EMPLOYMENT AGREEMENT
                              --------------------

THIS EMPLOYMENT AGREEMENT (the "Agreement") dated as of August 3, 1995 between
OMI Corp., a Delaware corporation (the "Company") and ROBERT BUGBEE (the
"Executive") amends and restates the Employment Agreement dated as of January
23, 1995.

                               W I T N E S S E T H
                               -------------------

WHEREAS, the Company desires to continue to employ the Executive; and

WHEREAS, the Executive is willing to continue to be employed by the Company, as
a senior executive of the Company, for the period and upon the terms and
conditions hereinafter set forth;

NOW THEREFORE, in consideration of the mutual covenants and conditions contained
herein, the Company and the Executive hereby agree as follows:

     1. EMPLOYMENT
        ----------

     The Company shall employ the Executive, and the Executive accepts
employment by the Company, as Senior Vice President of the Company upon the
terms and conditions herein, for the period commencing as of January 23, 1995,
and ending on December 31, 1996, subject to termination as hereinafter provided
(the period from January 23, 1995 through December 31, 1996, as such period may
be extended as described in this paragraph, being herein referred to as the
"Employment Period"). The Executive term of employment shall be automatically
extended for an additional period of one year unless written notice of
termination is given by either party no later than December 31, 1995, and for an
additional period thereafter of one year unless written notice of termination is
given by either party no later than December 31, 1996. If, upon expiration of
this Agreement, the Company desires to continue to employ the Executive and the
Executive desires to continue in the employ of the Company, such employment
shall be continued on terms and conditions which the Company and the Executive
find mutually satisfactory and which are consistent with the employment policies
of the Company.

     2. DUTIES
        ------

     (a) Throughout the Employment Period, the Executive shall be Senior Vice
President of the Company and shall report to the President, the Chief Executive
Officer and the Board of Directors (the "Board") of the Company. The Executive
shall at all times comply with Company policies as established by the Board.

     (b) During the Employment Period, the Executive shall devote his full-time
working hours to his duties hereunder, except during vacation time, any periods
of illness and authorized leaves of



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absence. The Executive shall have such responsibilities and authorities
consistent with the status, title and reporting requirements set forth herein as
are appropriate to said position, subject to change (other than diminution in
position, authority, duties or responsibilities) from time to time by the
President, Chief Executive Officer and/or the Board.

     (c) Throughout the Employment Period, the Executive shall faithfully and
diligently perform his duties under this Agreement and shall use his best
efforts to promote the interests of the Company.

     3. COMPENSATION
        ------------

     During the Employment Period, as full compensation to the Executive for his
performance of the services hereunder and for his acceptance of the
responsibilities described herein, the Company agrees to pay the Executive, and
the Executive agrees to accept, the following salary and other benefits:

     (a) Salary
         ------

     The Company shall pay the Executive a salary (the "Base Salary") at the
annual rate of $206,000. The Board shall review such Base Salary on an
annual basis and may increase it, from time to time, in its sole discretion. The
Base Salary due the Executive hereunder shall be payable in equal monthly
installments less any amounts required to be withheld by the Company from such
Base Salary pursuant to the benefit plans of Section 3(d) and applicable laws
and regulations described under Section 10(e).

     (b) Bonus
         -----

     The Executive shall be eligible to receive bonuses (each a "Bonus") at the
discretion, in the amount and at the times determined by the Board of Directors
of the Company; except that in the event of a Change in Control (as hereinafter
defined), the Executive shall immediately receive a cash payment in an amount
equal to the aggregate bonuses paid during the twelve-month period ending on the
date of the Change in Control.

     (c) Long Term Incentives
         --------------------

     The Executive shall be entitled to receive grants of restricted stock,
stock options and other stock awards at the discretion of the Compensation
Committee of the Board of Directors of the Company and/or other stock and cash
awards granted pursuant to any other long term incentive plans implemented by
the Company for the benefit of senior executives of the Company.

     (d) Other Benefit Plans
         -------------------

     Subject to all eligibility requirements, and to the extent permitted by
law, the Executive shall be entitled to participate in

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any and all employee welfare and benefit plans (including, but not limited to,
retirement security, life insurance, medical, dental, disability, and savings
plans) established by the Company from time to time for the general and overall
benefit of executives of the Company.

     (e) Further Benefits
         ----------------

         The Executive shall be entitled to a minimum of four weeks per annum
paid vacation.

     (f) Deferred Compensation
         ---------------------

     Notwithstanding any other provision of the Agreement, the Executive shall
have the right to request any lawful means (including, without limitation, any
deferred compensation arrangement requested by the Executive) by which he or she
wishes to receive any portion of his or her Base Salary, Bonus, or other
payments, and the Company shall reasonably cooperate with the Executive to grant
such request, provided that the granting of such request does not represent
inequitable treatment as concerns other senior employees or executives (in the
Company's sole judgment), and does not impose additional costs on the Company
other than insignificant administrative costs.

     4. REASONABLE EXPENSES
        -------------------

     The Company will reimburse the Executive for all reasonable business
expenses, including travel and lodging, which are properly incurred by him or
her in the performance of his or her duties hereunder, upon presentation of
proper vouchers therefor and in accordance with written policies established
from time to time by the Company for such reimbursements.

     5. EXECUTIVE COVENANTS
        -------------------

     The Executive acknowledges that as a result of the services to be rendered
to the Company hereunder, the Executive will be brought into close contact with
many confidential affairs of the Company, its subsidiaries and affiliates, not
readily available to the public. The Executive further acknowledges that the
services to be performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character; that the business of the Company is
international in scope; that its goods and services are marketed throughout the
world; and that the Company competes with other organizations that are or could
be located in nearly any part of the United States or elsewhere. In recognition
of the foregoing:

          (a) Except with the consent of or as directed by the Company, or
     except if compelled by judicial or legal authorities, the Executive will
     keep confidential and not divulge to any other

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person, during the Employment Period or thereafter, any Confidential Information
and Trade Secrets regarding the Company, its subsidiaries and affiliates, except
for information which is or becomes publicly available other than as a result of
disclosure by the Executive. For the purposes of this Agreement "Confidential
Information and Trade Secrets" means information which is secret to the Company,
its subsidiaries and affiliates. It may include, but is not limited to,
information relating to new and future concepts and business of the Company, its
subsidiaries and affiliates, in the form of memoranda, reports, computer
software and data banks, customer lists, employee lists, books, records,
financial statements, manuals, papers, contracts and strategic plans. As a
guide, the Executive is to consider information originated, owned, controlled or
possessed by the Company, its subsidiaries or affiliates which is not disclosed
in printed publications stated to be available for distribution outside the
Company, its subsidiaries and affiliates as being secret and confidential. In
instances where doubt does or should reasonably be understood to exist in the
Executive's mind as to whether information is secret and confidential to the
Company, its subsidiaries and affiliates, the Executive agrees to request an
opinion, in writing, from the Company.

          (b) All papers, books and records of every kind and description
     relating to the business and affairs of the Company, its subsidiaries and
     affiliates, whether or not prepared by the Executive, and all property
     owned by the Company, its subsidiaries and affiliates shall be the sole and
     exclusive property of the Company, and the Executive shall surrender them
     to the Company, at any time upon request, during or after the Employment
     Period.

          (c) During the Employment Period and during any Severance Period (as
     hereinafter defined), the Executive will not, without the prior written
     consent of the Company, compete, directly or indirectly, with the Company,
     its subsidiaries and affiliates or participate as a director, officer,
     employee, agent, representative, stockholder, or partner, or have any
     direct or indirect financial interest as a creditor, in any business which
     directly or indirectly competes with the Company its subsidiaries and
     affiliates; provided, however, that this paragraph (c) shall not restrict
     the Executive from holding up to 5% of the publicly traded securities of
     any entity.

          (d) During the Employment Period and during any Severance Period (as
     hereinafter defined), the Executive shall not either for his or her own
     account or for any person, firm or company (i) solicit any customers of the
     Company, its subsidiaries and affiliates or (ii) solicit or endeavor to
     cause any employee of the Company, its subsidiaries and affiliates to leave
     his employment or induce or attempt to induce any such employee to breach
     any employment agreement with the Company, its subsidiaries and affiliates,
     or otherwise interfere with the employment of any

                                        4


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employee by the Company, its subsidiaries and affiliates.

          (e) Without limiting any other provision of this Agreement, the
     Executive hereby agrees to be bound by and to comply with any obligations
     known to the Executive and imposed on the Company, its subsidiaries and
     affiliates, by law, rule, regulation, ordinance, order, decree, instrument,
     agreement, understanding or other restriction of any kind.

          (f) The Executive hereby agrees to provide reasonable cooperation to
     the Company, its subsidiaries and affiliates during the Employment Period
     and any Severance Period (as hereinafter defined) in any litigation between
     the Company, its subsidiaries and affiliates, and third parties.

          (g) The parties agree that the Company shall, in addition to other
     remedies provided by law, have the right and remedy to have the provisions
     of this Section 5 specifically enforced by any court having equity
     jurisdiction, it being acknowledged and agreed that any breach or
     threatened breach of the provisions of this Section 5 will cause
     irreparable injury to the Company and that money damages will not provide
     an adequate remedy to the Company. Nothing contained herein shall be
     construed as prohibiting the Company from pursuing any other remedies
     available to it for such breach or threatened breach, including the
     recovery of damages from the Executive.

          (i) although the restrictions contained in Sections 5(a), (b), (c) and
     (d) above are considered by the parties hereto to be fair and reasonable in
     the circumstances, it is recognized that restrictions of such nature may
     fail for technical reasons, and accordingly it is hereby agreed that if any
     of such restrictions shall be adjudged to be void or unenforceable for
     whatever reason, but would be valid if part of the wording thereof were
     deleted, or the period thereof reduced or the area dealt with thereby
     reduced in scope, the restrictions contained in Sections 5(a), (b), (c) and
     (d) shall be enforced to the maximum extent permitted by law, and the
     parties consent and agree that such scope or wording may be accordingly
     judicially modified in any proceeding brought to enforce such restrictions.

          (ii) Notwithstanding that the Executive's employment hereunder may
     expire or be terminated as provided in Section 1 or Section 6 hereof, this
     Agreement shall continue in full force and effect insofar as is necessary
     to enforce the covenants and agreements of the Executive contained in this
     Section 5.

     6. TERMINATION OF EMPLOYMENT PERIOD AND SEVERANCE
        ----------------------------------------------

     (a) Termination by the Company without Cause. If for any reason other than
the provisions of Section 6(d) hereof, the

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Company wishes to terminate the Employment Period and the Executive's employment
hereunder, the Company shall give a written notice to the Executive of such
termination stating that a severance period (the "Severance Period") will
commence upon receipt of such notice by the Executive. The Severance Period
shall be for the balance of the then current term of this Agreement or twelve
months, whichever is greater. Upon receipt of such notice by the Executive, the
Employment Period shall terminate (and the Executive shall have no further
duties under Section 2 hereof). During the entire Severance Period, the
Executive shall continue to receive all salary, compensation, payments and
benefits under Sections 3(a) and 3(d) of this Agreement (including, to the
extent allowable under applicable law, the accrual of additional service credits
or Company contributions under pension and thrift plans, and any benefits under
the Company's long term disability and life insurance plans) available upon the
date of the commencement of the Severance Period as if the Employment Period
continued throughout the Severance Period. The Executive agrees that the
payments described in this Section 6(a) shall be full and adequate compensation
to the Executive for all damages the Executive may suffer as a result of the
termination of his employment pursuant to this Section 6(a), and hereby waives
and releases the Company from any and all obligations or liabilities to the
Executive arising from or in connection with the Executive's employment with the
Company or the termination and claims the Executive may have under federal,
state or local statutes, regulations or ordinances or under any common law
principles or breach of contract or the covenant of good faith and fair dealing,
defamation, wrongful discharge, intentional infliction of emotional distress or
promissory estoppel; provided, however, that any rights and benefits the
Executive may have under the employee benefit plans and programs of the Company
in which the Executive is a participant, shall be determined in accordance with
the terms and provisions of such plans and programs.

     (b) Death. If the Executive dies during the Employment Period, the
Severance Period or during the period when payments are being made pursuant to
Section 6(c), the Employment Period shall automatically terminate and the
obligations of the parties shall terminate effective the date of death.

     (c) Disability. If the Executive becomes Disabled (as hereinafter defined)
during the Employment Period, the Company shall be entitled to terminate his or
her employment and the Employment Period upon written notice to the Executive
from the Company. In the event of such termination, the Executive shall be
released from any duties hereunder, and the Severance Period described in
Section 6(a) hereof shall immediately commence. The duties, rights, benefits and
other matters during the Severance Period shall be as set forth in Section 6(a),
and the Executive (and his or her heirs, beneficiaries and estate) shall be
entitled to all compensation, payments and benefits during the Severance

                                        6


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Period without any offset or reduction except by such amounts, if any, as are
paid to the Executive in lieu of compensation for services under any applicable
insurance policies of the Company (or by the Company under any self insurance
plan). For purposes of this Agreement, "Disabled" shall mean mental or physical
impairment or incapacity rendering the Executive substantially unable to perform
his duties under this Agreement for a period of longer than 180 days out of any
360-day period during the Employment Period. A determination of whether the
Executive is Disabled shall be made by the Company in its sole discretion upon
its own initiative or upon request of the Executive or a person acting on his
behalf. If the Executive becomes Disabled during a Severance Period, he or she
shall continue to receive the compensation, payments and benefits of this
Agreement during the entire Severance Period without any offset or reduction,
except by such amounts, if any, as are paid to the Executive in lieu of
compensation for services under any applicable insurance policies of the Company
(or by the Company under any self insurance plan).

     (d) Termination by the Company for Cause. The Company by written notice to
the Executive, shall have the right to terminate the Employment Period in the
event of any of the following (which shall constitute "Cause"):

          (i)  The Executive's breach in respect of his or her duties under this
               Agreement, such breach continuing unremedied for thirty days
               after written notice thereof from the Company to the Executive
               specifying the acts constituting the breach and requesting that
               they be remedied; or

          (ii) Any misconduct, dishonesty, insubordination or other act by the
               Executive materially detrimental to the goodwill of the Company,
               or materially damaging to the Company's, its subsidiaries' and/or
               affiliates' relationships with their customers or employees,
               including without limitation, the Executive having been convicted
               of a felony during the Employment Period, provided such
               conviction has resulted or is likely to result in substantial
               detriment to the Company, its subsidiaries and/or affiliates.

     Any termination under this Section 6(d) shall be without damages or
liability to the Company for compensation and other benefits which would have
accrued to the Executive hereunder after termination, but all compensation,
benefits and reimbursements accrued through the date of termination shall be
paid to the Executive at the times normally paid by the Company. In this event,
there shall be no Severance Period.

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     (e) Voluntary Termination by the Executive. In the event of voluntary
termination of employment by the Executive, the terms of the last paragraph of
Section 6(d) shall apply, except in the event that such voluntary termination
occurs within ninety days of (i) a relocation of the Company's offices (or the
location of the performance of work by the Executive) beyond a fifty mile radius
of New York City, (ii) a material diminution of the Executive's duties and
responsibilities as provided in Section 2, or (iii) a reduction in Base Salary
in which cases the provisions of Section 6(a) shall apply.

     (f) Termination Following a Change in Control.

     (i) For purposes of this paragraph (f), the term "Change in Control" shall
mean a Change in Control as defined in Section 3 of the OMI Corp. Separation
Allowance Program, as amended from time (the "Program") to time. Should the
Executive's employment hereunder be terminated by the Company without Cause
(other than for reason of the Executive becoming Disabled) within two years of a
Change in Control, the Company shall pay and the Executive shall receive in cash
an amount equal to three times the sum of the Executive's then current Base
Salary and the amount paid to the Executive pursuant to the exception in Section
3(b). The Executive shall also be eligible to receive any and all other benefits
as provided in the Program (excepting the severance benefits of Paragraph
5(iii)B of the Program). For purposes other than with respect to Paragraph
5(iii)B of the Program, wherever a Measuring Period (as defined in the Program)
is called for, the Measuring Period for the Executive shall be twenty four. Upon
termination under this paragraph (f), the Executive shall no longer be bound by
the provisions of Section 5 of this Agreement.

     (ii) In the event that any payment received or to be received by the
Executive in connection with a Change in Control or the termination of the
Executive's employment (whether payable pursuant to the terms of this Agreement
or any other plan, arrangement or agreement with the Company, any person whose
actions result in a Change in Control or any person affiliated with the Company
or such person (together with the payment pursuant to Section 6(f)(i), the
"Total Payments")) would not be deductible by the Company (in whole or in part)
as a result of Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), the payment pursuant to Section 6(f)(i) shall be reduced until no
portion or the Total Payments is not deductible as a result of Section 280G of
the Code, or the payment pursuant to Section 6(f)(i) is reduced to zero. For
purposes of this limitation (A) no portion of the Total Payments the receipt or
enjoyment of which the Executive shall have effectively waived in writing prior
to the date of payment of the payment pursuant to Section 6(f)(i) shall be taken
into account, (B) no portion of the Total Payments shall be taken into account
which, in the opinion of tax counsel selected by the Company's independent
auditors and acceptable to the Executive,

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does not constitute a "parachute payment" within the meaning of Section
280G(b)(2) of the Code, and (C) the value of any non-cash benefit or any
deferred payment or benefit included in the Total Payments shall be determined
or benefit included in the Total Payments shall be determined by the Company's
independent auditors servicing the Company immediately prior to the time of a
Change in Control in accordance with the principles of Sections 280G(d)(3) and
(4) of the Code.

     7. CONFLICTING AGREEMENTS
        ----------------------

     The Executive hereby represents and warrants to the Company that his
entering into this Agreement, and the obligations and duties undertaken by him
hereunder, will not conflict with, constitute a breach of, or otherwise violate
the terms of any other employment of other agreement to which he is a party.

     8. ASSIGNMENT
        ----------

     (a) By the Executive. This Agreement, any part thereof and any rights
(including compensation) or obligation hereunder shall not be assigned, pledged,
alienated, sold, attached, charged, encumbered or transferred in any way by the
Executive and any attempt to do so shall be void except that (i) the Executive
may designate any of his beneficiaries to receive (and such beneficiaries shall
receive) any compensation, payments or other benefits payable hereunder upon his
death, (ii) any assignment by will or by laws of descent and distribution or
following the occurrence of the Executive's legal incompetence is permitted and
(iii) the Executive's executors, administrators or other legal representatives
may assign any rights hereunder to the person or persons entitled thereto.

     (b) By the Company. Provided the substance of the Executive's duties set
forth in Section 2 shall not change, and provided that the Executive's
compensation as set forth in Section 3 shall not be adversely affected, the
Company may assign or otherwise transfer this Agreement to any succeeding entity
without limitation, which entity shall assume all rights and obligations
hereunder.

     9. NOTICES
        -------

     All notices, requests, demands and other communications hereunder must be
in writing and shall be deemed to have been duly given if delivered by hand or
mailed within the continental United States by first class, registered mail,
return receipt requested, or sent by overnight mail, such as Federal Express,
postage and registry fees prepaid, to the applicable party and addressed as
follows:

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         (a)  if to the Company:

              President
              OMI Corp.
              90 Park Avenue
              New York, New York  10016

         (b)  if to the Executive:

              47 East 87th Street
              New York, New York  10128

Addresses may be changed by notice in writing signed by the addressee.

     10. MISCELLANEOUS
         -------------

     (a) If any provision or portion of this Agreement shall, for any reason, be
adjudged by any court of competent jurisdiction to be invalid or unenforceable,
such judgment shall not affect, impair or invalidate the remainder of this
Agreement but shall be confined in its operation to the jurisdiction in which
made and to the provisions of this Agreement directly involved in the
controversy in which such judgment shall have been rendered.

     (b) No course of dealing and no delay on the part of any party hereto in
exercising any right, power or remedy under or relating to this Agreement shall
operate as a waiver thereof or otherwise prejudice such party's rights, powers
and remedies. No single or partial exercise of any rights, powers or remedies
under or relating to this Agreement shall preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.

     (c) This Agreement may be executed by the parties hereto in counterparts,
each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument, and all signatures need not
appear on any one counterpart.

     (d) (i) Any other agreement, rule or regulation to the contrary,
notwithstanding, the parties hereby agree that any action or proceeding relating
to this Agreement or its subject matter shall be brought in a state or federal
court situated in the County of New York, State of New York and such court shall
have exclusive jurisdiction thereof; provided, however, any court with
jurisdiction over the parties may, at the election of Company, have jurisdiction
over any action brought with regard to or any action brought to enforce any
violation or claimed violation of Section 5. The parties each hereby
specifically submit to the jurisdiction of such court and further agree that
service of process may be made within or without the State of New York by giving
notice in the

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manner provided in Section 9. Each party further agrees to waive and hereby
waives any right to a trial by jury, and to any objection it or he may have in
any such action, based on lack of personal jurisdiction or venue, or
inconvenient forum.

     (ii) In any such action or proceeding, the prevailing party shall be
entitled to recover from the other party reasonable costs, including attorney's
fees and expenses. In any action or proceeding before a court or other tribunal
relating to this Agreement with respect to which damages are an adequate remedy,
the parties agree that no damages other than compensatory damages shall be
sought or claimed by either party and each party waives any claim, right or
entitlement to punitive, exemplary, or consequential damages, or any statutory
damages, or any other damages of any kind or nature in excess of compensatory
damages, and any court or arbitration tribunal is specifically divested of any
power to award any damages in the nature of punitive, exemplary, or
consequential damages, or any statutory damages, or any other damages of any
kind or nature in excess of compensatory damages.

     (e) All payments required to be made by the Company hereunder to the
Executive or his beneficiaries, including his estate, shall be subject to
withholding and deductions as the Company may reasonably determine it should
withhold or deduct pursuant to any applicable law or regulation. In lieu of
withholding or deducting such amounts in whole or in part, the Company may, in
its sole discretion, accept other provision for payment as permitted by law,
provided it is satisfied in its sole discretion that all requirements of law
affecting its responsibilities to withhold such taxes have been satisfied.

     (f) This Agreement embodies the entire understanding, and supersedes all
other oral or written agreements or understandings, between the parties
regarding the subject matter hereof. No change, alteration or modification
hereof may be made except in writing signed by both parties hereto. The headings
in this Agreement are for convenience of reference only and shall not be
considered part of this Agreement or limit or otherwise affect the meaning
hereof. This Agreement and the rights and obligations of the parties hereunder
shall be construed in accordance with and governed by the laws of the State of
New York (disregarding any choice of law rules which might look to the laws of
any other jurisdiction).

     (g) The Executive acknowledges that the terms of this Agreement have been
fully explained to him or her, that the Executive understands the nature and
extent of the rights and obligations provided under this Agreement, and that the
Executive has been given the opportunity to be represented by legal counsel in
the negotiation and preparation of this Agreement.

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     (h) Nothing herein contained shall be construed to prevent or limit any
acquisition, consolidation or merger of the Company.

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

                                   By___________________________________________
                                        Robert Bugbee



                                   OMI CORP.

                                   By___________________________________________


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