EXHIBIT 10.7

                                 OMI CORPORATION
                            2001 INCENTIVE BONUS PLAN


                                    ARTICLE I

                               PURPOSE OF THE PLAN

      The purpose of the OMI Corporation 2001 Incentive Bonus Plan is to promote
the short- and long-term interests of the Company by retaining select executive
officers of the Company or its subsidiaries and aligning the interests of such
executive officers with those of the Company's shareholders by linking such
executive officers' compensation to the performance and value of the Company.


                                   ARTICLE II

                          DEFINITIONS OF CERTAIN TERMS

      As used in the Plan, the following terms shall have the following
meanings:

2.1.  ACTUAL EPS, for a particular Plan Year, means the EPS for such Plan Year
      as reported in the Company's audited annual consolidated financial
      statements for such Plan Year.

2.2.  BOARD means the Board of Directors of the Company.

2.3.  BONUS PERCENTAGE means, for a given Plan Year, a percentage determined in
      accordance with Section 4.1 based upon the relationship between Actual EPS
      to Target EPS for such Plan Year.

2.3.  CAUSE means one of (a) or (b), as applicable: (a) any misconduct,
      dishonesty, insubordination or other act of a Participant which is, or is
      intended to be, materially detrimental to the Company, or materially
      damaging to the Company's relationships with its customers, employees,
      shareholders and/or suppliers, as determined by the Committee in its
      discretion; or (b) if a Participant has entered into an employment
      agreement with the Company, "cause" as defined therein, or a material
      breach of such employment agreement by such Participant.

2.4.  CHANGE IN CONTROL means a "change in control" with respect to the Company
      that would be required to be reported in response to Item 1(a) of the
      Company's current report on Form 8-K, pursuant to Section 13 or 15(d) of
      the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
      equivalent for foreign filers; provided that, without limitation, a
      "Change in Control" shall be deemed to have occurred at such time as any
      person or group of persons, within the meaning of Section 13(d) or 14(d)
      of the Exchange Act, is or becomes the "beneficial owner" (as defined in
      Rule 13d-3 under the Exchange



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      Act), directly or indirectly, of twenty percent (20%) or more of the
      combined voting power of the then outstanding securities of the Company
      (other than, in any such event, a sale or other disposition to or for the
      benefit of any employee benefit plan (or related trust) of the Company or
      a subsidiary of the Company, or acquisition or offer to acquire, by or on
      behalf of, the Company or a subsidiary of the Company or any group
      comprised solely of such entities, of shares of Stock); provided, however,
      that a "Change in Control" shall not be deemed to have occurred if such a
      person or group files and maintains a Schedule 13G pursuant to Rule 13d-1
      under the Exchange Act in connection with its purchase of such securities;
      provided further, however, that upon the filing of a Schedule 13D pursuant
      to such rule by such person or group in connection with such securities,
      there shall be deemed to be an immediate "Change in Control." The
      foregoing to the contrary notwithstanding, a "Change in Control" shall be
      deemed to have occurred if individuals who constitute the "Incumbent
      Board" cease for any reason to constitute at least a majority of the
      Board. "Incumbent Board" shall mean those individuals who constitute the
      Board immediately following the effective date of the Plan, or any
      successor or additional individual who becomes a member of the Board and
      whose election, or nomination for election, by the shareholders of the
      Company was approved by a vote of at least three-fourths of the members of
      the Board comprising the Incumbent Board (either by a specific vote or by
      approval of the proxy statement of the Company in which such individual
      was named as a nominee for member of the Board without objection to such
      nomination).

2.5.  COMMITTEE means the Compensation Committee of the Board or such other
      Board committee as may be designated by the Board to administer the Plan.

2.6.  COMPANY means OMI Corporation, a Marshall Islands corporation.

2.7.  DECLARED BONUS means the bonus award, if any, earned by a Participant for
      a particular Plan Year in accordance with the provisions of Article IV of
      the Plan.

2.8.  EPS means the Company's and its consolidated subsidiaries' earnings per
      share.

2.9.  GOOD REASON means one of (a) or (b), as applicable: (a) any of the
      following: (i) a relocation of the Company's offices (or the location of
      the performance of work by the Participant) beyond a fifty (50)-mile
      radius of New York City after a Change in Control, (ii) a material
      diminution of the Participant's duties, responsibilities, authorities,
      titles, offices and/or reporting relationships with the Company or the
      subsidiary employing such Participant, or (iii) a reduction of the
      Participant's base salary or potential incentive compensation; or (b) if a
      Participant has entered into an employment agreement with the Company or a
      subsidiary thereof, "good reason" as defined therein, or a material breach
      of such employment agreement by the Company or such subsidiary.

2.10. PARTICIPANT means an executive officer of the Company or subsidiary
      thereof designated by the Committee from time to time as a participant in
      the Plan with respect to any Plan Year in accordance with Article III.



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2.12. PLAN means this OMI Corporation 2001 Incentive Bonus Plan.

2.13. PLAN YEAR means the applicable calendar year or such other fiscal year
      designated by the Committee.

2.14. TARGET EPS, for a particular Plan Year, means the budgeted "Minimum,"
      "Base," and/or "Maximum" EPS for such Plan Year, as the case may be,
      determined in accordance with Section 4.1.

2.15. TOTAL DISABILITY means a mental or physical impairment or incapacity
      rendering a Participant substantially unable to perform his or her duties
      to the Company or its subsidiaries for a period of longer than 180 days
      out of any 365-day period during the period employed by the Company or its
      subsidiaries, as determined by the Committee in its discretion.


                                   ARTICLE III

                          ELIGIBILITY AND PARTICIPATION


3.1   ELIGIBILITY. Executive officers of the Company or its subsidiaries shall
      be eligible to participate in the Plan. The Committee shall make all
      determinations concerning eligibility to participate in the Plan.

3.2   PARTICIPATION. Prior to the commencement of each Plan Year, the Committee
      shall select from eligible executive officers of the Company or its
      subsidiaries the Participants, if any, who shall participate in the Plan
      during such Plan Year. The Committee shall provide each Participant for a
      given Plan Year with written notice of his or her selection as a
      Participant prior to the commencement of such Plan Year. Notwithstanding
      the foregoing, in the case of the first Plan Year (calendar year 2001),
      the Committee shall select and notify the eligible executive officers of
      the Company or its subsidiaries who may become Participants as soon as
      practicable following the effective date of the Plan; provided, however,
      that in order to be entitled to become a Participant for such Plan Year,
      such an eligible executive officer shall first be required to provide the
      Committee with a written waiver of his or her right to receive the cash
      portion of any bonus for the 2001 calendar year pursuant to the Company's
      bonus plan in effect immediately prior to the effective date of the Plan.

3.3   NO RIGHT TO PARTICIPATE. The adoption of the Plan shall not be deemed to
      give any executive officer or other employee of the Company or its
      subsidiaries any right to be selected to participate in the Plan.
      Participation in the Plan for any given Plan Year shall not be deemed to
      give a Participant any right to participate in the Plan for any other Plan
      Year.



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                                   ARTICLE IV

                             DECLARED BONUS PAYMENT

4.1.  DECLARED BONUS COMPUTATION. Not later than the time annual budgets of the
      Company are established for any Plan Year, the Company's [Chief Executive
      Officer] shall submit to the Committee recommended budgeted Minimum Target
      EPS, Base Target EPS and Maximum Target EPS for such Plan Year. Prior to
      the commencement of such Plan Year, the Committee shall establish the
      Minimum Target EPS, Base Target EPS and Maximum Target EPS for such Plan
      Year and shall communicate in writing each such Target EPS to all
      Participants; provided, however, that with respect to the 2001 Plan Year,
      each such Target EPS shall be established by the Committee prior to the
      effective date of the Plan and shall be communicated in writing to all
      Participants as soon as practicable following such effective date.

      The amount of a Participant's Declared Bonus under the Plan for a Plan
      Year is the product of such Participant's annual base salary, at the rate
      in effect as of the close of such Plan Year, multiplied by the Bonus
      Percentage for the applicable Plan Year determined based on the Actual EPS
      for such Plan Year in accordance with the following table and provisions
      of this Section 4.1:

          If the Actual EPS is:                Then the Bonus Percentage is:
          ---------------------                -----------------------------
          Less than Minimum Target EPS                      Zero percent (0%)
          Equal to Minimum Target EPS                       Ten percent (10%)
          Equal to Base Target EPS                 One hundred percent (100%)
          Equal to Maximum Target EPS        One hundred fifty percent (150%)
          In excess of Maximum Target EPS    One hundred fifty percent (150%)

      To the extent that the Actual EPS for a Plan Year exceeds the Minimum
      Target EPS and is less than the Base Target EPS for such Plan Year, the
      Bonus Percentage for such Plan Year shall be determined on a straight-line
      basis between 10% and 100% by linear interpolation. Similarly, to the
      extent that the Actual EPS for a Plan Year exceeds the Base Target EPS and
      is less than the Maximum Target EPS for such Plan Year, the Bonus
      Percentage for such Plan Year shall be determined on a straight-line basis
      between 100% and 150% by linear interpolation. In the event the Actual EPS
      for a Plan Year exceeds the Maximum Target EPS for such Plan Year to any
      extent, the Bonus Percentage for such Plan Year shall be 150%. In the
      event that the Actual EPS for a Plan Year is less than the Minimum Target
      EPS for such Plan Year, the Bonus Percentage for such Plan Year shall be
      0%; provided, however that the Committee may, in its sole discretion,
      determine that a bonus for such Plan Year shall be paid to any one or more
      Participants, in such amount as the Committee, in its sole discretion, may
      determine.

      For the avoidance of ambiguity, any Declared Bonus for the 2001 Plan Year
      shall be computed in accordance with the terms of the Plan with respect to
      the full 2001 calendar year, without any pro-ration or adjustment on
      account of a partial Plan Year.



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4.2.  EXAMPLE OF CALCULATION OF A DECLARED BONUS. This example demonstrates the
      calculation of the Declared Bonus for a Plan Year using the following
      hypothetical amounts for such Plan Year:

         Minimum Target EPS                 =        $1.14
         Base Target EPS                    =        $1.25
         Maximum Target EPS                 =        $1.75
         Actual EPS                         =        $1.50
         Participant's annual base salary   =     $200,000

      Since the Actual EPS is between the Base Target EPS and the Maximum Target
      EPS, the Bonus Percentage is determined on a straight-line basis between
      100% and 150% according to the provisions set forth in Section 4.1.
      Accordingly, the Bonus Percentage is determined by multiplying the
      differential between 100% and 150% (50%) by a fraction, the numerator of
      which is the excess of the Actual EPS over the Base Target EPS and the
      denominator of which is the excess of the Maximum Target EPS over the Base
      Target EPS, and adding the result to 100%, as shown below:

                           _                             _
                          | (150% - 100%) x $1.50 - $1.25 |
                          |                 ------------- |
                   100% + |                 $1.75 - $1.25 | = 125%
                          |_                             _|

      The Bonus Percentage for the Plan Year in this example is, therefore,
      125%. The Bonus Percentage is multiplied by the Participant's annual base
      salary for such Plan Year to determine the Participant's Declared Bonus in
      this example, as shown below:

                           125%  x  $200,000  =  $250,000

4.3.  METHOD AND TIME OF PAYMENT. Any Declared Bonus amounts owed to
      Participants under the Plan shall be paid to the respective Participants
      in cash (by check, bank draft, money order or wire transfer) on or as soon
      as practicable following the date such amounts are determined, but in no
      event later than March 31 of the year following the Plan Year to which the
      applicable Declared Bonus relates. The foregoing to the contrary
      notwithstanding, each Participant may, from time to time, name any
      beneficiary or beneficiaries to whom any amount due but unpaid to such
      Participant under the Plan is to be paid in the case of such Participant's
      death. Each such beneficiary designation shall revoke all prior
      designations by the same Participant, shall be in a form prescribed by the
      Committee, and will be effective only when filed by the Participant in
      writing with the Committee or its designee during the Participant's
      lifetime. In the absence of any such beneficiary designation, any amounts
      due but remaining unpaid to a Participant at the time of the Participant's
      death shall be paid as designated by the Participant by will or by the
      laws of descent and distribution.



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                                    ARTICLE V

                    TERMINATION OF EMPLOYMENT; ADMINISTRATION

5.1.  COMMITTEE DETERMINATIONS. Before any amount is paid under the Plan, the
      Committee shall determine the Bonus Percentage for the Plan Year, the
      Declared Bonuses and all other material terms of the calculation of the
      Declared Bonuses, and the extent to which each Participant is entitled, if
      at all, to such payment in accordance with the Plan.

5.2.  TERMINATION OF EMPLOYMENT.

      (a)   If, at any time before the end of the applicable Plan Year, the
            Company terminates a Participant's employment with the Company for
            Cause, or a Participant ceases employment with the Company under any
            other circumstances, other than Total Disability, death or
            resignation with Good Reason, then such Participant shall be deemed
            to have ceased participation in the Plan and shall not be entitled
            to receive any payments under the Plan with respect to such Plan
            Year.

      (b)   If, at any time before the end of the applicable Plan Year, the
            Company or a subsidiary thereof terminates a Participant's
            employment with the Company or a subsidiary for reasons other than
            Cause, or if a Participant ceases employment with the Company or
            such a subsidiary due to Total Disability, death or due to the
            Participant's resignation with Good Reason, then such Participant's
            Declared Bonus with respect to such Plan Year shall be paid at the
            time Declared Bonuses are otherwise payable for such Plan Year in
            accordance with Section 4.3, but such Participant's Declared Bonus
            shall be prorated based on that portion of the Participant's annual
            base salary payable for the portion of the applicable Plan Year that
            the Participant was an active employee of the Company or a
            subsidiary thereof.

      (c)   If, following a Change in Control:

            (i)   a Participant's employment with the Company or a subsidiary
                  thereof is terminated (regardless of whether such termination
                  is in connection with the Change in Control; by the Company or
                  a subsidiary thereof for Cause or without Cause; a resignation
                  by the Participant with or without Good Reason; or otherwise),
                  or

            (ii)  the Plan is terminated without establishment by the Company or
                  its successor or acquiror of a comparable cash bonus plan of
                  equivalent value

            (such terminated Participant, in the case of clause (i), or all
            Participants in the case of clause (ii), shall be referred to as
            "Affected Participants"), then the Affected Participants' annual
            base salaries for the Plan Year during which such termination of
            employment or termination of the Plan, as applicable, occurs (using
            the higher of an Affected Participant's rate of base salary in
            effect immediately prior to the



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            termination of employment or termination of the Plan, as applicable,
            or in effect immediately prior to the Change in Control, and such
            Affected Participant's base salary, for this purpose, shall not be
            reduced by amounts not actually paid for any portion of the Plan
            Year remaining after any termination of employment) and a Bonus
            Percentage of 150% shall be automatically deemed to apply for
            purposes of determining the Affected Participants' Declared Bonus
            payments with respect to such Plan Year under Section 4.1, and
            Declared Bonuses shall be paid to the Affected Participants as soon
            as practicable following such termination of employment or
            termination of the Plan, as the case may be.

5.3.  ADMINISTRATION OF THE PLAN. The Committee shall have full power and
      exclusive authority to interpret and administer the Plan in accordance
      with its terms and conditions. Notwithstanding the foregoing, in its
      absolute discretion, the Board may at any time and from time to time
      exercise any and all rights, duties and responsibilities of the Committee
      under the Plan, including, but not limited to, establishing procedures to
      be followed by the Committee. The Committee may from time to time make
      such decisions and adopt such rules, regulations and procedures as it may
      deem appropriate for implementation and administration of the Plan. In the
      event that the Committee decides, in its sole discretion, that it is
      appropriate to do so, the Committee may increase the amount, or accelerate
      the timing of payment, of the bonus, if any, otherwise payable to any
      Participant under the Plan. The Committee shall have full discretionary
      authority in all matters related to the discharge of its responsibilities
      and exercise of its authorities under the Plan. Decisions and actions by
      the Committee with respect to the Plan shall be final, conclusive, and
      binding upon all Participants and any other persons having or claiming to
      have any right or interest under the Plan.


                                   ARTICLE VI

                               GENERAL PROVISIONS

6.1.  PLAN UNFUNDED. The Plan shall be unfunded. The Company shall not be
      required to establish any special or separate fund or to make any other
      segregation of assets to assure the payment of any amount under the Plan.
      Neither the Participants nor any other persons shall have any interest in
      any fund or in any specific assets of the Company by reason of
      participation in the Plan, nor have any rights to receive payment under
      the Plan except to the extent expressly provided hereunder. The interest
      of a Participant hereunder is unsecured and shall be subject to the claims
      of the general creditors of the Company. The Company shall bear all costs
      and expenses incurred in administering the Plan.

6.2.  WITHHOLDING OF TAXES. The Company shall have the right to withhold the
      amount of any taxes which the Committee determines is required by law to
      be withheld with respect to any amount due or payable under the Plan, and
      the Company shall, to the extent permitted by law, have the right to
      deduct any such taxes from any payment of any kind otherwise due to or in
      respect of a Participant.



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6.3.  RIGHTS OF PARTICIPANTS AND OTHER PERSONS. No person shall have any rights
      or claims under the Plan except in accordance with the provisions of the
      Plan. Neither the establishment of the Plan nor anything contained in the
      Plan shall be deemed to give any Participant the right to be retained in
      the service of the Company or any subsidiary of the Company nor restrict
      in any way the right of the Company or any such subsidiary to terminate
      the service of any Participant at any time with or without cause.

6.4.  RIGHTS PERSONAL TO EMPLOYEE. Any rights provided to a Participant under
      the Plan shall be personal to such Participant, may not be transferred,
      pledged, hypothecated, sold, alienated, or assigned, otherwise than by
      will or pursuant to the laws of descent or distribution, and shall not be
      subject to claim by a Participant's creditors or become subject to
      execution, garnishment or attachment, and any attempt by any person to do
      so shall be absolutely void and result in the immediate forfeiture of all
      rights under the Plan.

6.5.  NOTICE. Any notice, consent or other communication relating to the Plan
      shall be in writing and, if to the Company, shall be delivered in person
      to the Company's Secretary or sent by facsimile to the Company at (203)
      602-6701, attention Secretary, or sent by certified or registered mail,
      return receipt requested, or reputable overnight courier, prepaid, to OMI
      Corporation, One Station Place, Stamford Connecticut 06902, Attention:
      Secretary; and, if to a Participant, shall be sent by certified or
      registered mail, return receipt requested, prepaid, to such Participant at
      his or her last address maintained in the records of the Company.

6.6.  APPLICABLE LAW. The Plan shall be governed by and construed in accordance
      with the laws of the State of New York, without regard to the conflict of
      laws provisions thereof.

6.7.  CONSTRUCTION. The word "Section" herein shall refer to sections of the
      Plan, unless expressly indicated otherwise. Wherever any words are used in
      the Plan in the masculine gender they shall be construed as though they
      were also used in the feminine gender in all cases where they would so
      apply, and wherever any words are used herein in the singular form they
      shall be construed as though they were also used in the plural form in all
      cases where they would so apply.


                                   ARTICLE VII

                   EFFECTIVE DATE; AMENDMENTS AND TERMINATION

7.1   EFFECTIVE DATE. The Plan shall be adopted and approved by the Board and,
      following such adoption and approval, shall become effective on July 1,
      2001.

7.2   AMENDMENT AND TERMINATION. The Board may, at any time and with or without
      prior notice, amend, alter, suspend, or terminate the Plan, retroactively
      or otherwise; provided, however, that no such amendment, alteration,
      suspension or termination shall be made which would impair the previously
      accrued rights of any Participant under the Plan without his or her
      written consent, and, if the Plan is not terminated earlier by the Board,



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      the Plan shall terminate and have no further force or effect on December
      31, 2006, subject to full payment of all Declared Bonuses with respect to
      Plan Years ending on or before December 31, 2006, to the Participants
      entitled thereto.












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