401(K) Savings Plan

AMENDMENT NUMBER ONE
TO
AVONDALE INDUSTRIES, INC.
401(K) SAVINGS PLAN


WHEREAS, Avondale Industries, Inc. ("Employer") is the
sponsor of the Avondale Industries, Inc. 401(k) Savings Plan (the
"Plan") which was adopted effective January 1, 1996;


WHEREAS, the Plan can be amended by the Employer;


WHEREAS, it is desirable to amend the Plan to remove the
recordkeeping requirement for leased employees who are excluded
from participation, to clarify the definition of Year of Service,
to conform procedures to the Plan's operation and to conform the
date of eligibility for purposes of receiving an allocation of an
Employer Discretionary Contribution to the eligibility date in
the Avondale ESOP;


NOW, THEREFORE, the Plan is hereby amended, effective
January 1, 1996, to read as follows:


I.


Section 1.13 of Article I, Employee, of the Plan is amended
and restated to read as follows:


Employee shall mean a person employed by
an Employer, excluding any employee who is
included in a unit of employees covered by a
collective bargaining agreement which does
not provide for his participation in the
Plan. However, any Employee who is providing
services to the Employer under a contract
with an unrelated employer shall not be
considered an Eligible Employee under this
Plan.


II.


The parenthetical phrase of the first sentence of Section
1.42 of Article I, Year of Service, is amended and restated to
read as follows:


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