Change of Control Agreement

AMENDED AND RESTATED
CHANGE OF CONTROL AGREEMENT


This Change of Control Agreement ("the Agreement") between
Avondale Industries, Inc., a Louisiana corporation (the
"Company"), and Kenneth B. (/s/KBD) Dupont (the "Employee") is dated
effective as of January 19, 1996 (the "Change of Control
Agreement Date").


ARTICLE I
DEFINITIONS


1.1 Employment Agreement Defined. Notwithstanding any
provision thereof, after a Change of Control (defined below),
this Agreement supersedes the Employment Agreement dated as of
June 18, 1987 or any subsequent employment agreement between
Employee and the Company that so provides (the "Employment
Agreement").


1.2 Company Defined. As used in this Agreement, "Company"
shall mean the Company as defined above and any successor to or
assignee of (whether direct or indirect, by purchase, merger,
consolidation or otherwise) all or substantially all of the
assets or business of the Company.


1.3 Change of Control Defined. "Change of Control" shall
mean:


(a) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of more than 25% of the outstanding shares of
the Company's Common Stock, $1.00 par value per share (the
"Common Stock"); provided, however, that for purposes of
this subsection (a), the following acquisitions shall not
constitute a Change of Control:


(i) any acquisition of Common Stock directly from
the Company,


(ii) any acquisition of Common Stock by the
Company,


(iii)any acquisition of Common Stock by any
employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled
by the Company, or


(iv) any acquisition of Common Stock by any
corporation pursuant to a transaction that complies
with clauses (i), (ii) and (iii) of subsection (c) of
this Section 1.3; or


(b) individuals who, as of the Change of Control
Agreement Date, constitute the Board (the "Incumbent Board")
cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a
director subsequent to the Change of Control Agreement Date
whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board shall
be considered a member of the Incumbent Board, unless such
individual's initial assumption of office occurs as a result
of an actual or threatened election contest with respect to
the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on
behalf of a person other than the Incumbent Board; or


(c) consummation of a reorganization, merger or
consolidation, or sale or other disposition of all of
substantially all of the assets of the Company (a "Business
Combination"), in each case, unless, following such Business
Combination,


(i) all or substantially all of the individuals
and entities who were the beneficial owners of the
Company's outstanding common stock and the Company's
voting securities entitled to vote generally in the
election of directors immediately prior to such
Business Combination have direct or indirect beneficial
ownership, respectively, of more than 50% of the then
outstanding shares of common stock, and more than 50%
of the combined voting power of the then outstanding
voting securities entitled to vote generally in the
election of directors, of the corporation resulting
from such Business Combination (which, for purposes of
this paragraph (i) and paragraphs (ii) and (iii), shall
include a corporation which as a result of such
transaction controls the Company or all or
substantially all of the Company's assets either
directly or through one or more subsidiaries), and


(ii) except to the extent that such ownership
existed prior to the Business Combination, no person
(excluding any corporation resulting from such Business
Combination or any employee benefit plan or related
trust of the Company or such corporation resulting from
such Business Combination) beneficially owns, directly
or indirectly, 20% or more of the then outstanding
shares of common stock of the corporation resulting
from such Business Combination or 20% or more of the
combined voting power of the then outstanding voting
securities of such corporation, and


(iii)at least a majority of the members of the
board of directors of the corporation resulting from
such Business Combination were members of the Incumbent
Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for
such Business Combination; or


(d) approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.


1.4 Affiliate Defined. "Affiliate" or "affiliated
companies" shall mean any company controlled by, controlling, or
under common control with, the Company.


1.5 Cause Defined. "Cause" shall mean:


(a) the willful and continued failure of the
Employee to perform substantially the Employee's duties
with the Company or its affiliates (other than any such
failure resulting from incapacity due to physical or
mental illness), after a written demand for substantial
performance is delivered to the Employee by the Board
of the Company which specifically identifies the manner
in which the Board believes that the Employee has not
substantially performed the Employee's duties, or


(b) the willful engaging by the Employee in
illegal conduct or gross misconduct.


For purposes of this provision, no act or failure to act, on the
part of the Employee, shall be considered "willful" unless it is
done, or omitted to be done, by the Employee in bad faith or
without reasonable belief that the Employee's action or omission
was in the best interests of the Company or its Affiliates. Any
act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or upon the instructions of
a senior officer of the Company or based upon the advice of
counsel for the Company or its Affiliates shall be conclusively
presumed to be done, or omitted to be done, by the Employee in
good faith and in the best interests of the Company or its
Affiliates. The cessation of employment of the Employee shall
not be deemed to be for Cause unless and until there shall have
been delivered to the Employee a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting of the Board
called and held for such purpose (after reasonable notice is
provided to the Employee and the Employee is given an
opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the
Employee is guilty of the conduct described in subparagraph (a)
or (b) above, and specifying the particulars thereof in detail.


1.6 Disability Defined. "Disability" shall mean a
condition that would entitle the Employee to receive benefits
under the Company's long-term disability insurance policy in
effect at the time either because he is Totally Disabled or
Partially Disabled, as such terms are defined in the Company's
policy in effect as of the date of this Agreement or as similar
terms are defined in any successor policy. If the Company has no
long-term disability plan in effect, "Disability" shall occur if
(a) the Employee is rendered incapable because of physical or
mental illness of satisfactorily discharging his duties and
responsibilities to the Company for a period of 90 consecutive
days, (b) a duly qualified physician chosen by the Company and
acceptable to the Employee or his legal representatives so
certifies in writing, and (c) the Board determines that the
Employee has become disabled.
1.7 Good Reason Defined. "Good Reason" shall mean:


(a) Any failure of the Company or its Affiliates to
provide the Employee with the position, authority, duties
and responsibilities at least commensurate in all material
respects with the most significant of those held, exercised
and assigned at any time during the 120-day period
immediately preceding the Change of Control. Employee's
position, authority, duties and responsibilities after a
Change of Control shall not be considered commensurate in
all material respects with Employee's position, authority,
duties and responsibilities prior to a Change of Control
unless after the Change of Control Employee holds (i) an
equivalent position in the Company or, (ii) if the Company
is controlled or will after the transaction be controlled by
another company (directly or indirectly), an equivalent
position in the ultimate parent company.


(b) The assignment to the Employee of any duties
inconsistent in any material respect with Employee's
position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 2.1(b) of this Agreement, or any
other action that results in a diminution in such position,
authority, duties or responsibilities, excluding for this
purpose an isolated, insubstantial and inadvertent action
not taken in bad faith that is remedied within 10 days after
receipt of written notice thereof from the Employee to the
Company;


(c) Any failure by the Company or its Affiliates to
comply with any of the provisions of this Agreement, other
than an isolated, insubstantial and inadvertent failure not
occurring in bad faith that is remedied within 10 days after
receipt of written notice thereof from the Employee to the
Company;


(d) The Company or its Affiliates requiring the
Employee to be based at any office or location other than as
provided in Section 2.1(b)(ii) hereof or requiring the
Employee to travel on business to a substantially greater
extent than required immediately prior to the Change of
Control;


(e) Any purported termination of the Employee's
employment otherwise than as expressly permitted by this
Agreement; or


(f) Any failure by the Company to comply with and
satisfy Sections 3.1(c) and (d) of this Agreement.


ARTICLE II
CHANGE OF CONTROL BENEFIT


2.1 Employment Term and Capacity after Change of Control.
(a) If a Change of Control occurs on or before December 31, 2000,
then the Employee's employment term (the "Employment Term") shall
continue through the third anniversary of the Change of Control,
subject to any earlier termination of Employee's status as an
employee pursuant to this Agreement.


(b) After a Change of Control and during the Employment
Term, (i) the Employee's position (including status, offices,
titles and reporting requirement ...