1995 DEFERRED COMPENSATION PLAN OF
              APL LIMITED:  REGULAR DEFERRAL PLAN


     SECTION 1.     ESTABLISHMENT AND PURPOSE.

     The 1995 Deferred Compensation Plan was adopted by
the Board on December 9, 1994, effective as of January
1, 1995.  The 1995 Deferred Compensation Plan was
amended, effective November 9, 1996, to form two plans:
the 1995 Deferred Compensation Plan of APL Limited:
Pure Excess Deferral Plan (the "Pure Excess Deferral
Plan") and the 1995 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 Executives with an opportunity to defer a
portion of their salaries or their bonus awards under
the Company's year-end bonus plan for executives and
key employees.  The Plan is also intended to provide
High-Paid Employees with an opportunity to defer a
portion of their salaries in excess of the Compensation
Limit imposed by the Code on the SMART Plan.  The Plan
provides for matching contributions by the Company.  It
is expected that the Plan will assist the Company in
attracting and retaining employees of outstanding
achievement and ability.

     SECTION 2.     DEFINITIONS.

     (a)  "Base Salary" means the Eligible Employee's
annual base salary (as adjusted from time to time) plus
commissions, before reduction for deferrals pursuant to
this Plan, the SMART Plan, the American President
Companies, Ltd. FlexPlan or any other arrangement for
deferral established by the Company.

     (b)  "Beneficiary" means the person or persons
designated by the Eligible Employee in writing to
receive payment of any Deferral Account of the Eligible
Employee in the event of his or her death.  If no
designated Beneficiary survives the Eligible Employee,
the Eligible Employee's estate shall be the
Beneficiary.  If a designated Beneficiary survives the
Eligible Employee but dies before receiving payment of
all amounts due him or her, the remaining amounts shall
be paid to such Beneficiary's estate.  An Eligible
Employee 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 Eligible Employee.

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

     (d)  "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.

     (e)  "Change in Control" means the occurrence of
any of the following events:

          (i)  A change in control required to be
     reported pursuant to Item 6(e) of Schedule
     14A of Regulation 14A under the Securities
     Exchange Act of 1934, as amended;

          (ii)  A change in the composition of the
     Board, as a result of which fewer than two-
     thirds of the incumbent directors are
     directors who either (i) had been directors
     of the Company 24 months prior to such change
     or (ii) were elected, or nominated for
     election, to the Board with the affirmative
     votes of at least a majority of the directors
     who had been directors of the Company 24
     months prior to such change and who were
     still in office at the time of the election
     or nomination; or

          (iii)  Any "person" (as such term is
     used in sections 13(d) and 14(d) of such Act)
     is or becomes the beneficial owner, directly
     or indirectly, of securities of the Company
     representing 20 percent or more of the
     combined voting power of the Company's then
     outstanding securities ordinarily (and apart
     from rights accruing under special
     circumstances) having the right to vote at
     elections of directors (the "Base Capital
     Stock"); provided, however, that any change
     in the relative beneficial ownership of
     securities of any person resulting solely
     from a reduction in the aggregate number of
     outstanding shares of Base Capital Stock, and
     any decrease thereafter in such person's
     ownership of securities, shall be disregarded
     until such person increases in any manner,
     directly or indirectly, such person's
     beneficial ownership of any securities of the
     Company.

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

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

     (h)  "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.  For
1995 and 1996, such compensation limit is $150,000; for
1997 it is $160,000.

     (i)  "Company" means APL Limited, a Delaware
corporation.

     (j)  "Deferral Account" means an account
maintained on the books of account of the Company for
an Eligible Employee under the Plan.

     (k)  "Election Form" means an Eligible Employee's
written election to defer compensation under the Plan.
In the case of a High-Paid Employee, such election may
include a written election filed under the SMART Plan.

     (l)  "Eligible Employee" means an Executive or a
High-Paid Employee.

     (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(a), other than an executive or key
employee who has received a distribution under Section
8(c).

     (n)  "Financial Hardship" means an unanticipated
emergency caused by an event that is beyond the
Eligible Employee's control and that would result in
severe financial hardship to the Eligible Employee if
an early withdrawal were not permitted.

     (o)  "High-Paid Employee" means an employee of the
Company, or a subsidiary of the Company, whose Base
Salary since the beginning of the Year has exceeded the
Compensation Limit, other than an employee who has
received a distribution under Section 8(c).

     (p)  "In-Service Distribution" means a
distribution that occurs while the Eligible Employee
remains in employment with the Company or a subsidiary
of the Company, including (without limitation) a
distribution that occurs by reason of a Change in
Control.

     (q)  "Interest 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.

     (r)  "Plan" means this 1995 Deferred Compensation
Plan of APL Limited: Regular Deferral Plan, as amended
from time to time.

     (s)  "Pure Excess Deferral Plan" means the 1995
Deferred Compensation Plan of APL Limited: Pure Excess
Deferral Plan, as amended from time to time.

     (t)  "Post-Termination Distribution" means a
distribution that occurs after the Eligible Employee
has separated from employment with the Company or a
subsidiary of the Company for any reason.

     (u)  "Retirement" means a termination of
employment on or after the earlier of:

          (i)  The date when the Eligible Employee
     attains age 65; or

          (ii)  The earliest date when the Eligible
     Employee has both (A) attained age 55 and (B)
     completed five years of service with the Company
     and its subsidiaries, as determined by the
     Committee.

     (v)  "SMART Plan" means the APL Limited SMART
Plan, as amended from time to time.

     (w)  "Total and Permanent Disability" means that
the Eligible Employee 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.

     (x)  "Year" means a calendar year.

     SECTION 3.  ELIGIBILITY.

     (a)  Executives.  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.

     (b)  High-Paid Employees.  High-Paid Employees
automatically become eligible to participate in the
Plan when their Base Salary for the Year exceeds the
Compensation Limit for the Year.

     SECTION 4.     ELECTION TO PARTICIPATE IN PLAN.

     (a)  Deferral of Bonus Awards by Executives.  An
Executive may elect to participate in the Plan by
filing an Election Form for Bonus Awards with the
Company on or before December 20 of any Year.  Such
Election Form shall apply solely to the Bonus Award, if
any, to be paid during the next following Year.  The
Election Form shall specify the percentage or amount of
the Executive's Bonus Award, if any, to be deferred as
well as the time or times for payment of Post-
Termination Distributions and In-Service Distributions.

     (b)  Deferral of Base Salary by Executives.  An
Executive may also elect to participate in the Plan by
filing an Election Form for Base Salary with the
Company on or before December 20 of any Year.  Such
Election Form shall apply to Base Salaries paid during
subsequent Years.  The Election Form shall specify the
percentage or amount of the Executive's Base Salary to
be deferred as well as the time or times for payment of
Post-Termination Distributions 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.
An Executive may change his or her deferral percentage
(or reduce it to zero) or specify a different time or
times for payment of Post-Termination Distributions and
In-Service Distributions by filing a new Election Form
for Base Salary with the Company on or before December
20 of any Year.  The new Election Form shall apply to
Base Salaries paid during subsequent Years.

     (c)  New Executives.  In the case of an individual
who is newly designated as an Executive under
Section 3(a), the Election Forms described in
Subsections (a) and (b) above may be filed not later
than 30 days after the Committee's written notice of
eligibility was given.  The Election Forms shall apply
solely to the Bonus Award and Base Salaries paid after
such Election Forms are filed.

     (d)  High-Paid Employees.  A High-Paid Employee
who is not an Executive shall only be eligible to make
deferrals from his or her Base Salary (and not from
Bonus Awards).  A High-Paid Employee who is not already
participating as an Executive shall automatically
commence participating in the Plan when his or her Base
Salary for the Year equals the Compensation Limit for
the Year, but only if he or she has filed with the
Company an Election Form under the SMART Plan that
provides for participation in this Plan.  The High-Paid
Employee's initial deferral percentage under this Plan
shall be equal to the deferral percentage elected under
the SMART Plan, but in no event more than six percent
of Base Salary.  A High-Paid Employee may change his or
her deferral percentage (or reduce it to zero) by
filing a new Election Form with the Company.  The new
Election Form shall take effect as soon as reasonably
practicable after it has been filed.  In addition, a
High-Paid Employee who is not already participating as
an Executive shall file with the Company, not more than
30 days after participation commences, an Election Form
that specifies the time or times for payment of Post-
Termination Distributions and In-Service Distributions.
A High-Paid Employee may specify a different time or
times for payment of Post-Termination Distributions and
In-Service Distributions by filing a new Election Form
with the Company on or before December 20 of any Year.
The new Election Form shall apply to Base Salaries paid
during subsequent Years.

     (e)  Elections Irrevocable.  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
prior to 1996, 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)  Pure Excess Deferral Plan.  A portion of the
Base Salary 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
SMART Plan.  (For 1995 and 1996, such SMART Plan
maximum deferral percentage is 12%.)

     SECTION 5.     MATCHING CONTRIBUTIONS.

     (a)  Amount of Matching Contributions.  As of the
close of each calendar month, the Company shall credit
the Deferral Account of each Eligible Employee who is
eligible to receive matching contributions under the
SMART 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 "after-tax contributions" made by the Eligible
     Employee under the SMART Plan for the calendar
     month plus (B) the amount of Base Salary deferred
     by the Eligible Employee under Section 4 of this
     Plan for the calendar month, but only to the
     extent that such sum does not exceed six percent
     of the Eligible Employee's Base Salary for the
     calendar month; minus

          (ii)  The aggregate amount of the "matching
     contributions" allocated to the Eligible Employee
     under the SMART Plan for the calendar month.

The foregoing notwithstanding, a portion of the
matching contribution determined above shall be
credited under the Pure Excess Deferral 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 Deferral Plan, and not this Plan,
to the extent that such matching contribution relates
to deferrals from Base Salary in excess of the
Compensation Limit.

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

     (c)  Interest.  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.  DEFERRAL ACCOUNTS.

     (a)  Establishment of Deferral Accounts.  The
Company shall establish on its books one or more
Deferral Accounts for each Eligible Employee.

     (b)  Crediting of Bonus Awards.  The appropriate
Deferral Account of an Executive shall be credited with
an amount equal to that portion of each Bonus Award
which would have been payable to such Executive but for
the terms of his or her deferral election.  A Bonus
Award shall be credited to the 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.

     (c)  Crediting of Base Salaries.  The appropriate
Deferral Account of an Eligible Employee shall be
credited with an amount equal to that portion of each
Base Salary payment that would have been payable to
such Eligible Employee but for the terms of his or her
deferral election and that is deferred under this Plan
pursuant to Section 4 above.  Deferred Base Salary
shall be credited to the 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 was credited to the Deferral Account.

     SECTION 7.     INTEREST CREDITS AND DISTRIBUTION
EVENTS.

     (a)  Interest Rate.  Interest shall be credited
each month to all Deferral Accounts, commencing at the
times specified in Section 6, at the rate of 1/12th of
the Interest Rate.  Interest shall be compounded at the
end of each Year.

     (b)  Distributions Before Retirement.  If an
Eligible Employee separates from employment with the
Company and its subsidiaries for reasons other than
death or Retirement, then his or her Deferral Accounts
shall be paid in a lump sum on the first day of the
calendar quarter next following the date of termination
(without regard to the Eligible Employee's elections).

     (c)  Distributions After Retirement.  If an
Eligible Employee separates from employment with the
Company and its subsidiaries by reason of Retirement,
then his or her Deferral Accounts shall be paid in the
manner specified in his or her Election Forms.

     (d)  Death Before Retirement Eligibility.  If an
Eligible Employee dies before becoming eligible for
Retirement, then his or her Deferral Accounts shall be
paid to his or her Beneficiary in a lump sum on the
first day of the calendar quarter next following the
date of death.

     (e)  Death After Retirement Eligibility.  If an
Eligible Employee dies after becoming eligible for
Retirement, then his or her Deferral Accounts shall be
paid to his or her Beneficiary in the manner elected by
the Eligible Employee in his or her Election Forms.
The Committee, however, may determine in its sole
discretion that payments from one or more of the
Eligible Employee's Deferral Accounts shall be made at
an earlier date than the time or times specified in the
Eligible Employee's Election Forms.

     (f)  In-Service Distributions.  If an Eligible
Employee elected to receive an In-Service Distribution
on an Election Form, then the distribution shall be
made in accordance with such Election Form, except
that no distribution shall be made less than one year
after the election became effective.

     SECTION 8.     FORM AND TIME OF PAYMENT OF
ACCOUNTS.

     (a)  Form of Distributions.  Subject to Section 7,
payments from each Deferral Account shall be made only
in cash and shall consist of lump sums or annual or
quarterly installments, or a combination of lump sums
and annual or quarterly installments, as elected by the
Eligible Employee on the applicable Election Form.
Installments of Post-Termination Distributions shall be
paid on the first day of each calendar year or quarter.
Installments of Post-Termination Distributions 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 Interest Rate for the Year in
question for the remainder of all installment payments.

     (b)  Emergency Interim Distributions.  In the
event of an Eligible Employee's Total and Permanent
Disability or Financial Hardship, the Committee may
determine in its sole discretion that payments from one
or more of the Eligible Employee's Deferral Accounts
shall be made at an earlier date than the time or times
specified on the Eligible Employee's Election Forms.
Any amount distributed by reason of Financial Hardship
shall be limited to the amount necessary to relieve
such Financial Hardship.

     (c)  Other Interim Distributions.  Upon
application of an Eligible Employee, the Committee may
determine in its sole discretion that payments from one
or more of the Eligible Employee's Deferral Accounts
shall be made at an earlier date than the time or times
specified on the Eligible Employee'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 Eligible Employee 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 Eligible
Employee 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)  General Creditor.  Eligible Employees shall
have the status of general unsecured creditors of the
Company.  The Plan constitutes a mere promise by the
Company to make payments in the future.  It is the
Company's intention that the Plan be considered
unfunded for tax purposes and for purposes of Title I
of the Employee Retirement Income Security Act of 1974,
as amended.

     (b)  Bonus Awards.  Nothing in the Plan shall be
construed to give any Eligible Employee any right to be
granted a Bonus Award.

     (c)  Employment Agreement.  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 Eligible Employee 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 Chair of the Committee.  An
application for benefits shall be submitted on the
prescribed form and shall be signed by the Eligible
Employee 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 Chair 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 Chair 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 Chair 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 Chair of the
Committee.  The Chair 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 Chair 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
Chair 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.    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 the Interest Rate for the period
prior to the date of the amendment.

     SECTION 14.    CHOICE OF LAW.

     The validity, interpretation, construction and
performance of the Plan shall be governed by the
Employee Retirement Income Security Act of 1974, as
amended, and, to the extent they are not preempted, by
the laws of the State of California (other than their
choice-of-law provisions).

     SECTION 15.    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