1988 DEFERRED COMPENSATION PLAN OF
               APL LIMITED: REGULAR DEFERRAL PLAN

SECTION 1.     ESTABLISHMENT AND PURPOSE.

     The 1988 Deferred Compensation Plan was adopted by
the Board on November 29, 1988.  The 1988 Deferred
Compensation Plan was amended, effective November 9,
1996, to form two plans:  the 1988 Deferred
Compensation Plan of APL Limited: Pure Excess Deferral
Plan (the "Pure Excess Deferral Plan") and the 1988
Deferred Compensation Plan of APL Limited: Regular
Deferral Plan (the "Plan").  This document constitutes
an amendment and restatement of the prior version of
the Plan.  The Plan is intended to provide certain
Executives with an opportunity to defer payment of
their salaries or their bonus awards under the
Company's year-end bonus plan for executives and key
employees.  In addition, the Plan provides for matching
contributions by the Company.  It is expected that the
Plan will assist the Company in attracting and
retaining Executives of outstanding achievement and
ability.

SECTION 2.     DEFINITIONS.

     (a)  "Base Salary" means the Executive's annual
base salary, as adjusted from time to time, before
reduction for deferrals pursuant to this Plan, the
Thrift Plan, the Profit-Sharing Plan or any other
arrangement for deferral established by the Company.

     (b)  "Beneficiary" means the person or persons
designated by the Executive in writing to receive
payment of any Deferral Account of the Executive in the
event of his or her death.  If no designated
Beneficiary survives the Executive, the Executive's
estate shall be the Beneficiary.  If a designated
Beneficiary survives the Executive but dies before
receiving payment of all amounts due him or her, the
remaining amounts shall be paid to such Beneficiary's
estate.  An Executive may at any time elect to change
his or her Beneficiary designation.  Any such change
shall be in writing and shall be effective upon receipt
by the Company prior to the death of the Executive.

     (c)  "Benefit Unit" means a period of one or more
Years designated by the Committee under Section 4(a) as
a period for which Executives may file separate
Election Forms.

     (d)  "Board" means the Board of Directors of the
Company, as constituted from time to time.

     (e)  "Bonus Award" means the amount of
compensation paid by the Company to an Executive as a
bonus award under the Company's year-end bonus plan for
executives and key employees.

     (f)  "Code" means the Internal Revenue Code of
1986, as amended.

     (g)  "Committee" means the Compensation Committee
of the Board.

     (h)  "Company" means American President Companies,
Ltd., a Delaware corporation.

     (i)  "Compensation Limit" means the compensation
limit described in section 401(a)(17) of the Code, as
it may be revised or adjusted from time to time.

     (j)  "Deferral Account" means the account
maintained on the books of account of the Company for
each Benefit Unit for which an Election Form was filed
by the Executive.

     (k)  "Early Retirement Date" means the later of
the date when the Executive (i) attains age 55 or (ii)
completes five years of service with the Company, as
determined by the Committee.

     (l)  "Election Form" means an Executive's written
election to defer compensation under the Plan during a
Benefit Unit.

     (m)  "Executive" means an executive or key
employee of the Company, or a subsidiary of the
Company, who is eligible to participate in the Plan
under Section 3.

     (n)  "Financial Hardship" means an unusual expense
or indebtedness that imposes an extraordinary or
unexpected financial burden upon the Executive, the
amount of which is not reasonably available from other
resources of the Executive.

     (o)  "In-Service Distribution" means a
distribution that occurs while the Executive remains in
employment with the Company or a subsidiary of the
Company.

     (p)  "Plan" means this 1988 Deferred Compensation
Plan of APL Limited: Regular Deferral Plan, as amended
from time to time.

     (q)  "Profit-Sharing Plan" means the American
President Profit-Sharing Plan, as amended from time to
time.

     (r)  "Pure Excess Deferral Plan" means the 1988
Deferred Compensation Plan of APL Limited: Pure Excess
Deferral Plan, as amended from time to time.

     (s)  "Retirement" means any termination of
employment on or after the Executive reaches his or her
(i) Early Retirement Date or (ii) Retirement Date.

     (t)  "Retirement Benefit" means the benefit
payable to an Executive after Retirement.

     (u)  "Retirement Date" means the date when the
Executive attains age 65.

     (v)  "Retirement Rate" means the 120-month rolling
average yield for 10-year United States Treasury Notes,
determined for each Year as of the December 1 that
precedes such Year.  Notwithstanding the terms of the
previous sentence, the Retirement Rate for 1989 shall
be 10.66%.

     (w)  "Termination Benefit" means the lump sum
amount payable to an Executive who separates from
service with the Company and its subsidiaries before
Retirement.

     (x)  "Termination Rate" means 90% of the
Retirement Rate for the Year in question.  The
termination rate for 1989 shall be 9.59%.

     (y)  "Thrift Plan" means the American President
Companies, Ltd. Profit-Sharing Thrift Plan for Salaried
Shoreside Employees, as amended from time to time.

     (z)  "Total and Permanent Disability" means that
the Executive is unable to engage in any substantial
gainful activity by reason of any medically
determinable physical or mental impairment that can be
expected to result in death or that has lasted, or can
be expected to last, for a continuous period of not
less than 12 months.

     (aa) "Year" means a calendar year.

SECTION 3.  ELIGIBILITY.

     The Committee, acting upon the advice of the Chief
Executive Officer of the Company or upon its own
motion, shall determine which executives and key
employees will be eligible to participate in the Plan
as Executives.  The Committee shall notify an
individual in writing when he or she is first
designated as an Executive for purposes of the Plan.

SECTION 4.     ELECTION TO PARTICIPATE IN PLAN.

     (a)  Not less than 30 days before the beginning of
each Year, the Committee shall designate the Benefit
Unit or Benefit Units that begin with such Year.

     (b)  An Executive may elect to participate in the
Plan for a Benefit Unit by filing an Election Form for
Bonus Awards with the Company on or before the December
15 preceding the start of such Benefit Unit (on or
before December 30, 1988, in the case of Benefit Units
commencing on January 1, 1989).  Such Election Form
shall apply to the Bonus Awards, if any, to be paid
during the Benefit Unit.  The Election Form shall
specify the percentage or amount of the Executive's
Bonus Awards, if any, to be deferred during the Benefit
Unit as well as the time or times for payment of
Retirement Benefits and In-Service Distributions.

     (c)  An Executive may also elect to participate in
the Plan for a Benefit Unit by filing an Election Form
for Base Salary with the Company on or before the
December 15 preceding the start of such Benefit Unit.
Such Election Form shall apply to all Base Salaries to
be paid during the Benefit Unit.  The Election Form
shall specify the percentage or amount of the
Executive's Base Salary to be deferred during the
Benefit Unit as well as the time or times for payment
of Retirement Benefits and In-Service Distributions.
In no event, however, shall an Executive defer more
than 88 percent of his or her Base Salary up to the
Compensation Limit, and 100 percent of his or her Base
Salary above the Compensation Limit.

     (d)  In the case of an individual who is newly
designated as an Executive under Section 3, the
Election Forms described in Subsections (b) and (c)
above may be filed for any Benefit Unit then in
progress not later than 30 days after the Committee's
written notice of eligibility was given.

     (e)  Except as otherwise expressly provided in the
Plan, all elections shall be irrevocable upon filing
with the Company on Election Forms.  The foregoing
notwithstanding, elections of the time or times for
payment filed under this Section 4, and not requiring
payment before 1997, may be modified by filing a new
Election Form on or before December 20, 1996 that
requires payment no earlier than January 1, 1997, which
modified election shall be irrevocable upon filing of
the Election Form with the Company.

     (f)  A portion of the Base Salaries deferred
pursuant to the provisions of the preceding Subsections
of this Section 4 shall be deemed made under the Pure
Excess Deferral Plan and shall not be part of the
Eligible Employee's benefit under this Plan.  Deferrals
shall be deemed made under the Pure Excess Deferral
Plan, and not this Plan, to the extent that such
deferrals come from Base Salary in excess of the
Compensation Limit but not in excess of the maximum
deferral percentage permitted under the terms of the
Profit-Sharing Plan or Thrift Plan (as applicable).

     (g)  Any other provision of the Plan
notwithstanding, the Committee, at its sole discretion,
may (i) reduce the level of deferral elections or (ii)
decline altogether to accept an Executive's deferral
election.

SECTION 5.     MATCHING CONTRIBUTIONS.

     (a)  As of the close of each calendar month, the
Company shall credit the Deferral Account of each
Executive who is eligible to receive matching
contributions under the Thrift Plan or the
Profit-Sharing Plan with a matching contribution under
this Plan.  The amount of the matching contribution
under this Plan shall be equal to:

          (i)  The sum of (A) the "salary deferrals"
     and "basic contributions" made by the Executive
     under the Thrift Plan for the calendar month plus
     (B) the "salary deferrals" and "basic employee
     contributions" made by the Executive under the
     Profit-Sharing Plan for the calendar month plus
     (C) the amount of Base Salary deferred by the
     Executive under Section 4(c) of this Plan for the
     calendar month, but only to the extent that such
     sum does not exceed six percent of the Executive's
     Base Salary for the calendar month; minus

          (ii)  The aggregate amount of the "matching
     contributions" allocated to the Executive under
     the Thrift Plan or the Profit-Sharing Plan for the
     calendar month.

     (b)  As of the close of each calendar year, the
Company shall deduct from each Executive's Deferral
Account an amount equal to the "basic contributions"
and "discretionary contributions" allocated to him or
her under the Profit-Sharing Plan for such year.

     (c)  The foregoing Subsections (a) and (b)
notwithstanding, a portion of the matching contribution
determined in Subsection (a) above shall be credited
under the Pure Excess Plan and shall not be part of the
Eligible Employee's benefit under this Plan.  The
matching contribution shall be credited under the Pure
Excess Plan, and not this Plan, to the extent that such
matching contribution relates to deferrals from Base
Salary in excess of the Compensation Limit.

     (d)  Subsection (a) above notwithstanding,
matching contributions credited in lieu of
contributions under the Thrift Plan (and the interest
credited thereon) shall be distributed to the Executive
only to the extent that such matching contributions
(and interest) would be vested under the Thrift Plan.
The balance, if any, of such matching contributions
(and interest) shall be forfeited upon the termination
of the Executive's employment.

     (e)  Interest credits on any matching contribution
shall commence as of the day next following the close
of the calendar month to which such contribution
relates.

SECTION 6.  ESTABLISHMENT OF DEFERRAL ACCOUNTS.

     (a)  In the event a Bonus Award is made to an
Executive who has duly filed an Election Form with
respect to Bonus Awards to be paid during a Benefit
Unit and for whom no Deferral Account has been
established for such Benefit Unit, the Company shall
establish a Deferral Account for the Executive for such
Benefit Unit.  The Deferral Account for a Benefit Unit
shall be credited with an amount equal to that portion
of each Bonus Award that would have been payable to the
Executive during such Benefit Unit but for the terms of
the deferral election.  A Bonus Award shall be credited
to the Executive's Deferral Account as of the first day
of the month next following the date of such Bonus
Award, and interest credits on such Bonus Award shall
commence as of such day.

     (b)  In the case of an Executive who has duly
filed an Election Form with respect to Base Salaries to
be paid during a Benefit Unit and for whom no Deferral
Account has been established for such Benefit Unit, the
Company shall establish a Deferral Account for the
Executive for such Benefit Unit.  The Deferral Account
for a Benefit Unit shall be credited with an amount
equal to that portion of each Base Salary payment that
would have been payable to the Executive during such
Benefit Unit but for the terms of the deferral election
and that is deferred under this Plan pursuant to
Section 4 above.  Deferred Base Salary shall be
credited to the Executive's Deferral Account as of the
pay date for the deferred Base Salary.  Interest
credits on deferred Base Salary shall commence as of
the day next following the close of the month in which
such deferred Base Salary is credited to the Deferral
Account.

SECTION 7.     INTEREST CREDITS AND DISTRIBUTION
EVENTS.

     (a)  Interest shall be credited to all Deferral
Accounts, commencing at the times specified above, at
the rate of 1/12th of the applicable rate each month
and shall be compounded at the end of each Year.

     (b)  If an Executive separates from employment
with the Company and its subsidiaries for reasons other
than death, Total and Permanent Disability or
Retirement, interest on his or her Deferral Accounts
shall be credited at the Termination Rate and, any
elections the Executive may have made with respect to
the timing of the payout of his or her Deferral
Accounts notwithstanding, such Deferral Accounts shall
be paid in a lump sum on the first day of the calendar
quarter next following the date of termination.

     (c)  If an Executive separates from employment
with the Company and its subsidiaries by reason of
Retirement, interest on his or her Deferral Accounts
shall be credited at the Retirement Rate and such
Deferral Accounts shall be paid in the manner specified
by the Executive in his or her Election Forms.

     (d)  If an Executive suffers a Total and Permanent
Disability prior to Retirement, deferrals and matching
contributions shall continue to be credited to the
Executive's Deferral Accounts as long as Base Salary or
Bonus Award payments are continued during the period of
Total and Permanent Disability in accordance with any
Election Form executed prior to the onset of the Total
and Permanent Disability.  When long-term disability
benefits commence, the disabled Executive's Deferral
Accounts shall be paid over a five-year period on a
quarterly basis, commencing on the first day of the
calendar quarter coinciding with or next following
commencement of long-term disability benefits.
Interest on the Deferral Accounts of a disabled
Executive shall be credited at the Retirement Rate.

     (e)  If an Executive dies prior to his or her
Early Retirement Date and Retirement Date, interest on
the deceased Executive's Deferral Accounts shall be
credited at the Retirement Rate.  Such Deferral
Accounts shall be paid to the Executive's Beneficiary
in a lump sum on the first day of the calendar quarter
next following the date of death.

     (f)  If an Executive dies after his or her Early
Retirement Date or Retirement Date but prior to
Retirement, the deceased Executive's Deferral Accounts
shall be credited with interest at the Retirement Rate
and shall be paid to the Executive's Beneficiary in the
manner elected by the Executive, as if the Executive
had retired on the date of his or her death.

     (g)  If an Executive dies after Retirement
Benefits have commenced, the previously unpaid benefits
shall continue to be paid as scheduled.

     (h)  If an Executive elects to receive an In-
Service Distribution on his or her Election Form, such
distribution shall be made in accordance with the
Executive's Election Form; provided, however, that (i)
no distribution shall be made less than one year after
commencement of the Benefit Unit to which the
In-Service Distribution election applies and (ii) the
total amount distributed shall not exceed the value of
the Deferral Account for the Benefit Unit to which the
In-Service Distribution election relates, including
interest credited thereto.  For purposes of the
previous sentence, interest shall be credited at the
Termination Rate for In-Service Distributions made
prior to an Executive's Early Retirement Date and
Retirement Date and at the Retirement Rate for
In-Service Distributions made after an Executive's
Early Retirement Date or Retirement Date.  If an
Executive received an In-Service Distribution to which
interest was credited at the Termination Rate and
subsequently becomes entitled to have interest credited
to his or her Deferral Accounts at the Retirement Rate,
then the Executive's Deferral Accounts shall be
recalculated by crediting interest on all amounts
received as an In-Service Distribution at the
Retirement Rate up to the time of the In-Service
Distribution.  Any resulting increase in the value of
the Executive's Deferral Accounts as of the date of the
In-Service Distribution shall be credited with interest
at the Retirement Rate for the period from the date of
the In-Service Distribution to the date when the
Deferral Accounts are distributed.

SECTION 8.     FORM AND TIME OF PAYMENT OF ACCOUNTS.

     (a)  Subject to Section 7, payments from each
Deferral Account shall be made only in cash and shall
consist of lump sums or quarterly installments, or a
combination of lump sums and quarterly installments, as
elected by the Executive in the applicable Election
Form.  Installments of Retirement Benefits shall be
paid on the first day of each calendar quarter.
Installments of Retirement Benefits shall not be paid
over a period exceeding 15 years.  The amount of the
installments shall be redetermined each Year by
assuming that interest will be credited on the unpaid
balance at the Retirement Rate for the Year in question
for the remainder of all installment payments.

     (b)  In the event of an Executive's Total and
Permanent Disability or Financial Hardship, the
Committee may determine in its sole discretion that
payments from one or more of the Executive's Deferral
Accounts shall be made at an earlier date than the time
or times specified on the Executive's Election Forms.

     (c)  Upon application of an Executive, the
Committee may determine in its sole discretion that
payments from one or more of the Executive's Deferral
Accounts shall be made at an earlier date than the time
or times specified on the Executive's Election Forms
(even in the absence of a Total and Permanent
Disability or Financial Hardship).  All distributions
under this Subsection (c) shall be reduced by a penalty
equal to six percent of the amount otherwise
distributable, which penalty shall be forfeited to the
Company.  An Executive who has received a distribution
under this Subsection (c) thereafter shall not make
additional deferrals under the Plan or under the Pure
Excess Deferral Plan.

SECTION 9.     NONASSIGNABILITY OF INTERESTS.

     The interest and property rights of any Executive
under the Plan shall not be subject to option nor be
assignable either by voluntary or involuntary
assignment or by operation of law, including (without
limitation) bankruptcy, garnishment, attachment or
other creditor's process, and any act in violation of
this Section 9 shall be void.

SECTION 10.    LIMITATION OF RIGHTS.

     (a)  Nothing in the Plan shall be construed to
give any Executive any right to be granted a Bonus
Award.

     (b)  Neither the Plan nor the deferral of any Base
Salary or Bonus Award, nor any other action taken
pursuant to the Plan, shall constitute or be evidence
of any agreement or understanding, express or implied,
that the Company or a subsidiary will employ an
Executive for any period of time, in any position or at
any particular rate of compensation.

SECTION 11.    ADMINISTRATION OF THE PLAN.

     The Plan shall be administered by the Committee.
The Committee shall have full power and authority to
administer and interpret the Plan, to establish
procedures for administering the Plan and to take any
and all necessary actions in connection therewith.  The
Committee's interpretation and construction of the Plan
shall be conclusive and binding on all persons.

SECTION 12.    CLAIMS AND INQUIRIES.

     (a)  Application for Benefits.  Applications for
benefits and inquiries concerning the Plan (or
concerning present or future rights to benefits under
the Plan) shall be submitted to the Company in writing
and addressed to the Chairman of the Committee.  An
application for benefits shall be submitted on the
prescribed form and shall be signed by the Executive
or, in the case of a benefit payable after his or her
death, by the Beneficiary.

     (b)  Denial of Application.  In the event that an
application for benefits is denied in whole or in part,
the Chairman of the Committee shall notify the
applicant in writing of the denial and of the right to
a review of the denial.  The written notice shall set
forth, in a manner calculated to be understood by the
applicant, specific reasons for the denial, specific
references to the provisions of the Plan on which the
denial is based, a description of any information or
material necessary for the applicant to perfect the
application, an explanation of why the material is
necessary, and an explanation of the review procedure
under the Plan.  The written notice shall be given to
the applicant within a reasonable period of time (not
more than 90 days) after the Chairman of the Committee
received the application, unless special circumstances
require further time for processing and the applicant
is advised of the extension.  In no event shall the
notice be given more than 180 days after the Chairman
of the Committee received the application.

     (c)  Review Panel.  The Committee shall serve as
the "Review Panel" under the Plan.  The Review Panel
shall have the authority to act with respect to any
appeal from a denial of benefits or a determination of
benefit rights.

     (d)  Request for Review.  An applicant whose
application for benefits was denied in whole or in
part, or the applicant's duly authorized
representative, may appeal from the denial by
submitting to the Review Panel a request for a review
of the application within 90 days after receiving
written notice of the denial from the Chairman of the
Committee.  The Chairman of the Committee shall give
the applicant or his or her representative an
opportunity to review pertinent materials, other than
legally privileged documents, in preparing the request
for a review.  The request for a review shall be in
writing and addressed to the Committee.  The request
for a review shall set forth all of the grounds on
which it is based, all facts in support of the request,
and any other matters that the applicant deems
pertinent.  The Review Panel may require the applicant
to submit such additional facts, documents or other
material as it may deem necessary or appropriate in
making its review.

     (e)  Decision on Review.  The Review Panel shall
act on each request for a review within 60 days after
receipt, unless special circumstances require further
time for processing and the applicant is advised of the
extension.  In no event shall the decision on review be
rendered more than 120 days after the Review Panel
received the request for a review.  The Review Panel
shall give prompt written notice of its decision to the
applicant.  In the event that the Review Panel confirms
the denial of the application for benefits in whole or
in part, the notice shall set forth, in a manner
calculated to be understood by the applicant, the
specific reasons for the decision and specific
references to the provisions of the Plan on which the
decision is based.

     (f)  Rules and Interpretations.  The Review Panel
shall adopt such rules, procedures and interpretations
of the Plan as it deems necessary or appropriate in
carrying out its responsibilities under this Section
12.

     (g)  Exhaustion of Remedies.  No legal action for
benefits under the Plan shall be brought unless and
until the claimant (i) has submitted a written
application for benefits in accordance with Subsection
(a) above, (ii) has been notified by the Chairman of
the Committee that the application is denied, (iii) has
filed a written request for a review of the application
in accordance with Subsection (d) above and (iv) has
been notified in writing that the Review Panel has
affirmed the denial of the application; provided,
however, that legal action may be brought after the
Chairman of the Committee or the Review Panel has
failed to take any action on the claim within the time
prescribed by Subsections (b) and (e) above,
respectively.

SECTION 13.    MISCELLANEOUS PROVISIONS.

     (a)  An Executive who has agreed to defer a stated
portion of Base Salaries or Bonus Awards over more than
one Year in a Benefit Unit on a valid Election Form may
accelerate the elected deferrals by a separate
election.  The duration of such Benefit Unit shall be
reduced accordingly.  Any acceleration of deferrals
shall be made prior to the commencement of the Year in
which the deferred compensation to be accelerated
otherwise would be paid.

     (b)  The minimum annual deferral of Base Salary
and Bonus Awards shall be $2,000.

     (c)  Any other provision of the Plan
notwithstanding, if an Executive's Deferral Account
after commencement of Retirement Benefits is reduced in
value to $50,000 or less, or if a Deferral Account
established for a Beneficiary becomes worth $50,000 or
less, the Committee may elect to make a lump sum
distribution of any such Deferral Account.

SECTION 14.    AMENDMENT OR TERMINATION OF THE PLAN.

     The Board may amend, suspend or terminate the Plan
at any time, except that no amendment shall
retroactively change either the Termination Rate or the
Retirement Rate for the period prior to the date of the
amendment.

SECTION 15.    CHOICE OF LAW.

     The validity, interpretation, construction and
performance of the Plan shall be governed by the
Employee Retirement Income Security Act of 1974 and, to
the extent they are not preempted, by the laws of the
State of California.

SECTION 16.    EXECUTION.

     To record the amendment and restatement of the
Plan, the Company has caused its duly authorized
officer to affix the corporate name hereto.

                                  APL LIMITED
                                  
                                  
                                  By: /s/Timothy J. Windle
                                  
                                  Its:  Assistant Secretary