company and Executive may decide that after the Employment
Termination Date it would be mutually advantageous for Executive to serve as a
consultant to the Company for up to a four-month period, to perform such duties
and provide such counsel and assistance to the Company as the Chief Executive
Officer may request from time to time and as may be agreed to by Executive;

     WHEREAS, Executive and the Company entered into a stock option agreement
dated November 3, 1998 for the grant of a nonqualified stock option to purchase
205,518 shares of the common stock of Conrad ("Common Stock"), and stock option
agreements dated November 3, 1998 and May 26, 1999 for the grant of incentive
stock options to purchase 44,442 shares and 35,997 shares, respectively of
Common Stock (collectively "Executive's Stock Options"), all pursuant to the
Conrad Industries, Inc. 1998 Stock Plan, as amended and restated (the "Stock
Plan");

     WHEREAS, the Executive has executed a promissory note payable to the
Company in the principal amount of $233,327, due September 4, 2001 and bearing
interest at an annual rate of nine percent (the "Promissory Note");
<PAGE>

     WHEREAS, Executive and the Company believe it is in their mutual best
interests to terminate the Employment Agreement and enter into this Agreement.

     NOW, THEREFORE, in consideration of the mutual promises and respective
covenants herein contained, and intending to be legally bound hereby, the
parties agree as follows:

     1. Termination of Executive's Employment and Directorship.

     (a) Executive's employment by the Company as Chief Executive Officer and
President of the Company shall continue until 11:59 p.m. on the Resignation
Date, at which time it shall terminate. During the period from August 27, 2001
until the Employment Termination Date, Executive shall remain employed by the
Company full time as Special Advisor. Executive's employment with the Company as
Special Advisor, and in any other capacity, shall terminate as of the close of
business on the Employment Termination Date. The services to be provided by
Executive in such capacities are described in paragraph 8.

     (b) Executive's resignation from the Board of Directors of the Company and
termination of the Employment Agreement are effective on the date hereof.

     (c) Executive and the Company's new Chief Executive Officer may mutually
agree in writing to terminate Executive's employment as Special Advisor prior to
October 31, 2001, and in the event of such agreement, the date of such
termination of employment shall be the "Employment Termination Date."

     2.  Consulting Agreement.  Prior to the Employment Termination Date, the
Company and Executive may mutually agree that Executive shall be engaged as a
consultant to the Company for up to a four-month period ending February 28,
2002.  The agreement may be made on a month-to-month basis or for some other
period not to extend later than February 28, 2002. As a consultant, Executive
shall not be an employee or agent of the Company but shall be an independent
contractor.

          3.  Compensation.  Executive shall continue to draw his current annual
salary of $195,290 from the date hereof until the Employment Termination Date,
in the amounts and at the times as currently provided.  In addition, the Company
shall make the following payments to Executive, which shall be net of any
applicable withholding required by law:

          (a) If the Company and Executive mutually agree to enter into the
consulting arrangement described above, the Company shall pay Executive a
mutually agreed upon consulting fee.

          (b) On February 28, 2002, Executive shall receive to a lump sum
severance payment equal to his current annual salary as of the date hereof, of
$195,290, subject to paragraph 9(h) hereof.  Executive (or his heirs, legatees,
estate or representative) shall receive such payment in the event of Executive's
death, disability or incapacity prior to February 28, 2002.  If such severance
payment is not made by the Company on February 28, 2002, it shall

                                       2
<PAGE>

accrue interest thereafter at the rate of seven percent per year until paid, and
Executive shall be reimbursed for any and all reasonable attorneys' fees
incurred by him in collecting any such overdue payment.

          (c) As further consideration for past services rendered, Executive's
entering into this Agreement, including but not limited to the noncompetition
and release provisions hereof, Executive's services to the Company before the
date hereof in assisting with an orderly transition, Executive's surrender of
Executive's Stock Options as described below, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged:

                (i) The Company grants and delivers to Executive, effective as
     of the date hereof, 132,820 shares of Common Stock pursuant to the Stock
     Plan.

                (ii) Executive shall receive from the Company a cash bonus of
     $622,500 on February 28, 2002. Such bonus shall be offset by the principal
     amount of the Withholding Note described in clause (c)(iii). If such bonus
     (net of the principal amount of the Withholding Note) is not paid by the
     Company on February 28, 2002, it shall accrue interest thereafter at the
     rate of seven percent per year until paid, and Executive shall be
     reimbursed for any and all reasonable attorneys' fees incurred by him in
     collecting any such overdue payment.

                (iii) Executive shall satisfy his withholding tax obligation
     relating to clause (c)(i) as follows: the Company shall remit the
     appropriate withholding payment in cash to the appropriate taxing
     authorities, and the Executive shall execute a non-interest bearing
     promissory note with a principal amount equal to such withholding payment,
     payable to the Company at the time the bonus payable to Executive pursuant
     to clause (c)(ii) is due to Executive (the "Withholding Note").

                (iv) In order to assist Executive in meeting his income tax
     obligations arising from clauses (i) and (ii) above, the Company agrees to
     purchase on the date hereof 14,071 shares of Common Stock from the
     Executive at a purchase price of $6.47 per share in cash.

                (v) On the date hereof the Promissory Note, including accrued
     interest, shall be deemed paid in full and shall be cancelled.

               (vi) The Company and Executive agree and acknowledge that
     Executive shall be responsible for the income tax consequences to him of
     this Agreement, and the Company shall not owe any amounts to Executive
     except as expressly set forth in this Agreement, whether relating to his
     income tax obligations or otherwise.

          4.  Other Benefits.  (a) Through the Employment Termination Date,
Executive shall continue to participate in the Company's employee benefit plans
and programs on the same basis as currently provided by the Company.

                                       3
<PAGE>

     (b) Executive shall be entitled to participate in the Company's medical
insurance plan until age 65, and his spouse shall be entitled to participate in
the Company's medical insurance plan until age 65, regardless of whether
Executive is eligible for Medicare or is deceased; provided, however, that
Executive and his spouse shall pay the Company the premiums related to such
insurance. Notwithstanding the foregoing, the Company shall not be obligated to
provide such medical benefits if (i) it discontinues providing medical insurance
to its employees, or (ii) it is unable to obtain insurance or reinsurance
relating thereto, either at all or at premiums that do not increase by more than
10 percent the Company's overall insurance or reinsurance premiums above the
premiums the Company would be required to pay if such medical benefits were not
provided to Executive and/or his spouse.

     (c) On October 31, 2001, the Company shall transfer to Executive full
ownership of and title to the 2000 model Chevrolet Suburban automobile, bearing
Vehicle Identification Number 3GNEC16T7YG111981, free and clear of any and all
liens or encumbrances.

     5.   Stock Options. Executive's Stock Options shall be cancelled as of the
date hereof.  Executive and the Company agree that such stock options constitute
all stock options granted by the Company to Executive prior to the date of this
Agreement.

     6.   Satisfaction of the Company's Obligations under the Employment
Agreement.  Executive agrees, acknowledges and affirmatively represents that
upon execution and delivery of this Agreement, the Company shall have fully
completed, satisfied and discharged any and all obligations it has, had or may
be claimed to have, under the Employment Agreement.

     7.   Satisfaction of Executive's Obligations under the Employment
Agreement.  The Company agrees, acknowledges and affirmatively represents that
upon execution and delivery of this Agreement, Executive shall have fully
completed, satisfied and discharged any and all obligations he has, had or may
be claimed to have, under the Employment Agreement.

     8.   Services to be Provided by Executive.  During the period from the date
hereof until the Resignation Date, Executive shall continue to perform the
duties of Chief Executive Officer and President of the Company as directed by
the Board of Directors.  During that period, Executive agrees to assist with an
orderly transfer of his responsibilities.  Executive's continued employment by
the Company as Special Advisor shall begin on the first day following the
Resignation Date and shall terminate on the Employment Termination Date.  During
his employment as Special Advisor, Executive shall devote his full time and
attention during normal business hours to such duties as the Chief Executive
Officer of the Company may assign to him from time to time; provided, that those
duties shall not be of a nature that would not be assigned to a member of the
Company's management and shall not be more burdensome in scope or nature,
including but not limited to required travel, if any, than those duties formerly
performed by Executive for the Company.  As Special Advisor, Executive shall be
an officer and employee of the Company, but shall not be authorized to bind the
Company to any agreement without the express authorization of the Chief
Executive Officer.

                                       4
<PAGE>

     9.  Noncompetition.

     (a) Executive recognizes that the Company's willingness to enter into this
Agreement is based in material part on Executive's agreement to the provisions
of this paragraph 9 and that Executive's breach of the provisions of this
paragraph 9 could materially damage the Company. Executive will not, during the
remaining term of his employment with the Company and for a period of one year
after the Employment Termination Date:

        (i) carry on or engage in any business in direct competition with the
     construction, conversion or repair of marine vessels or the fabrication of
     modular components for offshore drilling rigs or floating production,
     storage and offloading vessels (collectively, the "Businesses") of the
     Company or any direct or indirect subsidiary of Conrad (collectively, the
     "Companies") in any State of the United States or other jurisdiction, or
     specified portions thereof, in which the Executive regularly (a) makes
     contact with customers of the Company or any of its subsidiaries, (b)
     conducts the business of the Company or any of its subsidiaries or (c)
     supervises the activities of other employees of the Company or its
     subsidiaries, as identified in Appendix "A" attached hereto and forming a
     part of this Agreement, so long as the Company or any of its subsidiaries
     carries on any of the Businesses therein (collectively the "Territory");

        (ii) call upon any person who is, at that time, an employee of any of
     the Companies for the purpose or with the intent of enticing such employee
     away from or out of the employ of any of the Companies (provided, that this
     clause (ii) shall not apply with respect to Executive's son who is
     currently employed by the Company);

        (iii) call upon any customer of any of the Companies within the
     Territory for the purpose of soliciting or selling products or services in
     direct competition with any of the Companies within the Territory;

        (iv) call upon any prospective acquisition candidate, on Executive's own
     behalf or on behalf of any competitor, which candidate was, to Executive's
     knowledge after due inquiry, either called upon by any of the Companies or
     for which any of the Companies made an acquisition analysis, for the
     purpose of acquiring such entity; or

        (v) disclose customers, whether in existence or proposed, of any of the
     Companies to any person, firm, partnership, corporation or business for any
     reason or purpose whatsoever except to the extent that any of the Companies
     has in the past disclosed such information to the public for valid business
     reasons.

          Notwithstanding the above, the foregoing covenant shall not be deemed
to prohibit Executive from acquiring as an investment (i) not more than 1% of
the capital stock of a competing business, whose stock is traded on a national
securities exchange, the Nasdaq Stock Market or similar market or (ii) not more
than 5% of the capital stock of a competing business whose stock is not publicly
traded unless the Board consents to such acquisition.

                                       5
<PAGE>

     Furthermore, notwithstanding the above, the foregoing covenant shall not
prohibit Executive from carrying on or engaging in the construction of aluminum
marine vessels, as long as such activity is not conducted in association in any
manner with any company with which the Company has had acquisition discussions
within the past two years.

     (b) Because of the difficulty of measuring economic losses to the Company
as a result of a breach of the foregoing covenant, and because of the immediate
and irreparable damage that could be caused to the Company for which it would
have no other adequate remedy, Executive agrees that the foregoing covenant may
be enforced by the Company, in the event of breach by him, by injunctions and
restraining orders. Executive further agrees to waive any requirement for the
Company's securing or posting of any bond in connection with such remedies.

     (c) The parties hereto agree that the foregoing covenants in this paragraph
9 impose a reasonable restraint on Executive in light of the activities and
business of the Companies on the date of the execution of this Agreement and the
current plans of the Companies.

     (d) It is further agreed by the parties hereto that in the event that after
the Employment Termination Date Executive enters into a business or pursues
other activities not in competition with the Businesses of the Companies or
similar activities or businesses in locations the operation of which, under such
circumstances, does not violate clause (a)(i) of this paragraph 9, and in any
event such new business, activities or location are not in violation of this
paragraph 9 or of Executive's obligations under this paragraph 9, if any,
Executive shall not be chargeable with a violation of this paragraph 9 if the
Companies shall thereafter enter the same, similar or a competitive (i)
business, (ii) course of activities or (iii) location, as applicable.

     (e) The covenants in this paragraph 9 are severable and separate, and the
enforceability of any specific covenant shall not affect the provisions of any
other covenant. Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth are
unenforceable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent permitted by law, and the Agreement shall thereby
be reformed.

     (f) All of the covenants in this paragraph 9 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Executive against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants.

     (g) The Company and Executive hereby agree that this covenant is a material
and substantial part of this Agreement.

     (h) Executive acknowledges that the severance payment provided under
paragraph 3(b) is conditioned upon Executive's fulfilling the noncompetition and
nondisclosure provisions of this Agreement as set forth in this paragraph 9 and
paragraph 10 below. In addition, such payment is conditioned upon Executive's
refraining, for a one year period

                                       6
<PAGE>

following the Employment Termination Date, from carrying on or engaging in, as
an employee, officer, director, shareholder, owner, partner, joint venturer, or
in a managerial capacity, whether as an executive, independent contractor,
consultant or advisor, or as a sales representative or otherwise, any business
in direct competition with the Businesses of the Companies in the Territory
(except as provided in paragraph 9(a) with respect to construction of aluminum
marine vessels), to the extent such activity is not prohibited by paragraph
9(a). In the event Executive shall at any time materially breach any
noncompetition or nondisclosure agreements contained in this Agreement,
including the agreements in this paragraph 9(h), the Executive shall forfeit to
the Company, and promptly repay to the Company, a pro rata portion of the
severance payment corresponding to the period of such breach (i.e., $195,290
times the quotient of the number of days during which the breach occurs divided
by 365). Executive acknowledges that any such forfeiture of payments would be an
exercise of the Company's right to terminate its performance hereunder upon
Executive's breach of this Agreement and would not constitute and shall not be
characterized as the imposition of liquidated damages. It is specifically
understood by the parties that the provisions of paragraph 13 of this Agreement
apply to this paragraph 9.

        (i) Any dispute regarding the reasonableness of the covenants and
     agreements set forth in this paragraph 9 or the territorial scope or
     duration thereof or the remedies available to the Company upon any breach
     of such covenants and agreements, shall be governed by and interpreted in
     accordance with the laws of the State of United States or other
     jurisdiction in which the alleged prohibited competing activity or
     disclosure occurs, and with respect to each such dispute, the Company and
     Executive each hereby irrevocably consent to the exclusive jurisdiction of
     the state and federal courts sitting in the relevant State (or, in the case
     of any jurisdiction outside the United States, the relevant courts of such
     jurisdiction) for resolution of such dispute, and agree to be irrevocably
     bound by any judgment rendered thereby in connection with such dispute, and
     further agree that service of process may be made upon him or it in any
     legal proceeding related to this paragraph 9 and/or Appendix "A" by any
     means allowed under the laws of such jurisdiction. Each party irrevocably
     waives any objection he or it may have as to the venue of such suit, action
     or proceeding brought in such a court or that such a court is an
     inconvenient forum. The parties agree that it is their intent and desire
     that the provisions of this Agreement be enforced to the fullest extent
     permitted under applicable law, whether now or hereafter in effect, and
     therefore, to the extent permitted by applicable law, the parties hereto
     waive any provision of applicable law that would render any provision of
     this paragraph 9 invalid or unenforceable.

     10.  Company Property, Trade Secrets and Confidentiality.

          (a) All records, designs, patents, business plans, financial
statements, manuals, memoranda, lists, and other property delivered to or
compiled by Executive by or on behalf of the Company or any of the Companies or
their representatives, vendors or customers which pertain to the business of the
Company or any of the Companies, are, shall be and remain the property of the
Company or the Companies, as the case may be, and those, along with all
correspondence, reports, records, charts, advertising materials, and other
similar data pertaining to the Businesses, activities or future plans of the
Company or the Companies which have been collected by Executive, shall be
delivered promptly to the Company without request by it on the Employment
Termination Date.

                                       7
<PAGE>

          (b) Executive shall disclose promptly to the Company any and all
significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, (i) that are conceived or made by
Executive, solely or jointly with another, during the remaining term of his
employment or within one year after the Employment Termination Date, (ii) that
are directly related to the business or activities of the Companies and (iii)
that Executive conceives as a result of his employment by the Company.
Executive hereby assigns and agrees to assign all his interests therein to the
Company or its nominee.  Whenever requested to do so by the Company, Executive
shall execute any and all applications, assignments or other instruments that
the Company shall deem necessary to apply for and obtain Letters Patent of the
United States or any foreign country or to otherwise protect the Company's
interest therein.  Any action to enforce this paragraph 10(b) must be brought
within five years after the date of this Agreement.

          (c) Executive agrees that he will not, during the remaining term of
his employment or after the Employment Termination Date, disclose the specific
terms of the Company's relationships or agreements with its significant vendors
or customers or any other significant and material trade secret of the Company,
whether in existence or proposed, to any person, firm, partnership, corporation
or business for any reason or purpose whatsoever.

          (d)  (i)  Executive acknowledges and agrees that all Confidential
     Information (as defined below) of the Company is confidential and a
     valuable, special and unique asset of the Company that gives the Company an
     advantage over its actual and potential, current and future competitors.
     Executive agrees that he will preserve and protect all Confidential
     Information from unauthorized disclosure or unauthorized use and that
     certain Confidential Information constitutes "trade secrets" under
     applicable laws.

               (ii) During the remaining term of Executive's employment,
     Executive shall hold all Confidential Information in strict confidence, and
     shall not use any Confidential Information except for the benefit of the
     Company, in accordance with the duties assigned to Executive, including
     duties assigned to him as Special Advisor.  Executive shall not, at any
     time (either during the remaining term of his employment or after the
     Employment Termination Date), disclose any Confidential Information to any
     person or entity (except other employees of the Company who have a need to
     know the information in connection with the performance of their employment
     duties), or copy, reproduce, modify, decompile or reverse engineer any
     Confidential Information, or remove any Confidential Information from the
     Company's premises, without the prior written consent of the Chief
     Executive Officer of the Company, or permit any other person to do so.

               (iii)  At the Employment Termination Date, and upon request of
     the Company at any other time, Executive shall promptly surrender and
     deliver to the Company all documents and other written material of any
     nature containing or pertaining to any Confidential Information and shall
     not retain any such document or other material.

                                       8
<PAGE>

     Within five days of any such request, Executive shall certify to the
     Company in writing that all such materials have been returned.

               (iv) As used in this Agreement, the term "Confidential
     Information" shall mean any information or material known to or used by or
     for the Companies (whether or not owned or developed by the Companies and
     whether or not developed by Executive) that is not generally known to
     persons in the Business.  Confidential Information includes, but is not
     limited to, the following: all trade secrets of the Companies; all
     information that the Companies have marked as confidential or have
     otherwise described to Executive (either in writing or orally) as
     confidential; all nonpublic information concerning the Companies' products,
     services, prospective products or services, research, product designs,
     prices, discounts, costs, marketing plans, marketing techniques, market
     studies, test data, customers, customer lists and records, suppliers and
     contracts; all business records and plans; all personnel files; all
     financial information of or concerning the Companies; all information
     relating to operating system software, application software, software and
     system methodology, hardware platforms, technical information, inventions,
     computer programs and listings, source codes, object codes, copyrights and
     other intellectual property; all technical specifications; any proprietary
     information belonging to the Companies; all computer hardware or software
     manuals; all training or instruction manuals; and all data and all computer
     system passwords and user codes.

     11.  Release.  (a) Executive hereby and forever, irrevocably and
unconditionally, waives and releases any and all rights, claims and causes of
action against the Company and its subsidiaries of whatever kind or nature,
known or unknown, asserted or unasserted, that may have arisen prior to or that
may exist as of the date of this Agreement, if such rights, claims or causes of
action relate to facts of which Executive has actual knowledge as of the date of
this Agreement.  It is understood and agreed, that by this Agreement, Executive
waives any such claims he may have against the Company and its subsidiaries,
including but not limited to those based on any theory of liability, statutory
or non-statutory, in contract or in tort, including, but not limited to, claims
for wrongful or constructive discharge, breach of any express or implied
employment contract or agreement, breach of any covenant of good faith and fair
dealing, fraud, defamation, or any personal or emotional injury.  It is further
understood and agreed that the parties covered by the Executive's release
include the Company's subsidiaries and present and former shareholders,
officers, directors, employees, agents, insurers, assigns, predecessors, and
successors, and that any reference to the Company in this paragraph 11 is
understood to include all of the foregoing persons or entities.

     (b) The Company hereby and forever, irrevocably and unconditionally, waives
and releases any and all rights, claims and causes of action against Executive
of whatever kind or nature, known or unknown, asserted or unasserted, that may
have arisen prior to or that may exist as of the date of this Agreement, if such
rights, claims or causes of action relate to facts of which any of the Company's
executive officers or directors (other than Executive) has actual knowledge as
of the date of this Agreement.  It is understood and agreed, that by this
Agreement, the Company waives any such claims it may have against Executive,
including but not limited to those based on any theory of liability, statutory
or non-statutory, in contract or in tort.

                                       9
<PAGE>

     12.  Nondisparagement.  Executive agrees to refrain from making any
statements and from taking any actions that disparage or could reasonably be
expected to harm the reputation of the Companies or any of its directors,
officers or employees, and agrees that he will not voluntarily assist or
otherwise participate in any action or proceeding undertaken by any other person
that disparage or could reasonably be expected to materially harm the reputation
of the Companies or any of its directors, officers or employees.  The Company
and its directors and officers agree to refrain from making any statements and
from taking any actions that disparage or could reasonably be expected to harm
the reputation of Executive or his family, and agrees that it will not
voluntarily assist or otherwise participate in any action or proceeding
undertaken by any other person that disparage or could reasonably be expected to
materially harm the reputation of Executive or his family.

     13.  Breach.  No remedy specified herein shall be deemed to be an exclusive
remedy, and accordingly, in addition to the rights and remedies provided herein,
the parties shall have all other rights and remedies provided to them by
applicable law, rule or regulation; provided that the Company may not withhold
payments due under paragraphs 3(b) or 3(c)(ii) hereof on account of an alleged
breach by Executive of the provisions of this Agreement, unless Executive is
found by a court of competent jurisdiction to have committed such breach and
orders such remedy in connection therewith.

     14.  Indemnification and Insurance.

        (a) For so long as the Company shall maintain in effect a directors' and
officers' liability insurance policy covering claims arising from or relating to
facts, events, actions or omissions relating to a director's or officer's
current or former service as a director or officer of the Company, the Company
shall include Executive as an insured party under such policy.

        (b) In the event Executive is made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by the Company against Executive), by
reason of the fact that he is or was a director or officer of the Company,
including but not limited to actions or omissions in connection with entering
into this Agreement, then the Company shall engage competent legal
representation to defend Executive and shall indemnify Executive against all
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement, as actually and reasonably incurred by Executive in connection
therewith.  In the event that both Executive and the Company are made a party to
the same third-party action, complaint, suit or proceeding, the Company agrees
to engage competent legal representation, and Executive agrees to use the same
representation, provided that if counsel selected by the Company shall have a
conflict of interest that prevents such counsel from representing Executive,
Executive may engage separate counsel and the Company shall pay all reasonable
attorneys' fees and reasonable expenses of such separate counsel.  Further,
while Executive is expected at all times to use his best efforts to faithfully
discharge his duties under this Agreement, Executive cannot be held liable to
the Company for errors or omissions made in good faith where Executive has not
exhibited gross,

                                       10
<PAGE>

willful and wanton negligence and misconduct nor performed criminal and
fraudulent acts which materially damage the business of the Company.

          15.  Confidentiality.  Unless otherwise required by law or deemed
necessary or advisable by the Company in order to comply with securities laws,
each party shall keep the terms and conditions of this Agreement confidential;
provided, however, that Executive may disclose the terms and conditions of this
Agreement (a) to his spouse and advisors to obtain their counsel with respect
thereto, but only if his spouse and advisors agree to keep the terms and
conditions of this Agreement confidential in accordance with this paragraph 15,
and (b) to other persons to the extent disclosed by the Company.

          16.  Entire Agreement. This Agreement constitutes the entire agreement
between the parties and no statements, oral or written from any source, will
alter or vary the provisions contained herein.

          17.  Binding Effect.

          (a) This Agreement shall be binding upon and inure to the benefit of
the Company and its successors or assigns, and shall be binding upon and inure
to the benefit of Executive and his heirs.  The obligation of the Company to
make the payments required by paragraphs 3(b) and 3(c) hereof shall not be
affected by Executive's death, disability, or incapacity.

          (b) The Company shall require any assignee or acquiror of all or
substantially all of the assets or businesses of the Company (by means of
merger, acquisition of assets or otherwise) (i) to assume unconditionally and
expressly this Agreement and (ii) to agree to perform all of the obligations
under this Agreement in the same manner and to the same extent as would have
been required of the Company had no assignment or acquisition occurred.  In the
event of any such assignment, succession or acquisition, the term "Company" as
used in this Agreement shall refer also to such assign, successor or acquiror.

          18.  Enforceability and Severability.  This Agreement shall be
enforced to the fullest extent permissible under the laws and public policies
applied in any jurisdiction in which enforcement is sought.  To the extent that
any covenant hereunder shall be adjudicated to be invalid, illegal or
unenforceable in any one jurisdiction, this Agreement shall be deemed to be
amended to delete therefrom or reform the portion thus adjudicated to be
invalid, illegal or unenforceable, such deletion or reformation to apply only
with respect to the operation of this Section within the particular jurisdiction
in which such adjudication is made.  In the event that any one or more of the
provisions contained in the Agreement cannot for any reason be so reformed, the
same shall not affect the validity or enforceability of any other provision of
this Agreement, but this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein; provided,
however, that no provision shall be severed if it is clearly apparent under the
circumstances that the parties hereto would not have entered into the Agreement
without such provision.

                                       11
<PAGE>

        19. Governing Law. Except as provided in paragraph 9(i), the validity of
this Agreement, the construction of its terms and the determination of the
rights and duties of the parties hereto shall be construed in accordance with
the laws of the State of Louisiana, without regard to its conflicts of law
provision.

        20. Attorneys' Fees. Each party hereto agrees to pay the other party's
reasonable attorneys' fees and attorneys' expenses relating to any matter or
issue on which the other party prevails in litigation commenced by any party to
enforce or interpret this Agreement.

                                       12
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.

                                    CONRAD INDUSTRIES, INC.

                                    By: /s/ John P. Conrad, Jr.
                                       ---------------------------------
                                       John P. Conrad, Jr.
                                       Co-Chairman of the Board

                                    CONRAD SHIPYARD, L.L.C.

                                    By: /s/ Cecil A. Hernandez
                                       ---------------------------------
                                       Cecil A. Hernandez
                                       Secretary/Treasurer

                                    EXECUTIVE

                                     /s/ William H. Hidalgo
                                    ------------------------------------
                                    William H. Hidalgo

                                       13

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