OMI CORPORATION SAVINGS PLAN
                      (Amended and restated effective as of
                                January 1, 2001,
                       with certain other effective dates)


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                               SECTION 1. PURPOSE

          1.1 The  purpose  of the OMI  Corporation  Savings  Plan is to provide
Eligible  Employees  with a  convenient  way to save on a regular  and long term
basis,  all as set forth  herein  and in the Trust  Agreement.  The Plan and the
Trust established hereunder, which were originally effective as of July 1, 1993,
are  intended  to qualify as a plan and a trust which meet the  requirements  of
Sections  401(a),  401(k)  and  501(a),  respectively,  of the Code or any other
applicable provisions of law including,  without limitation,  the Act. Effective
as of January 1, 1997, with certain other effective  dates, the Plan was amended
and  restated in its  entirety to comply  with the  requirements  of the Uruguay
Round Agreements Act, the Uniformed Services  Employment and Reemployment Act of
1994, the Small Business Job Protection Act of 1996, the Taxpayer  Relief Act of
1997, the Internal  Revenue  Service  Restructuring  and Reform Act of 1998, and
guidance promulgated  thereunder.  Effective as of January 1, 2001, with certain
other effective  dates,  the Plan is hereby amended and restated in its entirety
to  conform to the  requirements  of  additional  guidance  with  respect to the
foregoing legislation issued since the previous  restatement,  to conform to the
requirements  of the  Community  Renewal Tax Relief Act of 2000,  to add the OMI
Corporation Stock Fund to the Plan, and to effect certain other desired changes.

          1.2 The rights of any person (including such person's Beneficiary,  if
any) who terminated employment or who retired on or before the effective date of
a particular Plan amendment, including his eligibility for benefits and the time
and form in which  benefits,  if any, will be paid,  shall be determined  solely
under  the  terms of the Plan as in  effect  on the date of his  termination  of
employment or retirement,  unless such person is thereafter reemployed and again
becomes a Participant of the Plan.


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          1.3  Effective  for Plan Years  beginning on or after January 1, 1999,
Employer  Contributions  made pursuant to Section 5.1(a) are intended to be used
to satisfy the "safe harbor"  requirements of Sections 401(k)(12) and 401(m)(11)
of the Code with respect to nondiscrimination testing.


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                             SECTION 2. DEFINITIONS

          When  used  herein  the  following  terms  shall  have  the  following
meanings:

          2.1 "Account" or "Participant's Account" means the account established
and  maintained  on behalf of a Participant  pursuant to Section 3.4,  including
such  Participant's   Employer  Contribution  Account,   Compensation  Reduction
Contribution Account, Rollover Contribution Account and ESOP Account.

          2.2 "Act" means the Employee  Retirement  Income Security Act of 1974,
as now in effect or as hereafter  amended.  All citations to sections of the Act
are to such sections as they may from time to time be amended or renumbered.

          2.3 "Administrative Committee" or "Committee" means the Administrative
Committee of OMI  Corporation as provided for in Section 12. For purposes of the
Act, the Administrative Committee shall be the administrator of the Plan and its
members  shall be named  fiduciaries  with respect to matters for which they are
responsible under the Plan.

          2.4 "Affiliate"  means any corporation  (other than the Company) which
is included in a controlled group of corporations (within the meaning of Section
414(b) of the Code) which includes the Company,  any trade or business  (whether
or not incorporated)  which is under common control with the Company (within the
meaning of Section 414(c) of the Code),  any  organization  included in the same
affiliated  service group (within the meaning of Section  414(m) of the Code) as
the Company,  and any other entity  required to be  aggregated  with the Company
pursuant to the IRS Regulations  issued under Section 414(o) of the Code; except
that for purposes of applying the  provisions  of Section 16 and 17 with respect
to limitations on contributions, Section 415(h) of the Code shall apply.


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          2.5 "Beneficiary" means the beneficiary or beneficiaries designated by
a  Participant  pursuant to Section 11 to receive the  amount,  if any,  payable
under the Plan upon the death of such Participant.

          2.6  "Board  of  Directors"  means  the  Board  of  Directors  of  OMI
Corporation

          2.7 "Break in Service"  means a Plan Year during which an Employee has
not been  credited  with more than 500 Hours of Service,  as  determined  by the
Administrative Committee in accordance with the Regulations. Solely for purposes
of  determining  whether a Break in Service has occurred,  an Employee  shall be
credited with the Hours of Service which such Employee  would have completed but
for the pregnancy of the Employee, the placement of a child with the Employee in
connection with the adoption of such child by such Employee,  or for purposes of
caring for such child for a period beginning immediately following such birth or
placement  in  accordance  with  this  Section  2.7  and  the  Labor  Department
Regulations.  In the event the number of Hours of Service which  otherwise would
have been credited to such Employee but for such absence  cannot be  determined,
then the  Employee  shall  receive  credit for eight Hours of Service per day of
such  absence;  provided,  however,  that the total Hours of Service so credited
shall not exceed 501 Hours of  Service.  Hours of Service  credited by reason of
any pregnancy or placement hereunder shall be credited entirely in the Plan Year
in which the absence  began if such Hours of Service are  necessary to prevent a
Break in Service in such Plan Year, or otherwise in the following  Plan Year. In
order to receive  credit for Hours of Service  hereunder,  the  Employee  may be
required to furnish to the  Administrative  Committee  a  statement  from a duly
licensed  physician that the leave was taken by reason of the birth of the child
and specifying the length of absence recommended by the physician.  In the event
of the adoption of a


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child or the care of a child  after the birth or  adoption  of such  child,  the
Administrative Committee may require such proof as it deems necessary to certify
the reason for the absence.

          2.8 "Code" means the Internal  Revenue Code of 1986,  as now in effect
or as  hereafter  amended.  All  citations  to  sections of the Code are to such
sections as they may from time to time be amended or renumbered.

          2.9 "Company" means OMI Corporation, a Marshall Islands corporation.

          2.10  "Compensation"  means for each Plan Year  beginning  on or after
January 1, 1994, an Employee's  first $150,000 (as adjusted by the  Commissioner
of the IRS for  increases  in the cost of  living  in  accordance  with  Section
401(a)(17)(B)  of the Code) (the "annual  compensation  limit") of  remuneration
paid or payable for Service while an Employee and a Participant,  without giving
effect to any reduction  therein pursuant to such  Participant's  election under
Section 4.1(a) and/or under Code Sections 125 or 132(f).  Compensation  does not
include any (i)  compensation  deferrals  other than  deferrals made pursuant to
Section 4.1(a) and/or amounts contributed pursuant to Code Section 125 or 132(f)
arrangements,  (ii)  deferred  compensation  paid to  Employees,  or (iii) other
amounts  of  extra   compensation  that  are  excludable  under  IRS  Regulation
1.414(s)-1(d)(2)(ii), including, without limitation, severance payments. If less
than a full Plan Year of  Compensation  is taken into  account,  then the annual
compensation  limit shall be  multiplied  by the ratio  obtained by dividing the
number of full months in the period by 12. In determining the  Compensation of a
Participant  prior to January 1, 1997,  for purposes of the annual  compensation
limit,  the rules of Section 414(q) of the Code as in effect prior to January 1,
1997 shall apply,  except that in applying such rules,  the term "family member"
referred  to in  such  Code  Section  shall  include  only  the  spouse  of  the
Participant  and any lineal  descendants who have not attained age 19 before the
close of the Plan Year. If, as a

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result of the application of such rules, the adjusted annual  compensation limit
is exceeded,  then the limit shall be prorated among the affected individuals in
proportion  to each such  individual's  Compensation  as  determined  under this
Section 2.10 prior to the application of the annual compensation limit.

          2.11  "Compensation   Reduction   Contributions  "  and  "Compensation
Reduction  Contribution  Account" means those contributions made by the Employer
on behalf of a  Participant  in  accordance  with  such  Participant's  election
pursuant  to Section  4.1(a) and that  portion of the  Participant's  Account to
which such contributions are credited.

          2.12  "Direct  Rollover"  means (i) a  distribution  by the Plan to an
Eligible  Retirement  Plan as specified by a  Distributee  and (ii) a payment by
another  employee  retirement  plan to the Plan as a  Rollover  Contribution  as
specified by an Eligible Employee.

          2.13  "Disability"  means the  Participant's  inability to perform the
duties of employment with the Employer as would constitute  disability under the
OMI Corporation Long Term Disability Program.

          2.14  "Distributee"  means a Participant  or a former  Participant.  A
Participant's or former  Participant's  Surviving Spouse or a former spouse of a
Participant or former  Participant  who is an alternate  payee under a Qualified
Domestic  Relations  Order to which a distribution  is to be made under the Plan
shall also be deemed to be a Distributee.

          2.15  "Eligible  Employee"  means  any  Employee,  excluding  (i)  any
nonresident  alien,  (ii) any  Employee  who is included in a unit of  Employees
covered by a  collective  bargaining  agreement  which does not  provide for his
participation in the Plan, (iii) any Employee not paid on a salaried basis, (iv)
any leased  employee,  and (v) any other  person who  performs  services for the
Employer under an agreement or arrangement (which may be written, oral and/or

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evidenced by the payroll  practice of the Employer)  with the individual or with
another  organization  that  provides  the  services  of the  individual  to the
Employer,  pursuant to which the person is treated as an independent  contractor
or is  otherwise  treated as an employee of an entity  other than the  Employer,
irrespective  of whether the person is treated as an  Employee  of the  Employer
under common law employment  principles or pursuant to the provisions of Section
414(b), (c), (m) and (o) of the Code. A director of the Employer is not eligible
to  participate  in the Plan  unless he is also an  Eligible  Employee.  For all
purposes of the Plan, a "leased  employee" means (1) any individual  (other than
an Employee) who provides services pursuant to an agreement between the Employer
and any other person ("leasing organization"), (2) such individual performs such
services for the Employer on a substantially  full time basis for a period of at
least one year, and (3) such services are performed under the primary  direction
or control of the Employer.

          2.16  "Eligible  Retirement  Plan" means (i) an individual  retirement
account,  as  described  in  Section  408(a)  of the  Code,  (ii) an  individual
retirement annuity, as described in Section 408(b) of the Code, (iii) an annuity
plan, as described in Section  403(a) of the Code, and (iv) a qualified plan and
trust,  as  described  in  Sections  401(a)  and  501(a) of the Code;  provided,
however,  that in the case of an Eligible  Rollover  Distribution to a Surviving
Spouse, an Eligible Retirement Plan means an individual retirement account or an
individual retirement annuity, as described in Sections 408(a) and 408(b) of the
Code, respectively.

          2.17 "Eligible Rollover  Distribution" means any distribution from the
Plan of all or any portion of the balance to the credit of a Distributee, except
that an Eligible Rollover Distribution shall not include any distribution to the
extent such distribution is required under Section 10.2 and Section 401(a)(9) of
the Code.


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          2.18 "Employee" means an individual in the employ of the Employer. The
term "Employee"  shall not include any person who is performing  services for an
Employer  pursuant to an  agreement,  contract or  arrangement  under which said
individual  is  designated,   characterized  or  classified  as  an  independent
contractor,  consultant or any category or classification other than an employee
without  regard to  whether  any  determination  by an agency,  governmental  or
otherwise,  or court concludes that such classification or characterization  was
in error.

          2.19  "Employer"  means  the  Company  and  each  other  Participating
Company,  or any of them.  For all  periods  of time  prior  to June  17,  1998,
Employer also includes OMI Corp., a Delaware corporation.

          2.20 "Employer Contributions" and "Employer Contribution Account" mean
those Employer  Contributions  made pursuant to Sections 5.1(a) and (b) and that
portion of the Participant's Account to which such contributions are credited.

          2.21 "ESOP Account" shall mean those shares of OMI Corp.  common stock
allocated  as of March  31,  1996,  to such  account  pursuant  to the OMI Corp.
Employee  Stock  Ownership Plan (or any shares of Marine  Transport  Corporation
common stock or the common stock of the Company  attributable  to such shares of
OMI Corp.  common stock),  and as sold from time to time by the Trustee upon the
direction of the Participant.

          2.22 "Highly Compensated Employee" or "Highly Compensated Participant"
means an Employee or Participant  who performs  Service for the Employer and who
is (a) a 5% owner (as  defined  in  Section  416(i)(1)  of the Code) at any time
during the current year or the  immediately  preceding  year,  or (b) during the
year  immediately  preceding the current year, had  compensation  (as defined in
Section 414(q)(4) of the Code) from the Employer in excess of


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$80,000 (as  adjusted  pursuant to Section  415(d) of the Code,  except that the
base period for determining any such  adjustment  shall be the calendar  quarter
ending September 30, 1996).

          2.23 "Hours of Service" means each of the following:

                    (i) Each hour for which an Employee is paid,  or entitled to
          payment,  for  the  performance  of  duties  for  the  Employer  or an
          Affiliate.  These  hours  will be  credited  to the  Employee  for the
          computation period in which the duties are performed.

                    (ii) Each hour for which an Employee is paid, or entitled to
          payment,  by the  Employer or an  Affiliate  on account of a period of
          time during which no duties are performed (irrespective of whether the
          employment  relationship  has  terminated)  due to vacation,  holiday,
          illness,   incapacity  (including  disability),   layoff,  jury  duty,
          military  duty or leave of absence.  No more than 501 Hours of Service
          will be credited under this paragraph for any single continuous period
          (whether or not such period  occurs in a single  computation  period).
          Hours of Service under this  paragraph will be calculated and credited
          pursuant to Section  2530.200b-2 of the Labor Department  Regulations,
          which are incorporated herein by reference.

                    (iii)  Each  hour  for  which  back  pay,   irrespective  of
          mitigation of damages,  is either awarded or agreed to by the Employer
          or an  Affiliate.  The same Hours of Service will not be credited both
          under  paragraph (i) or paragraph  (ii), as the case may be, and under
          this paragraph (iii). These hours will be credited to the Employee for
          the  computation  period or periods to which the award,  agreement  or
          payment  pertains  rather  than the  computation  period  in which the
          award, agreement or payment is made.

                    Hours of Service will also be credited (in  accordance  with
          the foregoing  rules) to the extent  required  under Section 414(n) or
          (o) of the Code and the IRS


<PAGE>

          Regulations  issued thereunder.  Notwithstanding  any provision in the
          Plan to the contrary, effective as of December 12, 1994, contributions
          and  benefits  with  respect to  qualified  military  service  will be
          provided in accordance with Section 414(u) of the Code.

          2.24 "Individual  Retirement Account Rollover  Contribution" means the
entire amount  received by an Eligible  Employee  from an individual  retirement
account or annuity described in Section  402(c)(8)(B)(i) or  402(c)(8)(B)(ii) of
the Code representing the entire amount in the account (the "qualifying amount")
if no part of the amount in the account is attributable to any source other than
(i) an employer's  plan and trust  described in Section 401(a) of the Code, that
is exempt from federal  income tax under  Section  501(a) of the Code, or (ii) a
qualified  annuity plan meeting the  requirements of Section 403(a) of the Code,
and any  earnings  on such  sums.  An  Individual  Retirement  Account  Rollover
Contribution shall be accepted only if the entire qualifying amount was received
by the Eligible  Employee in cash,  and only such cash amount is included in the
Individual Retirement Account Rollover  Contribution.  The Eligible Employee may
transfer  any portion of such cash amount to the Trust on or before the 60th day
after the day on which the Participant  received the qualifying  amount from the
individual retirement account.

          2.25  "Investment  Committee"  means the  Investment  Committee of OMI
Corporation as provided for in Section 12.

          2.26 "Investment Fund" means the investment fund or funds provided for
in Section 6 which are effective from time to time.

          2.27 "Investment Manager" means an Investment Manager, as that term is
defined in Section 3(38) of the Act,  appointed by the  Investment  Committee in
accordance with Section 12.2 hereof.


<PAGE>

          2.28 "IRS" means the United States Internal Revenue Service.

          2.29 "Labor Department" means the United States Department of Labor.

          2.30 "Normal Retirement Age" means the date which is the Participant's
65th birthday.  Upon attainment of Normal  Retirement Age, the Participant shall
have a nonforfeitable right to his entire Account balance.

          2.31  "Normal  Retirement  Date"  means  the  first  day of the  month
coincident  with or next  following  a  Participant's  attainment  of his Normal
Retirement Age.

          2.32 "OMI Corporation  Shares" means shares of OMI Corporation  common
stock,  $0.50 par value, held in the OMI Corporation Stock Fund and are intended
to constitute  "qualifying  employer securities" as defined in section 407(d)(5)
of ERISA.  It is hereby  expressly  provided  that the Plan may acquire and hold
such "qualifying employer securities."

          2.33 "OMI  Corporation  Stock  Fund" means the portion of the Plan and
the Trust Fund  invested in OMI  Corporation  Shares and shall also include such
other  assets as the  Trustee may deem  appropriate  while  assets are  awaiting
investment in OMI Corporation Shares.

          2.34 "Participant" means any Eligible Employee who participates in the
Plan as provided in Section 3.

          2.35  "Participating  Company"  means  an  Affiliate  of the  Company,
designated  by the  Board of  Directors  as such,  the  board  of  directors  or
equivalent  governing body of which shall adopt the Plan and the Trust Agreement
by  appropriate  action  and  the  Employees  of  which  shall  be  eligible  to
participate in the Plan in the manner and to the extent  determined by the Board
of Directors so long as such Affiliate remains so designated. Any such Affiliate
so designated  and which adopts the Plan shall be deemed  thereby to appoint the
Company, the Administrative  Committee, the Investment Committee and the Trustee
its exclusive agents to


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exercise on its behalf all of the powers and authority  conferred  hereby, or by
the  Trust   Agreement,   upon  the  Company,   and  shall  make  its  allocable
contributions  to the Plan.  The  authority of the Company,  the  Administrative
Committee,  the Investment Committee, and the Trustee to act as such agent shall
continue  until the Plan has  terminated  as to such  Affiliate and the relevant
Trust Fund  assets have been  distributed  by the Trustee as provided in Section
14.4 hereof.

          2.36  "Plan"  means the OMI  Corporation  Savings  Plan,  as set forth
herein and as the same may be amended from time to time. The Plan is intended to
satisfy the requirements of Section 404(c) of the Act.

          2.37 "Plan Year" means the calendar year.

          2.38 "Qualified  Domestic Relations Order" means any judgment,  decree
or  order  (including  approval  of  a  settlement  agreement)  which  has  been
determined  by  the  Administrative  Committee  in  accordance  with  procedures
established under the Plan, to constitute a qualified  domestic  relations order
within the meaning of Section 414(p)(1) of the Code.

          2.39 "Qualified  Plan Rollover  Contribution"  means any  distribution
paid to an Eligible  Employee from another  qualified trust described in Section
402  (c)(8)(B)(iii)  of the Code or from a qualified  annuity plan  described in
Section  402(c)(8)(B)(iv)  of the Code,  of all or any portion of the balance to
the credit of an  Eligible  Employee,  except  that a  Qualified  Plan  Rollover
Contribution  shall  not  include:  (i)  any  distribution  to the  extent  such
distribution  is required under Section 10.2 and Section  401(a)(9) of the Code,
(ii) any distribution  that is one of a series of  substantially  equal periodic
payments  (not  less  frequently  than  annually)  made  for  the  life  of  the
Distributee or the joint lives (or joint life  expectancies)  of the Distributee
and the


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Distributee's  Beneficiary,  or for a period  of ten  years or more,  (iii)  the
portion of any distribution  that is not includible in gross income  (determined
without regard to the exclusion for net unrealized  appreciation with respect to
employer  securities),  and (iv) effective for Plan Years  beginning on or after
January   1,   1999,   any   hardship   distribution    described   in   Section
401(k)(2)(B)(i)(IV)  of the Code. A Participant must transfer any portion of his
distribution  to be rolled over to the Trust on or before the 60th day after the
day on which he received the distribution.

          2.40 "Regulations"  means (i) the applicable  regulations issued under
the Code (referred to herein as "IRS Regulations"),  the Act (referred to herein
as "Labor  Department  Regulations")  or other  applicable  law, by the IRS, the
Labor  Department  or any  other  governmental  authority;  (ii)  any  temporary
regulations  or rules  promulgated by such  authorities  pending the issuance of
such regulations; and (c) any subsequent IRS or Labor Department guidance issued
under the applicable section of the Code or Act.

          2.41 "Rollover Contribution" and "Rollover Contribution Account" means
any contribution made by a Participant  pursuant to Section 4.5 and that portion
of the Participant's Account to which such contributions are credited.

          2.42 "Salary"  means for each Plan Year  beginning on or after January
1, 1994, an Employee's  first $150,000 (as adjusted by the,  Commissioner of the
IRS, for years  beginning  after December 31, 1993, for increases in the cost of
living  in  accordance  with  Section   401(a)(17)(B)  of  the  Code)  of  total
remuneration  paid or payable for Service  while an Eligible  Employee,  without
giving effect to any  reduction  therein  pursuant to an election  under Section
4.1(a) nor any contributions by the Employer to the Plan or any other retirement
plan maintained by the Employer, as reported on IRS Form W-2.


<PAGE>

          2.43 "Service" means employment or reemployment  (whether or not as an
Eligible Employee) with the Company,  any Participating  Company,  and, prior to
June 17, 1998, OMI Corp., a Delaware  corporation,  or with any subsidiary of or
other  corporation or entity affiliated or associated with the Company or, prior
to June 17, 1998, with OMI Corp., which is a member of the same controlled group
of corporations  (within the meaning of Section 1563(a) of the Code),  including
all periods of employment  rendered by an individual from his date of employment
or reemployment, as the case may be, with the Employer.

          2.44 "Surviving  Spouse" means the survivor of a deceased  Participant
or a deceased former  Participant to whom such deceased  Participant or deceased
former Participant had been legally married (as determined by the Administrative
Committee) on the date of the Participant's death.

          2.45  "Trust"  or "Trust  Fund"  means the  trust  established  by the
Company pursuant to the Trust Agreement.

          2.46 "Trustee" means the trustee of the Trust.

          2.47 "Trust  Agreement"  means the agreement  entered into between the
Company and the Trustee  regarding the investment and holding of Plan assets, as
amended or restated from time to time.

          2.48  "Valuation  Date" means the (i) last day of each Plan Year, (ii)
the last day of any month or months in a Plan Year,  (iii) each  business day of
each Plan Year,  or (iv) any other date as the  Administrative  Committee in its
discretion may determine from time to time.

          2.49 "Vested  Interest" means the portion of a  Participant's  Account
which has become nonforfeitable pursuant to Section 9.2.


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          2.50 "Year of Service"  means any Plan Year  during  which an Employee
completed at least 1,000 Hours of Service as  determined  by the  Administrative
Committee in accordance with the Regulations.  In addition,  solely for purposes
of  determining  whether an Eligible  Employee is enrolled as a  Participant  as
provided in Section 3, if an Employee does not complete a Year of Service during
the Plan Year in which his Service commenced but does complete a Year of Service
during  the 12  consecutive  month  period  beginning  on the date  his  Service
commenced,  as determined  by the  Administrative  Committee,  then, he shall be
credited with a Year of Service for such 12 consecutive month period.


<PAGE>

                            SECTION 3. PARTICIPATION

          3.1 Each Eligible  Employee who was a Participant on December 31, 2000
shall  continue  to be a  Participant  on January 1, 2001.  Each other  Eligible
Employee shall become a Participant in the Plan on the first day of the calendar
month coincident with or next following the date on which the Eligible  Employee
has  completed  30 days of  employment  with the  Employer,  provided  that such
Eligible Employee is employed by the Employer on that date.

          3.2 A  Participant  shall  file with the  Administrative  Committee  a
written  application  form  which  shall  include  an  election  to  reduce  the
Participant's Compensation, specifying the amount of contributions elected under
Section  4  and  authorizing  any  necessary  payroll   deductions,   investment
direction, Beneficiary designation and an agreement to be bound by all the terms
and  conditions  of the Plan and the  Trust  and any  agreement  with any  other
funding agency, including an insurance company,  constituting a part of the Plan
and the Trust Fund.

          3.3 (a) If a Participant  who terminates  Service and does not incur a
Break in Service shall again become an Eligible  Employee,  he shall be eligible
to  participate  in the Plan on the first day of the calendar  month  coincident
with or next  following  his  return to  Service,  provided  that such  Eligible
Employee is in the employ of the Employer on such date.

          (b) If a  Participant  without  any  Vested  Interest  in his  Account
terminates  Service  and  incurs  any  Break in  Service  and if the  number  of
consecutive Plan Years in which he incurred a Break in Service equals or exceeds
the  greater of five or the  aggregate  number of his Years of Service  prior to
such Break in Service  (excluding  any Years of Service  previously  disregarded
under the Break in Service  provisions of the Plan),  then, in the event that he
returns to Service,  he shall be treated as a new  Employee  for all purposes of
the Plan.


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          (c) In all other cases of a termination  of Service  accompanied  by a
Break in  Service,  if the former  Participant  shall  again  become an Eligible
Employee, he shall be eligible to participate in the Plan as of the first day of
the calendar month  coincident  with or next following the date he again becomes
an Eligible Employee.

          3.4 The Administrative Committee shall establish and maintain or cause
to be  established  and  maintained  in respect to each  Participant  an Account
showing his interest  under the Plan and in the Trust Fund  (including  separate
accounts  showing his  respective  interests,  if any, in each of the Investment
Funds)  with  respect to (i)  Compensation  Reduction  Contributions  made under
Section 4.1(a), (ii) Employer  Contributions made under Sections 5.1(a) and (b),
(iii)  Rollover  Contributions  made  pursuant to Section 4.5, (iv) ESOP Account
established  pursuant  to  Appendix  A and all other  relevant  data  pertaining
thereto.  Each  Participant  shall be furnished with a written  statement of his
Account and the value of each such separate  interest at least annually and upon
any  distribution  to him. In maintaining the Accounts under the Plan or causing
them to be maintained, the Administrative Committee may conclusively rely on the
valuations of the Trust Fund made in  accordance  with the Plan and the terms of
the Trust Agreement.

          3.5 The  establishment  and maintenance of, or allocations and credits
to, the Account of any Participant  shall not vest in any Participant any right,
title or interest  in and to any Plan  assets or benefits  except at the time or
times and upon the terms and conditions and to the extent expressly set forth in
the Plan and in accordance with the terms of the Trust.


<PAGE>


                 SECTION 4. COMPENSATION REDUCTION CONTRIBUTIONS

          4.1 (a) A  Participant  may elect to  reduce  his  Compensation  by an
amount  not less than one  percent  and not more than  fifteen  percent  of such
Compensation  for a Plan  Year  in  any  whole  percentage  in  accordance  with
procedures  adopted by the  Administrative  Committee,  and the  Employer  shall
contribute  such  amount  to  the  Plan  on  behalf  of  the  Participant  as  a
Compensation  Reduction  Contribution.   Notwithstanding  the  foregoing,   such
Compensation  Reduction  Contributions  in any  calendar  year  shall not exceed
$10,500 for 2001,  as adjusted for increases in the cost of living in accordance
with Section  402(g)(5) of the Code. In the event that the  aggregate  amount of
Compensation Reduction Contributions for a Participant exceeds the limitation in
the previous  sentence,  the amount of such  excess,  increased by any gains and
decreased  by  any  losses  attributable  thereto,  shall  be  refunded  to  the
Participant  no later than the April 15th of the  calendar  year  following  the
calendar year for which the Compensation Reduction Contributions were made. If a
Participant also participates,  in any calendar year, in any other plans subject
to the limitation set forth in Section 402(g) of the Code and has made deferrals
under the Plan when  combined  with the other  plans  subject to such  limits in
excess  of the  limitation  described  above,  to  the  extent  the  Participant
designates,  in writing submitted to the Administrative  Committee no later than
the March 1 of the  calendar  year  following  the  calendar  year for which the
Compensation  Reduction  Contributions  were made,  any  Compensation  Reduction
Contributions under the Plan as excess deferrals,  the amount of such designated
excess, increased by any gains and decreased by any losses attributable thereto,
shall be refunded to the  Participant no later than the April 15 of the calendar
year  following  the  calendar  year  for  which  the   Compensation   Reduction
Contributions were made. The amount of such excess gains or losses is determined
by multiplying the gain or loss for the calendar year


<PAGE>

allocable  to  the  excess  deferrals  of the  Participant  by a  fraction,  the
numerator of which is the excess deferral amount made by the Participant for the
calendar year and the  denominator  of which is the balance of the  Compensation
Reduction  Contribution  Account as of the end of such  calendar  year,  without
regard to any gain or loss, allocable to such Account for the calendar year. The
amount of excess  deferrals  that may be  distributed  pursuant to this  Section
4.1(a)  with  respect  to  a   Participant   shall  be  reduced  by  any  excess
contributions  (as  defined in Section  4.1(b)(ii))  previously  distributed  or
recharacterized with respect to the Participant for the Plan Year beginning with
or  within  the   calendar   year  to  which  such  excess   deferrals   relate.
Notwithstanding  the  foregoing,  the Committee  may, upon written notice to the
Highly  Compensated  Participants,  reduce or suspend  such  Highly  Compensated
Participants' Compensation Reduction Contributions as may be necessary to ensure
compliance  with the  requirements of Sections 401(k) and 401(m) of the Code and
IRS Regulations thereunder.

          (b) This  Section  4.1(b)  and  Section  4.1(c)  shall only apply with
respect to Plan Years beginning prior to January 1, 1999.

          (i)  Notwithstanding  any other  provision  of this  Section  4.1, the
actual deferral  percentage for the Plan Year for Highly  Compensated  Employees
shall not exceed the greater of the following actual deferral  percentage tests:
(A) the  actual  deferral  percentage  for  such  Plan  Year of  those  Eligible
Employees who are not Highly  Compensated  Employees  multiplied by 1.25, or (B)
the actual deferral percentage for the Plan Year of those Eligible Employees who
are not Highly Compensated Employees multiplied by 2.0; provided that the actual
deferral percentage for Highly Compensated  Employees does not exceed the actual
deferral  percentage  for  such  other  Eligible  Employees  by  more  than  two
percentage  points.  For  purposes of this  Section  4.1,  the "actual  deferral
percentage" for a Plan Year means, for each


<PAGE>

specified  group of Eligible  Employees,  the average of the ratios  (calculated
separately  for each  Eligible  Employee in such group)  (the  "actual  deferral
ratio")  of (A) the  amount  of  contributions  allocated  to the  Participant's
Compensation  Reduction Contribution Account (and any contribution under Section
5.1(a)  which  meets the  requirements  of Section  1.401(k)-l(b)(5)  of the IRS
Regulations,  which  Regulations  are hereby  incorporated  herein by reference)
during the Plan Year, to (B) the amount of the  Participant's  Compensation  for
the Plan Year. A Participant's Compensation Reduction Contribution will be taken
into account under the actual deferral percentage test, as described herein, for
a Plan Year only if such contribution  relates to Compensation that either would
have been  received by the Employee  during the Plan Year,  but for the election
pursuant to Section  4.1(a),  or is  attributable  to Service  performed  by the
Employee  during  the Plan Year and would  have been  received  by the  Employee
within two and  one-half  months  after the close of the Plan Year,  but for the
election pursuant to Section 4.1(a). A Compensation  Reduction Contribution will
be taken into account under the actual deferral  percentage test for a Plan Year
only if it is allocated to the Participant's Compensation Reduction Contribution
Account as of a date within such Plan Year. For purposes of the actual  deferral
percentage test described herein, a Compensation  Reduction Contribution will be
considered  allocated within a Plan Year if such allocation is not contingent on
participation   or  the   performance   of  Service  after  such  date  and  the
Participant's  Compensation Reduction Contribution is actually paid to the Trust
no later than 12 months after the Plan Year to which such contribution  relates.
An Eligible  Employee's  actual  deferral ratio shall be zero if no Compensation
Reduction  Contributions  are made on his behalf for such Plan Year. If the Plan
and one or more other plans which  include  cash or  deferred  arrangements  are
considered  as one plan for  purposes  of Sections  401(a)(4)  and 410(b) of the
Code, the cash or deferred


<PAGE>

arrangements  included  in such plans  shall be treated as one  arrangement  for
purposes of this Section  4.1(b).  The actual  deferral ratio taken into account
under  this  Section  4.1(b)  for  any  Highly  Compensated  Employee  who  is a
participant  under  two or more  Section  401(k)  of the Code  cash or  deferred
arrangements  of the Employer  shall be determined as if all such Section 401(k)
cash or  deferred  arrangements  were  treated  as one  Section  401(k)  cash or
deferred arrangement.

          (ii) The Administrative Committee shall determine as of the end of the
Plan  Year,  and at such  time or times in its  discretion,  whether  one of the
actual deferral percentage tests specified in Section 4.1(b)(i) is satisfied for
such Plan Year.  This  determination  shall be made after first  determining the
treatment of excess  deferrals  within the meaning of Section 402(g) of the Code
under  Section  4.1(a).  In the  event  that  neither  of such  actual  deferral
percentage tests is satisfied, the Administrative Committee shall, to the extent
permissible under the Code and IRS Regulations,  refund the excess contributions
in the manner  described  in Section  4.1(b)(iii).  For purposes of this Section
4.1, "excess  contributions" means, with respect to any Plan Year, the excess of
the aggregate amount of Compensation  Reduction  Contributions (and any earnings
and losses allocable  thereto) made to the Compensation  Reduction  Contribution
Accounts of Highly Compensated Participants for such Plan Year, over the maximum
amount of such  contributions  that could be made to the Compensation  Reduction
Contribution Accounts of such Participants without violating the requirements of
Section 4.1(b)(i),  determined for each such Highly  Compensated  Participant by
reducing  Compensation   Reduction   Contributions  made  on  behalf  of  Highly
Compensated  Participants  as follows:  First,  the actual deferral ratio of the
Highly  Compensated  Employee with the highest  actual  deferral  ratio based on
dollar amount is reduced to the extent necessary to satisfy the actual deferral


<PAGE>

percentage  test  under  Section  4.1(b) or cause such ratio to equal the actual
deferral ratio of the Highly  Compensated  Employee with the next highest ratio.
Second,  the process is repeated until the actual  deferral  percentage  test is
satisfied.  The amount of excess contributions for a Highly Compensated Employee
is then  equal to the total of the  contributions  taken  into  account  for the
actual deferral  contribution  test minus the product of the Employee's  reduced
actual  deferral  ratio as  determined  above and the product of the  Employee's
Compensation.  This process shall be known as the leveling method,  as described
in IRS  Regulation  Section  1.401(k)-1(f)(2)  and any  subsequent IRS guidance,
which guidance is hereby incorporated herein by reference.

          (iii) If required in order to comply  with the  provisions  of Section
4.1(b)(i)  and the  Code,  the  Administrative  Committee  shall  refund  excess
contributions  for a Plan Year. The  distribution  of such excess  contributions
shall be made to  Highly  Compensated  Participants  to the  extent  practicable
before the 15th day of the third month  immediately  following the Plan Year for
which such excess contributions were made, but in no event later than the end of
the Plan Year following such Plan Year or, in the case of the termination of the
Plan in accordance with Section 14, no later than the end of the 12-month period
immediately following the date of such termination.  Any such distribution shall
be made to each Highly  Compensated  Participant  on the basis of the respective
portions  of  such  amounts   attributable  to  each  such  Highly   Compensated
Participant determined under Section 4.1(b)(ii).  The distribution of any excess
contributions  shall include the gains and losses allocable thereto for the Plan
Year. The gain or loss allocable to excess  contributions for a Plan Year is the
gain or loss allocable to the Participant's  Compensation Reduction Contribution
Account (and the portion of his Employer  Contribution  Account  included in the
actual  deferral  percentage  test,  if any) for the Plan Year  multiplied  by a
fraction, the numerator of which is the Participant's Compensation


<PAGE>

Reduction Contributions for the Plan Year (and his Employer Contribution Account
to  the  extent  included  in the  actual  deferral  percentage  test)  and  the
denominator of which is the Participant's  Compensation  Reduction  Contribution
Account (and his  Employer  Contribution  Account to the extent  included in the
actual deferral  percentage test) as of the end of such Plan Year without regard
to any gain or loss for the Plan Year.

          (iv)  Notwithstanding the foregoing provisions of this Section 4.l(b),
the  amount  of excess  contributions  to be  distributed  pursuant  to  Section
4.1(b)(iii) with respect to a Highly Compensated Employee for a Plan Year, shall
be reduced by any excess deferrals distributed to such Participant for such Plan
Year pursuant to Section 4.1(a).  In no case may the amount of such  distributed
excess contributions exceed the amount of Compensation  Reduction  Contributions
made on behalf of the Highly Compensated Employee for the Plan Year.

          (c) (i)  Notwithstanding  any other  provision of the Plan, the sum of
the actual deferral  percentage  determined in accordance with Section 4.1(b)(i)
of those Eligible Employees who are Highly Compensated  Employees and the actual
contribution percentage determined in accordance with Section 5.1(d)(i) of those
Eligible  Employees who are Highly  Compensated  Employees  shall not exceed the
aggregate limit determined in accordance with Section 4.1(c)(ii).

          (ii) For purposes of this Section 4.1(c),  the "aggregate limit" for a
Plan  Year  means  the  greater  of (A) or (B)  where (A) is the sum of (1) 1.25
multiplied  by the  greater  of the  actual  deferral  percentage  or the actual
contribution   percentage  of  those  Eligible  Employees  who  are  not  Highly
Compensated  Employees,  and (2) two  plus the  lesser  of the  actual  deferral
percentage or the actual contribution percentage of those Eligible Employees who
are not Highly Compensated Employees,  provided that the amount shall not exceed
twice the lesser of the actual


<PAGE>

deferral  percentage or the actual  contribution  percentage  of those  Eligible
Employees who are not Highly  Compensated  Employees;  and (B) is the sum of (1)
1.25  multiplied by the lesser of the actual  deferral  percentage or the actual
contribution   percentage  of  those  Eligible  Employees  who  are  not  Highly
Compensated  Employees,  and (2) two plus the  greater  of the  actual  deferral
percentage or the actual contribution percentage of those Eligible Employees who
are not Highly Compensated Employees, provided that this amount shall not exceed
twice the greater of the actual deferral  percentage or the actual  contribution
percentage of those Eligible Employees who are not Highly Compensated Employees.

          (iii) The  Administrative  Committee  shall determine as of the end of
the Plan Year, and at such time or times in its discretion whether the aggregate
limit  has  been  exceeded.   This  determination  shall  be  made  after  first
determining  the  treatment  of excess  deferrals  within the meaning of Section
402(g) of the Code under  Section  4.1(a),  then  determining  the  treatment of
excess contributions under Section 4.1(b), and then determining the treatment of
excess  aggregate  contributions  under  Section  5.1(d).  In the event that the
aggregate limit is exceeded the actual contribution percentage of those Eligible
Employees  who are  Highly  Compensated  Employees  shall be reduced in the same
manner as described in Sections  5.1(d)(ii) and (iii) until the aggregate  limit
is no longer exceeded.

          4.2 A Participant  may suspend  Compensation  Reduction  Contributions
made on his  behalf,  change  the  rate  of the  reduction  of his  Compensation
pursuant to Section 4.1 upward or downward within the percentage limitations set
forth in Section  4.1, or change his  investment  direction  pursuant to Section
6.2(c),  without  terminating his  participation in the Plan, as of any business
day. Such change or suspension shall be effective as soon as practicable, but


<PAGE>

in no event later than 45 days after the payroll  period  immediately  following
the  date  the  Administrative  Committee  receives  notice  of such  change  or
suspension.

          4.3 All  Compensation  Reduction  Contributions  made on  behalf  of a
Participant (during each payroll period, or at such other times as designated by
the Administrative  Committee) shall be delivered by the Employer to the Trustee
as of the earliest date on which such contributions can reasonably be segregated
from the Company's general assets,  but in no event later than the 15th business
day of the month  following the month in which such amounts would otherwise have
been payable to such Participants in cash, to be commingled,  managed,  invested
and reinvested  with the other assets of the Plan. Such  Compensation  Reduction
Contributions  shall  be  credited  by  the  Administrative   Committee  to  the
Participant's    Compensation   Reduction   Contribution   Account   which   the
Administrative Committee shall establish and maintain or cause to be established
and maintained as part of the  Participant's  Account in accordance with Section
3.4.

          4.4 The amount  credited  to a  Participant's  Compensation  Reduction
Contribution Account shall be paid from the Trust Fund to the Participant or his
Beneficiary  or Surviving  Spouse at the same time and in the same manner as any
payment made in accordance with Section 10.

                  4.5 (a) An Eligible Employee who is a Participant may make a
Rollover Contribution to the Plan at any time of a Qualified Plan Rollover
Contribution or an Individual Retirement Account Rollover Contribution. If a
Participant elects to make a Rollover Contribution, such Participant shall
supply the Administrative Committee with evidence, assurances, opinions and
certifications as it may deem necessary to establish to its satisfaction that
the amounts to be contributed qualify as a Qualified Plan Rollover Contribution,
or an


<PAGE>

Individual  Retirement  Account  Rollover  Contribution  and will not affect the
qualification  of the Plan or the tax-exempt  status of the Trust under Sections
401(a) and 501(a) of the Code, respectively.

          (b) Any Rollover  Contribution  shall be allocated to the  appropriate
Participant's  Rollover  Contribution  Account  which shall be  established  and
separately  accounted for, shall be invested in accordance with the direction of
the Participant pursuant to Section 6, be debited or credited in accordance with
Section 7, and shall be  distributed  in the same manner and at the same time as
described in Sections 8 and 10 with respect to a distribution  of benefits under
the Plan to such Participant.

          (c)  Each  request  by  any  Eligible  Employee  to  make  a  Rollover
Contribution  shall be subject to review by the  Administrative  Committee which
shall make a case by case  determination  that each Rollover  Contribution meets
the  requirements  set forth in Section  4.5(a) and such other  requirements  or
conditions  as the  Administrative  Committee  may, from time to time and in its
sole discretion,  impose; provided,  however, that any determination made by the
Administrative  Committee  pursuant to this  Section  4.5(c)  shall not have the
effect of discriminating in favor of Employees who are officers, shareholders or
Highly Compensated Employees.


<PAGE>


                        SECTION 5. EMPLOYER CONTRIBUTIONS

          5.1 (a) The Employer shall  contribute an amount equal to 100% of each
Participant's  Compensation  Reduction  Contribution  made  pursuant  to Section
4.1(a) up to the first six percent of such Participant's Compensation.

          (b) In addition  to the  contributions  under  Section 4.1 and Section
5.1(a), the Employer may contribute additional amounts from time to time, as may
be  determined  in a  nondiscriminatory  manner by the Board of Directors in its
sole discretion; provided, however, the Employer shall not make any contribution
pursuant to this Section  5.1(b) with respect to any  Participant  to the extent
that such contribution would cause all such contributions made on behalf of such
Participant to exceed, in the aggregate, six percent of his Compensation.

          (c) The amount of any  forfeitures  pursuant  to Section  8.3 (if any)
shall first, reduce the amount of Employer  Contributions required for each Plan
Year  pursuant  to  Section  5.1(a);  second,  reduce  the  amount  of  Employer
Contributions  made pursuant to Section 5.1(b); and third, any remainder will be
used to pay administrative expenses of the Plan.

          (d) This  Section  5.1(d)  shall  apply  with  respect  to Plan  Years
beginning prior to January 1, 1999.

          (i)  Notwithstanding  any other  provision  of this  Section  5.1, the
actual  contribution  percentage  for  the  Plan  Year  for  Highly  Compensated
Employees  shall not exceed the  greater of the  following  actual  contribution
percentage tests: (A) the actual  contribution  percentage for such Plan Year of
those Eligible Employees who are not Highly Compensated  Employees multiplied by
1.25,  or (B) the  actual  contribution  percentage  for the Plan  Year of those
Eligible Employees who are not Highly Compensated  Employees  multiplied by 2.0;
provided  that  the  actual  contribution   percentage  for  Highly  Compensated
Employees does not


<PAGE>

exceed the actual  contribution  percentage for such other Eligible Employees by
more than two percentage  points.  For purposes of this Section 5.1, the "actual
contribution  percentage"  for a Plan Year means,  for each  specified  group of
Eligible  Employees,  the average of the ratios (calculated  separately for each
Eligible  Employee in such group) (the "actual  contribution  ratio") of (A) the
sum of (I) Employer Contributions described in Section 5.1(a) made on account of
Compensation Reduction  Contributions made during the Plan Year and allocated to
the Participant's Employer Contribution Account during the Plan Year and paid to
the Trust within 12 months after the Plan Year for which such  contributions are
made (except for Employer  Contributions  which are nonforfeitable when made and
which are subject to the distribution  requirements under Section  1.401(k)-l(b)
of the IRS Regulations, and are used to meet the actual deferral percentage test
under  Section  4.1(b)),  and if  the  Administrative  Committee  so  elects  in
accordance  with  and  to  the  extent  permitted  by  IRS   Regulations,   (II)
Compensation  Reduction  Contributions  (including  excess  contributions  under
Section  4.1(b) if the  contribution  would  have been  received  in cash by the
Participant  had the Participant not elected to defer such amounts under Section
4.1(a)) credited to his Compensation  Reduction Contribution Account, to (B) the
amount  of the  Participant's  Compensation  for  the  Plan  Year.  An  Eligible
Employee's actual contribution  percentage shall be zero if no contributions are
made on his behalf for such Plan Year.  If the Plan and one or more other  plans
of the  Employer  to which  Compensation  Reduction  Contributions  or  Employer
Contributions  are  made  are  treated  as one plan  for  purposes  of  Sections
401(a)(4)  and  410(b)  of the Code,  Compensation  Reduction  Contributions  or
Employer  Contributions  of such  plans  shall be  treated as being made under a
single plan for purposes of this Section 5.1(d).  The actual  contribution ratio
taken into account under this Section 5.1(d) for any Highly Compensated Employee
who is eligible to receive Employer


<PAGE>

          Contributions  under two or more plans  described in Section 401(a) of
the Code or  arrangements  described  in  Section  401(k)  of the Code  that are
maintained by the Employer shall be determined as if all such contributions were
made  under a  single  plan.  The  determination  and  treatment  of the  actual
contribution  ratio of any Participant shall satisfy such other  requirements as
may  be  required  by  the  IRS  Regulations,   which   Regulations  are  hereby
incorporated herein by reference.

          (ii) The Administrative Committee shall determine as of the end of the
Plan  Year,  and at such  time or times in its  discretion,  whether  one of the
actual contribution percentage tests specified in Section 5.1(d)(i) is satisfied
for such Plan Year. This determination shall be made after first determining the
treatment of excess  deferrals  within the meaning of Section 402(g) of the Code
under Section 4.1(a) and then determining the treatment of excess  contributions
under  Section  4.1(b).  In the event that  neither  of the actual  contribution
percentage  tests is satisfied,  the  Administrative  Committee  shall refund or
forfeit the excess  aggregate  contributions  in the manner described in Section
5.1(d)(iii).  For purposes of this Section 5.1, "excess aggregate contributions"
means,  with respect to any Plan Year and with respect to any  Participant,  the
excess of the  aggregate  amount of  contributions  (and any earnings and losses
allocable thereto) made to (A) the Employer  Contribution Account (except to the
extent  used  to  meet  the  requirements  of  Section  4.1(b)),   and  (B)  the
Compensation  Reduction Contribution Account (to the extent permitted by the IRS
Regulations  and if the  Administrative  Committee  elects to take into  account
Compensation  Reduction  Contributions when calculating the actual  contribution
percentage under Section 5.1(d)(i)) of Highly Compensated  Participants for such
Plan Year, over the maximum amount of such  contributions  that could be made to
the  Employer  Contribution  Account  and  Compensation  Reduction  Contribution
Account of such  Participants  without  violating  the  requirements  of Section
5.1(d)(i). The amount of each Highly


<PAGE>

Compensated  Participant's excess aggregate contributions shall be determined as
follows: First, the actual contribution ratio of the Highly Compensated Employee
with the highest actual  contribution ratio based on dollar amount is reduced to
the extent  necessary to satisfy the actual  contribution  percentage test under
Section 5.1(d)(i) or cause such ratio to equal the actual  contribution ratio of
the Highly Compensated Employee with the next highest ratio. Second, the process
is repeated  until the actual  contribution  percentage  test is satisfied.  The
amount of excess aggregate  contributions for a Highly  Compensated  Employee is
then equal to the total of the  contributions  taken into account for the actual
contribution  percentage test minus the product of the Employee's reduced actual
contribution  ratio as determined  above and the Employee's  Compensation.  This
process shall be known as the leveling  method,  as described in IRS  Regulation
Section  1.401(m)-1(e)(2)  and any  subsequent  IRS guidance,  which guidance is
hereby are incorporated herein by reference.

          (iii) If the Administrative Committee is required to refund or forfeit
excess aggregate contributions for any Highly Compensated Participant for a Plan
Year in order to satisfy the requirements of Section 5.1(d)(i),  then the refund
or forfeiture of such excess aggregate  contributions shall be made with respect
to such Highly  Compensated  Participants to the extent  practicable  before the
15th day of the third month  immediately  following the Plan Year for which such
excess aggregate  contributions were made, but in no event later than the end of
the Plan Year following such Plan Year or, in the case of the termination of the
Plan in accordance with Section 14, no later than the end of the 12-month period
immediately  following the date of such termination.  For each such Participant,
amounts  so  refunded  or  forfeited  shall  be made in the  following  order of
priority:  (A) to the extent permitted by law, by forfeiting  nonvested  amounts
contributed to the Employer Contribution Account, and earnings thereon; (B)


<PAGE>

by distributing vested amounts contributed to the Employer Contribution Account,
and  earnings  thereon;   (C)  by  distributing   amounts   contributed  to  the
Compensation  Reduction  Contribution  Account (to the extent  such  amounts are
included in the actual contribution percentage) including amounts contributed to
the Employer  Contribution  Account,  and earnings  thereon,  to the extent such
amounts were based on Compensation Reduction  Contributions so distributed,  and
earnings  thereon.  However,  in no case  may the  amount  of  excess  aggregate
contributions  refunded  or  forfeited  with  respect to any Highly  Compensated
Employee exceed the amount of Employer  Contributions  under Section 5.1(a) made
on  behalf  of the  Highly  Compensated  Employee  for the Plan  Year.  All such
distributions  and  forfeitures  shall be made to, or shall be with  respect to,
Highly Compensated  Participants on the basis of the respective portions of such
amounts  attributable to each such Highly Compensated  Participant as determined
under Section 5.1(d)(ii). The distribution of any excess aggregate contributions
shall include the gains and losses allocable thereto for the Plan Year. The gain
or  loss  allocable  to  excess  aggregate  contributions  is the  gain  or loss
allocable to the Participant's  Employer  Contribution  Account  attributable to
contributions under Section 5.1(a) (and any Compensation  Reduction Contribution
included in the actual contribution  percentage test) to the extent not included
in the actual deferral  percentage test multiplied by a fraction,  the numerator
of which is the excess  aggregate  contribution for the Participant for the Plan
Year and the  denominator is the  Participant's  Employer  Contribution  Account
attributable to  contributions  under Section 5.1(a) (and all amounts treated as
such for purposes of the actual contribution percentage test) at the end of such
Plan Year, without regard to gains and losses  attributable to such Accounts for
the Plan Year.  The amount of any  forfeitures  pursuant to this Section  5.1(d)
shall be used in accordance with Section 5.1(c).


<PAGE>

          5.2 Employer  Contributions  under  Section  5.1(a) shall be allocated
each month to the Employer  Contribution  Account of each  Participant as of the
last day of each month, based upon the Compensation  Reduction Contribution made
on behalf of such Participant  pursuant to Section 4.1(a) during such month. All
Employer  Contributions  under Section 5.1(b) for a Plan Year shall be allocated
among the Participants who are in Service as of the last day of the Plan Year in
the proportion that the Compensation of each such Participant bears to the total
Compensation of all Participants in Service as of the last day of the Plan Year.
If  the  Plan  fails  to  satisfy  Section  401(a)(4)  of  the  Code,   Employer
Contributions  under  Section  5.1(b)  shall be  allocated  among  the  Eligible
Employees who are Participants for the Plan Year in which such contributions are
made, in the proportion that the Compensation of each such Participant  bears to
the total Compensation of all Participants for such Plan Year.

          5.3 The  Employer  Contributions  under  Section  5.1(a) shall be paid
directly  to the Trustee as soon as  practicable  but in no event later than the
month  next  following  the month in which the  amount of such  contribution  is
determinable,  as the Administrative  Committee may determine,  and the Employer
Contributions, if any, under Section 5.1(b) shall be paid as soon as practicable
to the Trustee  following  the  approval of such  contributions  by the Board of
Directors;  provided that the total amount of the Employer  Contributions  under
the Plan for any  taxable  year shall be paid in full on or before  such date as
the federal income tax laws applicable to such payment require the payment to be
made in order to permit deduction of such payment for such taxable year.

          5.4 The Compensation  Reduction  Contributions made for a taxable year
pursuant to Section  4.1(a) and the  Employer  Contributions  made for a taxable
year pursuant to


<PAGE>

Section 5.1,  shall be paid directly by the Employer to the Trustee in cash, or,
at the option of the Employer,  in whole or in part in other property acceptable
to the Trustee.

          5.5 If any Participating  Company, which is a member of the affiliated
group (within the meaning of Section 1504 of the Code) and which is permitted to
file a  consolidated  federal  income tax return with the Company,  is prevented
from making its allocable  share of the  contribution  which it would  otherwise
have made under the Plan by reason of having  insufficient  net profit,  then so
much of the contribution of such Participating Company which it was so prevented
from making shall be made, for the benefit of the Participants who are Employees
of such Participating  Company, by the other Employers which are members of such
affiliated  group to the extent of their  respective net profit  remaining after
deduction of their respective contributions under the Plan or any other plan for
the benefit of their Employees, as may be provided by resolution of the Board of
Directors.

          5.6 Any contribution  made by an Employer because of a mistake of fact
shall be returned to the Employer which made such  contribution  within one year
of such  contribution.  Any contribution made by an Employer is conditioned upon
the contribution's  deductibility or the Plan's initial  qualification under the
Code, and if either the deduction or the initial  qualification is denied,  such
contribution  shall be returned  to the  Employer  which made such  contribution
within one year after the date such deduction or qualification is denied.


<PAGE>

                     SECTION 6. INVESTMENT OF CONTRIBUTIONS

          6.1 All amounts of money,  securities or other property received under
the Plan shall be delivered to the Trustee to be managed,  invested,  reinvested
and  distributed  for  the  exclusive  benefit  of the  Participants  and  their
Beneficiaries  in accordance  with the Plan, the Trust and any agreement with an
insurance company or other financial institution constituting a part of the Plan
and the Trust. The Trustee shall cause to be established and maintained separate
Investment  Funds selected by the  Administrative  Committee and/or the Board of
Directors  in  accordance  with and subject to the terms and  conditions  of the
Trust Agreement (as well as any other contract or agreement  entered into by the
Company or the  Administrative  Committee  with respect to the investment of the
Trust  Fund  assets)  and the  remaining  provisions  of  this  Section  6.  The
Administrative  Committee  and the Board of Directors in their  discretion  each
reserve the right to create additional and/or terminate any existing  Investment
Fund(s)  for the  investment  of the  Trust  Fund  from  time to time.  Anything
contained in this Section 6.1 to the contrary  notwithstanding,  all or any part
of the Trust Fund may be invested in mutual funds or other securities  issued by
an investment company or an investment company principal underwriter,  or may be
held and invested under one or more pooled or commingled  funds  maintained by a
bank or insurance  company,  together with  commingled  assets of other plans of
deferred  compensation  under Section 401(a) of the Code. A portion of the Trust
Fund, as determined by the Administrative  Committee, may be held in the form of
uninvested  cash for temporary  periods,  pending  investment  or  disbursement.
Commencing as of July 1, 2000,  that portion of the Trust Fund that is allocated
to the OMI Corporation  Stock Fund shall be invested in OMI Corporation  Shares.
OMI  Corporation  Shares  shall be purchased by the Trustee from time to time on
the open market or by private purchase,  in accordance with a  non-discretionary
purchasing program


<PAGE>

and  allocated  to the  Accounts of affected  Participants  in whole  shares and
fractions  thereof.  Purchases  by the Trustee  made on the open market shall be
reflected at the Trustee's cost, net of any brokerage commissions and fees. Cash
dividends  attributable to OMI Corporation  Shares in the OMI Corporation  Stock
Fund shall be reinvested in the OMI Corporation  Stock Fund and allocated to the
Accounts of affected Participants in whole shares and fractions thereof.

          6.2 (a) Each  Participant,  upon  electing to reduce his  Compensation
pursuant to Section 4.1, shall  designate the Investment  Fund or Funds in which
the  Compensation  Reduction  Contributions  made on his behalf and his Rollover
Contributions  shall be invested.  The amount of the Participant's  Compensation
Reduction  Contributions,  and Rollover  Contributions  shall be invested in the
Investment  Funds  designated  until such time as the  Participant  changes  his
investment  election  pursuant to Section  6.2(c).  The Investment Fund or Funds
designated by the  Participant  pursuant to this Section 6.2(a) must be the same
Investment  Fund or Funds  designated  by the  Participant  pursuant  to Section
6.2(b),  and must be designated in multiples of one percent of all contributions
subject to designation pursuant to Sections 6.2(a) and (b).

          (b) Each  Participant  shall designate the Investment Fund or Funds in
which all the Employer Contributions allocated to his Account shall be invested.
The amount of such Employer  Contributions  shall be invested in the  Investment
Fund or  Funds  designated  until  such  time  as the  Participant  changes  his
investment  election  pursuant to Section  6.2(c).  The Investment Fund or Funds
designated  by a  Participant  pursuant to this Section  6.2(b) must be the same
Investment  Fund or Funds  designated  by the  Participant  pursuant  to Section
6.2(a),  and must be designated in multiples of one percent of all contributions
subject to designation pursuant to Sections 6.2(a) and (b).


<PAGE>

          (c) Any investment direction given by a Participant shall be deemed to
be a continuing  direction until changed.  Subject to the limitations of Section
4.2,  a   Participant   may  change  an   investment   direction  as  to  future
contributions,  past  contributions,  with earnings and gains  thereon,  if any,
either (i) by 30 days prior  written  notice to the Committee or (ii) subject to
Section  12.12,  pursuant  to any  electronic,  telephonic  or other  means,  as
approved from time to time by the Administrative  Committee. Each Participant is
solely  responsible  for  the  selection  of  his  investment  options  and  the
availability of an Investment Fund or Funds to Participants for investment under
the Plan shall not be  construed  as a  recommendation  for  investment  in such
Investment Fund or Funds.

          6.3 (a)  Notwithstanding  anything  in the  Plan to the  contrary,  an
Insider may not elect to (i) increase his interest in the OMI Corporation  Stock
Fund  (whether by a change of election or by  transfer)  within six months of an
election to decrease  his interest in the OMI  Corporation  Stock Fund (or in an
investment in OMI  Corporation  common stock under another plan of the Company),
or (ii)  decrease  his  interest,  if any,  in the OMI  Corporation  Stock  Fund
(whether  by  change of  election  or by a  transfer)  within  six  months of an
election to increase  his interest in the OMI  Corporation  Stock Fund (or in an
investment in OMI  Corporation  common stock under another plan of the Company),
or (iii)  increase his interest in the OMI  Corporation  Stock Fund  (whether by
election or by a transfer)  within six months of (A) a cash  withdrawal from his
Account  (other  than  a  cash  withdrawal  in  connection  with  the  Insider's
termination  of  employment,  disability  or  death)  to the  extent  that  such
withdrawal  results in a withdrawal  of an amount in the OMI  Corporation  Stock
Fund, or (B) a withdrawal  from any other plan  maintained by the Company (other
than a cash


<PAGE>

withdrawal  in  connection   with  the  Insider's   termination  of  employment,
disability or death) to the extent that such withdrawal  results in a withdrawal
of an amount  attributable to OMI Corporation common stock. For purposes of this
Section 6.3(a),  "Insider" shall mean a Participant who is subject to Section 16
of the Securities Exchange Act of 1934, as amended.

          (b) All Participants and Beneficiaries who have OMI Corporation Shares
allocated to their  Accounts  shall have the same rights with respect to voting,
tender offers and other similar rights as other  shareholders of OMI Corporation
Shares.  Accordingly,  each  Participant and Beneficiary who has OMI Corporation
Shares  allocated  to his Account  shall be  entitled  to  instruct  the Trustee
regarding the voting of the number of such OMI Corporation  Shares  allocated to
his Account at all stockholders meetings of the Company,  determined on the last
practicable  day prior to each such  stockholders  meeting.  If clear and timely
instructions  have not been received from the Participant or Beneficiary,  or if
OMI  Corporation  Shares  have  not  yet  been  allocated  to  the  Accounts  of
Participants  and  Beneficiaries,  the Trustee  shall vote such OMI  Corporation
Shares in the same proportion as are voted the shares for which clear and timely
voting  instructions  have been received from  Participants  and  Beneficiaries,
unless the Trustee  determines in the exercise of its  fiduciary  responsibility
that  such OMI  Corporation  Shares  should  be voted in a  different  manner to
protect the interest of Participants and Beneficiaries. As agreed by the Company
and the Trustee,  the Company or the Trustee will send,  or cause to be sent, to
each Participant and Beneficiary who has OMI Corporation Shares allocated to his
Account notice of each such  stockholder  meeting and a voting  instruction form
and the same proxy solicitation  material as is sent to stockholders  generally.
The Trustee is designated as the fiduciary responsible for


<PAGE>

maintaining  procedures to protect the confidentiality of all directions and the
exercising  of rights by  Participants  and  Beneficiaries  with  respect to OMI
Corporation Shares under the Plan.

          (c)  Notwithstanding any other provisions of the Plan to the contrary,
if any person shall make a tender offer to acquire (by purchase or exchange) OMI
Corporation common stock,  including OMI Corporation Shares that are held in the
Trust, the Trustee shall act as follows:

     (1)  The Trustee shall notify each  Participant and Beneficiary who has OMI
          Corporation  Shares  invested in his Account of such tender  offer and
          utilize its best efforts to distribute or cause to be distributed  the
          materials  that  are  made  available  to  shareholders  generally  in
          connection with the tender.  The response of the Trustee as to whether
          to accept or reject  the tender  offer  with  respect to the whole and
          fractional  shares of OMI  Corporation  Shares  that are so  allocated
          shall be made in accordance  with the  instructions of the Participant
          given to the Trustee on forms  provided for that purpose.  The Trustee
          shall  treat a failure  to  return a timely  instruction  regarding  a
          tender  offer  as  a  decision  not  to  tender  the   applicable  OMI
          Corporation Shares.

     (2)  Notwithstanding  paragraph  (1)  above,  if the  Trustee  in its  sole
          discretion  determines  that under the  circumstances  of a particular
          tender offer there is not sufficient time to pass the decision through
          to  Participants  in the manner  anticipated  in  paragraph  (1),  the
          Trustee shall in its sole  discretion  determine  whether to accept or
          reject  the  tender  offer (in whole or in part)  with  respect to the
          affected whole and fractional  shares of OMI  Corporation  Shares that
          are allocated to the Accounts of Participants.

     (3)  With respect to whole and fractional shares of OMI Corporation  Shares
          that  have  been  acquired  by the  Plan  and are  not  yet  allocated
          (including any such OMI Corporation  Shares held in a suspense account
          because it cannot be allocated  currently  due to the Code Section 415
          limits), the Trustee shall in its sole discretion determine whether to
          accept the tender offer (in whole or in part).

If any tender  offer is accepted (in whole or in part),  the Trustee  shall have
the power to transfer OMI Corporation Shares in order to effect such acceptance.
For purposes of this section  "tender offer" shall mean any offer to acquire OMI
Corporation Shares which is subject to either Section


<PAGE>

13(e)  or  14(d)  of the  Securities  Exchange  Act of  1934,  and  which  under
applicable  rules and regulations is required to be the subject of a filing with
the  Securities  and Exchange  Commission on either  Schedule  13E-4 or Schedule
14D-9. The foregoing  notwithstanding,  nothing herein shall serve to modify the
related  rules of the Trust  Agreement  or to expand the  duties of the  Trustee
unless and until the Trustee  gives its consent in a manner  acceptable  to both
the Trustee and the Company.

          6.4 (a) A  Participant  shall be  permitted to request a loan from the
Plan. A loan request  application must be submitted in writing, or in such other
manner or form as designated by the Administrative Committee, by each requesting
Participant  no less  than 30 days  prior to the date on which the loan is to be
distributed.  Each  requesting  Participant,  shall be  required  to provide the
Administrative  Committee or its designee with such  information  and to execute
such  documents  and other  instruments  as may be  reasonably  requested by the
Administrative   Committee  in  connection   with   approving   the  loan.   The
Administrative   Committee  shall  establish   nondiscriminatory   standards  in
accordance with the Code and the Act which shall be uniformly  applicable to all
Participants similarly situated and shall govern the Administrative  Committee's
approval  or  disapproval  of a completed  application.  The terms for each loan
shall be set  solely in  accordance  with  such  standards.  The  Administrative
Committee  shall  determine,  in its  sole  discretion  and in  accordance  with
applicable law, whether the application for a loan is to be approved.  In making
its  determination,  the  Administrative  Committee may consider the applicant's
creditworthiness,  financial need and any other commercially reasonable factors,
however,  all  applications  for  loans  shall be  evaluated  in a  uniform  and
nondiscriminatory  manner.  Notwithstanding  any other provision of this Section
6.4,


<PAGE>

a Participant shall not be permitted to have more than one loan outstanding from
the Plan at any time.

          (b) The amount of any loan granted to a Participant, together with the
aggregate  outstanding  balance  (determined as of the date the loan is made) of
all previous loans to the  Participant  under the Plan may not exceed the lesser
of:

               (i)  $50,000, reduced by the excess (if any) of:

                    (A) the highest  outstanding  balance of loans from the Plan
               to the  Participant  during the one year period ending on the day
               before the date on which such loan is made, over

                    (B) the  outstanding  balance  of loans from the Plan to the
               Participant on the date on which such loan is made, or

               (ii) 50% of his Vested Interest in his Account.

          For purposes of this Section 6.4(b),  valuation of the Vested Interest
of the  Participant  shall be made as of the  Valuation  Date which next  occurs
after the submission of a loan request.

          (c)  Notwithstanding  anything in Section (b) to the contrary,  (i) no
loan shall be made in a  principal  amount of less than $1,000 and shall be made
in increments of $100,  (ii) no loan shall be granted to any  Participant  whose
total  Account  balance at the time of the loan  request is less than $2,500 and
(iii) the Administrative Committee may require reduction of the principal amount
of any loan if  repayment  of the loan as provided  in Section (e) hereof  would
require reduction of the Participant's payroll by more than 15%.

          (d)  A  loan  shall  be  deemed  an   investment   of  the   borrowing
Participant's  Account and shall not reduce the amount  credited to his Account.
The amount of


<PAGE>

the  loan  shall  be  deemed  an  investment  of  the   Participant's   Employer
Contribution Account,  Compensation  Reduction Contribution Account and Rollover
Contribution  Account in the ratio that each such account  bears the total value
of  the  Participant's  Account  on  the  day  the  proceeds  of  the  loan  are
distributed.  A  Participant  shall be  responsible  for the payment of all fees
associated with the granting of a loan.

          (e) Loan  proceeds  shall be taken from,  and  repayments of principal
and/or interest shall be credited to, a Participant's  Account, in proportion to
his investment elections then in effect.

          (f) The Administrative  Committee or its designee shall, in accordance
with its  established  standards,  review and approve or  disapprove a completed
application as soon as practicable after its receipt thereof, and shall promptly
notify the applicant of such approval or disapproval.

          (g) All loans  shall  bear a rate of  interest  commensurate  with the
interest  rates  charged by persons in the  business of lending  money for loans
which  would  be  made  under  similar  circumstances,   as  determined  by  the
Administrative Committee,  which rate shall remain in effect for the term of the
loan. The term of the loan shall be fixed by the Administrative Committee at the
time  the loan is made and  shall  not be  extended.  All  loans  shall be for a
minimum  term of one year and must be in one  year  increments.  A loan  must be
repaid  within a maximum of five  years.  A  Participant  may repay all (but not
part) of any loan without penalty by payment of the outstanding principal amount
thereof,  plus unpaid accrued  interest to the date of repayment.  Regardless of
its original maturity, the outstanding principal amount of any loan, and accrued
interest thereon, shall become immediately due and must be paid within 30


<PAGE>

days following the date a Participant's  employment with the Employer terminates
for any reason whatsoever.

          (h) All loans made to Participant shall be repaid by payroll deduction
under a fixed  schedule,  as  determined  by the  Administrative  Committee,  in
substantially  equal  installments  consisting  of level  amortized  payments of
principal  and  interest  at  least  quarterly.   Such  installments   shall  be
appropriately  adjusted in the event of a change in payroll  frequency but shall
not otherwise be modified while the loan is outstanding.  Loan repayments  other
than by payroll  deduction  will be permitted (i) by a Participant  on an unpaid
authorized  leave of absence in accordance  with a fixed schedule  determined by
the Administrative  Committee and (ii) by a Participant who elects to prepay his
loan in full.  Withholding of loan repayments from a Participant's  payroll will
commence  as of the  next day on  which  the  Participant  receives  payment  of
Compensation from an Employer following the date on which the applicable loan is
made.  Loan  repayments  will be  suspended  under the Plan as  permitted  under
Section 414(u)(4) of the Code.

          (i) As security for repayment of each loan made to a Participant, such
Participant shall pledge that portion of his Vested Interest in his Account (but
in no event more than  one-half  of such  Participant's  Vested  Interest in his
Account) equal to the  outstanding  loan, and such other  collateral as may from
time to time be  required  by  controlling  law or  Regulation.  In the  event a
Participant  defaults on his  obligation to repay his loan,  the Trustee may, at
the direction of the Administrative Committee, foreclose on such security to the
extent such Participant would be entitled to withdraw the amount foreclosed from
his Account.  Upon termination of a Participant's  employment with the Employer,
the value of the  distributable  benefit of his Vested  Interest  in his Account
shall be reduced by the amount of any unpaid


<PAGE>

principal  balance of the loan plus interest accrued to the date of termination;
provided,  however,  that a Participant who has elected to defer distribution of
his Plan benefit until any time up to his Normal  Retirement  Date may repay the
loan from other  sources  provided  such  repayment is effected no later than 30
days after the date of  termination  of his  employment or such longer period as
the  Administrative  Committee  may  determine  to be  appropriate  in its  sole
discretion.

          (j) Each loan shall be evidenced by a promissory  note executed by the
Participant,  payable  to the  Trustee in such form as may be  specified  by the
Administrative Committee.

          (k) The right to receive loan repayments,  including interest thereon,
shall be  considered  an asset of the Plan and all loan  repayments of principal
and interest  shall be credited to the Investment  Funds in the same  proportion
that the  Participant's  future  contributions are allocated on the date of such
repayment.

          (l)  Outstanding  loans  shall  share  in Plan  expenses  in a  manner
determined by the Administrative  Committee.  The Administrative Committee shall
apply these rules on a uniform and nondiscriminatory basis.

          (m) Notwithstanding  anything in this Section 6.4 to the contrary,  to
the extent required by law and under such rules as the Administrative  Committee
shall adopt,  loans shall be made available on a reasonably  equivalent basis to
any  Beneficiary or former  Employee (i) who maintains an Account  balance under
the Plan and (ii) who is a  party-in-interest  (within  the  meaning  of Section
(3)(14) of the Act) with respect to the Plan.

          The  Administrative   Committee  may  amend  these  rules,   including
amendments that affect  outstanding  loans, as may be required from time to time
to conform to applicable law or regulation or at its sole discretion.


<PAGE>


         SECTION 7. VALUATIONS AND MAINTENANCE OF PARTICIPANTS' ACCOUNTS

          7.1 As of each Valuation Date, the Trust Fund shall be valued pursuant
to the terms of the Trust to reflect the effect of income  received and accrued,
realized and unrealized  profits and losses,  and all other  transactions of the
preceding  period.  Such  valuation  shall be  conclusive  and binding  upon all
persons  having an interest in the Trust Fund. The Trustee shall value the Trust
Fund at its fair  market  value as of the close of  business  on the last day of
each Plan Year. As soon as practicable after such valuation, but in no case more
than two months after the end of such Plan Year,  the Trustee  shall  deliver in
writing  to the  Investment  Committee  a  certified  report  of such  valuation
together  with a  statement  of the  amount  of net  income  or loss,  including
appreciation or depreciation in value of trust  investments,  since the previous
valuation.

          7.2  All  contributions   made  on  behalf  of,  or  allocated  to,  a
Participant  shall be  credited  to his  Account.  The value of a  Participant's
Account shall be determined by aggregating the value of his separate  interests,
if any, in each Investment Fund.  Except to the extent  otherwise  determined by
the  Administrative  Committee  with  respect to payments  from a  Participant's
Compensation Reduction Contribution Account,  Employer Contribution Account, and
Rollover  Contribution  Account,  adjustments,  charges  or  allocations  to the
Participant's Compensation Reduction Contribution Account, Employer Contribution
Account,  or  Rollover  Contribution  Account  shall be made by  adding  to,  or
deducting  from,  as the case may be, the  Compensation  Reduction  Contribution
Account,  Employer  Contribution  Account, or Rollover Contribution Account such
proportion  of any  adjustment  or  charge  as the  amount  in the  Compensation
Reduction  Contribution  Account,  Employer  Contribution  Account,  or Rollover
Contribution  Account as of the last preceding Valuation Date bears to the total
amount in the  Participant's  Account as of such  preceding  Valuation  Date. In
making such adjustments or


<PAGE>

charges, the Administrative Committee may conclusively rely on the valuations of
the Trust Fund by the Trustee and in  accordance  with the Plan and the terms of
the Trust.

          7.3 The  Administrative  Committee  shall have complete  discretion to
establish and utilize an accounting  system to account for the interests of each
Participant.  To the  extent  permitted  by the  Code and IRS  Regulations,  the
Administrative Committee may change the accounting system from time to time.

          7.4 The expenses of administering the Plan, including (i) the fees and
expenses of (1) any Employee, (2) the Trustee and (3) any Investment Manager for
the performance of their duties under the Plan and the Trust,  (ii) the expenses
incurred by the members of the  Administrative  Committee and of the  Investment
Committee  in  the  performance  of  their  duties  under  the  Plan  (including
reasonable  compensation for any legal counsel,  certified  public  accountants,
consultants,  and agents and cost of services  rendered in respect of the Plan),
and (iii) all other proper charges and  disbursements  of the Trustee or members
of either the Administrative  Committee or the Investment  Committee  (including
settlements  of claims or legal actions  approved by counsel to the Plan) may be
paid out of the Trust Fund, and allocated to and deducted from the Participants'
Accounts by the  Administrative  Committee in accordance  with the provisions of
Section 7.2 above, if the Company does not pay such expenses directly.

          7.5 Brokerage fees,  transfer taxes and any other expenses incident to
the  purchase or sale of  securities  by the Trustee may be deemed to be part of
the cost of such securities, or deducted in computing the proceeds therefrom, as
the case may be. Taxes, if any, of any and all kinds whatsoever which are levied
or  assessed  on any assets  held or income  received  by the  Trustee  shall be
allocated  to  and  deducted   from  the   Accounts  of   Participants   by  the
Administrative Committee in accordance with the provisions of Section 7.2 above.


<PAGE>

          7.6 As of the last day of each Plan Year, except as otherwise provided
herein,  any  forfeitures  arising under the Plan during such Plan Year shall be
allocated by the Administrative  Committee to Participants' Accounts in the same
manner as contributions provided in Section 5.1(c) above.


<PAGE>

                       SECTION 8. ELIGIBILITY FOR BENEFITS

          8.1 (a) Upon the death of a  Participant,  benefits equal to the value
of the  Participant's  Account as of the Valuation Date  coincident with or next
following  the date of his death  shall be  payable to the  Beneficiary  of such
Participant  (as  determined  in  Section  11)  from the  Trust  by a method  of
distribution  described and at the time  specified in Section 10;  provided that
the  Administrative  Committee  has  received all the  necessary  forms from the
Beneficiary.

          (b) If a former Employee who was a Participant  dies before payment of
the full value of his Account from the Trust Fund,  an amount equal to the value
of the unpaid portion  thereof as of the Valuation Date  coincident with or next
following the date of his death shall be paid to the  Beneficiary of such former
Participant  (as  determined  under Section 11) in  accordance  with a method of
distribution  described and at the time  specified in Section 10;  provided that
the  Administrative   Committee  has  received  all  necessary  forms  from  the
Beneficiary.

          8.2 Upon termination of a Participant's Service on or after his Normal
Retirement  Date or by reason of his Disability and subject to Sections 10.2 and
10.4,  a  benefit  equal to the  value of the  Participant's  Account  as of the
Valuation Date  coincident  with or next following the date on which his Service
is   terminated   shall  be  paid  from  the  Trust  Fund;   provided  that  the
Administrative   Committee  has  received  all  the  necessary  forms  from  the
Participant.  Such payment shall be made by a method of  distribution  described
and at the time specified in Section 10.

          8.3 Upon the  termination of Service of any  Participant  which occurs
other than on his Normal  Retirement  Date or for any reason other than death or
Disability and subject to Sections 10.2 and 10.4, the Participant  shall be paid
an amount equal to the value of his Account


<PAGE>

as of the Valuation Date  coincident with the date on which his Account is paid,
of the sum of the Participant's (i) Compensation Reduction Contribution Account,
(ii) Vested Interest (as determined in Section 9.2) in his Employer Contribution
Account, and (iii) Rollover  Contribution  Account;  provided the Administrative
Committee  receives  all of the  necessary  forms  from  the  Participant.  Such
distribution  shall  be made at the time  specified  in  Section  10 by a method
described in Section 10. Any excess of the amount credited to such Participant's
Employer  Contribution Account over his Vested Interest in such Account shall be
forfeited and used to reduce Employer Contributions pursuant to Section 5.1(c).

          8.4  Notwithstanding  the  foregoing,  a  Participant's   Compensation
Reduction  Contribution  Account and that portion of his  Employer  Contribution
Account that is attributable to Employer  Contributions made pursuant to Section
5.1(a) may not be distributed earlier than upon one of the following events:

               (a)  The   Participant's   retirement,   death,   Disability   or
                    termination of Service;

               (b)  The  termination  of the Plan without the  establishment  or
                    maintenance of another defined contribution plan (other than
                    an  employee  stock  ownership  plan as  defined  in Section
                    4975(e)(7)  of the  Code or a  simplified  employee  plan as
                    defined in Section 408(k)(1)(A) of the Code);

               (c)  The Participant's attainment of age 591/2; or

               (d)  The sale or  disposition  by the  Employer  to an  unrelated
                    corporation of (i) at least 85 percent of the assets used by
                    the  Employer  in a  trade  of  business  to an  entity  not
                    required after such disposition to


<PAGE>

                    be aggregated with the Employer  pursuant to Section 414(b),
                    (c), (m), or (o) of the Code,  where the Employer  continues
                    to maintain the Plan after such disposition, and solely with
                    respect to Employees  who,  subsequent to such  disposition,
                    continue  employment with the entity  acquiring such assets,
                    or (ii) the Employer's interest in a subsidiary to an entity
                    not required after such  disposition  to be aggregated  with
                    the Employer pursuant to Section 414(b),  (c), (m) or (o) of
                    the Code, where the Employer  continues to maintain the Plan
                    after such disposition, and solely with respect to Employees
                    who,  subsequent to such  disposition,  continue  employment
                    with such subsidiary.

          8.5  Notwithstanding any other provisions of the Plan to the contrary,
the Service of a Participant who was employed by OMI Corp. on June 17, 1998, and
who  thereafter  is not  employed  by an  Employer,  shall not be deemed to have
terminated for purposes of this Section 8 unless and until his  employment  with
OMI Corp., or any successor  thereto,  or any subsidiary of or other corporation
or entity affiliated or associated with OMI Corp. or any such successor which is
a member of the same  controlled  group of  corporations  (within the meaning of
Section 1563(a) of the Code), terminates after such date.


<PAGE>


                               SECTION 9. VESTING

          9.1 At all times, each Participant  shall have a nonforfeitable  right
to 100% of the value of his Compensation  Reduction  Contribution  Account,  his
ESOP Account, and his Rollover Contribution Account, if any.

          9.2 A  Participant  shall be 100% vested in his Employer  Contribution
Account at all times.

          9.3 In the  case  of any  Participant  who  has a one  year  Break  in
Service,  to the extent  permitted by law,  Years of Service  shall not be taken
into account until such Participant has completed one Year of Service after such
Break in Service.

          9.4 In the  case of a  Participant  who has  five or more  consecutive
one-year  Breaks in Service,  all Service  after such Breaks in Service  will be
disregarded for purposes of determining the Participant's Vested Interest in his
Employer Contribution Account that accrued prior to the first day of such Breaks
in Service.  Such Participant's  Service prior to such Breaks in Service will be
taken into account with regard to determining the Participant's  Vested Interest
in his Employer  Contribution  Account which accrues after the Breaks in Service
if either:

               (a)  such  Participant  has any  nonforfeitable  interest  in the
                    Account  (other than his Rollover  Account) on the first day
                    of his Break in service; or

               (b)  upon his return to Service, the number of one-year Breaks in
                    Service is less than his number of Years of Service.

          9.5 Notwithstanding  the foregoing,  a Participant or his Beneficiary,
whichever  is  appropriate,  shall be fully  vested in the  entire  value of the
Participant's Account upon the


<PAGE>

Participant's  attainment of his Normal Retirement Age, Early Retirement Age, or
upon such Participant's Disability or death.


<PAGE>

                    SECTION 10. METHOD OF PAYMENT OF BENEFITS

          10.1 Any benefit  payable under Section 8 of the Plan shall be paid as
soon as  practicable  following  the  occurrence  of an event  giving  rise to a
Participant's   eligibility  for  such  benefit,   provided  the  Administrative
Committee receives all of the necessary forms from such Participant, in one lump
sum payment in cash, property, or a combination of cash and property, as elected
by the Participant,  from the Trust Fund, provided,  however, that, effective as
of July  1,  2000,  if any  portion  of  such  benefit  is  invested  in the OMI
Corporation  Stock Fund, then the Participant may elect to receive any or all of
such portion  invested in the OMI Corporation  Stock Fund in the number of whole
OMI Corporation Shares in his account, with cash paid for any fractions shares.

          10.2 (a)  Notwithstanding  any other  provision  of the  Plan,  unless
otherwise  provided by law, any benefit  payable to a  Participant  (i) who is a
five percent  owner (as such term is defined in Section  416(i)(1)(B)(i)  of the
Code) shall commence not later than the April 1st of the calendar year following
the calendar year in which such Participant  attains age 70 1/2, (ii) other than
a five percent  owner,  shall  commence not later than April 1st of the calendar
year  following  the later of (1) the  calendar  year in which  the  Participant
attains age 70 1/2 or (2) the calendar year in which the Participant  terminates
employment with the Employer. Such benefit shall be paid, in accordance with IRS
Regulations, in one lump sum payment in cash, property, or a combination of cash
and property, as elected by the Participant.

          (b) If distribution of a Participant's  benefit has commenced prior to
a Participant's  death,  and such  Participant dies before his entire benefit is
distributed to him,  distribution of the remaining  portion of the Participant's
benefit to the Participant's Beneficiary


<PAGE>

shall be made at least as rapidly as under the method of  distribution in effect
as of the date of the Participant's death.

          (c) If a  Participant  dies  before  distribution  of his  benefit has
commenced,  distributions  to any  Beneficiary  shall  be made in one  lump  sum
payment in cash,  property or a combination of cash and property,  as elected by
the  Participant,  on or before the  December  31st of the  calendar  year which
contains the fifth  anniversary of the date of such  Participant's  death.  Such
distribution  shall  commence not later than the  December  31st of the calendar
year  immediately  following the calendar year in which the Participant died or,
in the event such  Beneficiary  is the  Participant's  Surviving  Spouse,  on or
before the December  31st of the calendar year in which such  Participant  would
have  attained  age 70 1/2,  if later  (or,  in either  case,  on any later date
prescribed by IRS  Regulations).  If such  Participant's  Surviving  Spouse dies
after the Participant's death but before  distributions to such Surviving Spouse
commence,  this  Section  10.2(c)  shall be applied  to  require  payment of any
further benefits as if the Surviving Spouse were the Participant.

          (d) Pursuant to IRS Regulations,  any benefit paid to a child shall be
treated  as if paid to a  Participant's  Surviving  Spouse if such  amount  will
become  payable  to such  child  on the  child's  attaining  majority,  or other
designated event permitted by IRS Regulations.

          (e) If a  Participant  who is a five  percent  owner  attained  age 70
1/2before  January 1,  1988,  any  benefit  payable  to such  Participant  shall
commence no later than the April 1st of the calendar year following the later of
(i) the calendar  year in which the  Participant  attains age 70 1/2 or (ii) the
earlier of (A) the  calendar  year within which the  Participant  becomes a five
percent owner or (B) the calendar  year in which the  Participant  retires.  For
purposes of this Section 10.2(e), a five percent owner shall mean a five percent
owner of such Participant's

<PAGE>

Employer  as defined in Section  416(i) of the Code at any time  during the Plan
Year in which such owner attains age 66 1/2 or any subsequent Plan Year.

          (f) All distributions  made hereunder shall be made in accordance with
the provisions of Section 401(a)(9) of the Code and IRS Regulations  thereunder,
including  such other guidance as may be issued by the IRS under such Section of
the Code.

          (g) With  respect to  distributions  under the Plan made for  calendar
years  beginning  on or after  January 1, 2001,  the Plan will apply the minimum
distribution  requirements  of Code  Section  401(a)(9) in  accordance  with the
Regulations under Code Section 401(a)(9) that were proposed on January 17, 2001,
notwithstanding any provision in the Plan to the contrary.  This Section 10.2(g)
shall  continue  in effect  until the end of the last  calendar  year  beginning
before the effective date of the final  Regulations under Code Section 401(a)(9)
or such other date as may be specified in guidance published by the IRS.

          10.3 Subject to Section 10.4, payments shall be made no later than the
60th day  following  the date on which the amount of the payment  under the Plan
(or in the  case of more  than one  payment,  the  first  said  payment)  can be
ascertained under the Plan.

          10.4  Notwithstanding  any other  provision of the Plan, to the extent
required by the Code and IRS  Regulations,  (i) if the value of a  Participant's
Account does not exceed (or, for  distributions  made before March 22, 1999,  at
the time of any prior  distribution  exceeded)  $5,000 (or,  effective  prior to
January 1, 1998,  $3,500),  a distribution may be made to such Participant prior
to the date he attains his Normal Retirement Age without his written consent and
(ii) if the value of a Participant's Account exceeds (or, for distributions made
before March 22, 1999, at the time of any prior  distribution  exceeded)  $5,000
(or, effective prior to January 1, 1998, $3,500), no distribution may be made to
such Participant prior to the date he attains his Normal


<PAGE>

Retirement  Age without his written  consent.  In the absence of receipt of such
consent by the Administrative Committee prior to the 60th day following the date
of the  Participant's  termination  of  Service,  payment of the benefit to such
Participant  shall  commence  as soon as  practicable  after  the  Participant's
attainment of Normal  Retirement  Age, which benefit shall be in an amount equal
to the value of the Participant's distributable Account as of the Valuation Date
coincident with or immediately following the Participant's  attainment of Normal
Retirement  Age and,  during the period of  deferral  mandated by the absence of
receipt of consent,  the Participant  may change his investment  direction under
Section 6.2(c).

          10.5 Unless the Participant elects otherwise,  the payment of benefits
under the Plan  shall  commence  not later than the 60th day after the latest of
the close of the Plan Year in which (i) the  Participant  obtains  age 65,  (ii)
occurs the 10th anniversary of the year the Participant commenced  participation
under the Plan, and (iii) the Participant terminates employment with the Company
or an Affiliate.

          10.6 A Distributee may elect,  at a time and manner  prescribed by the
Administrative   Committee,   to  have  any  portion  of  an  Eligible  Rollover
Distribution  paid  directly to an Eligible  Retirement  Plan  specified by such
Distributee in the form of a Direct  Rollover.  However,  a Distributee  may not
elect to make a Direct Rollover if the total Eligible Rollover  Distributions to
which the  Distributee  is  entitled  during the  calendar  year  equal,  or are
reasonably  expected to equal,  less than $200. A  Distributee  may not elect to
make a Direct  Rollover of any portion of an Eligible  Rollover  Distribution if
that portion is not at least $500 or more. A  Distributee  may not make a Direct
Rollover of less than the entire amount of an Eligible Rollover  Distribution if
the entire Eligible Rollover Distribution equals less than $500.


<PAGE>

          10.7  Notwithstanding any other provision of the Plan, no distribution
may  be  made  to  a  Participant  unless  the  Participant  receives  from  the
Administrative  Committee an officially approved tax notice (pursuant to Section
402(f)  of the Code  and IRS  Regulations  issued  thereunder)  which  specifies
certain information  regarding the federal income tax treatment of Plan benefits
paid in the form of a lump sum payment in cash,  property,  or a combination  of
cash and property,  as elected by the  Participant,  no less than 30 days and no
more  than  90  days  before  the  date  benefits  are to be  distributed.  Such
distribution  may commence less than 30 days after the required notice is given;
provided that (i) the  Administrative  Committee clearly informs the Participant
that the Participant has a right to a period of at least 30 days after receiving
the notice to consider the  decision of whether or not to elect a  distribution,
and (ii) the  Participant,  after receiving the notice,  affirmatively  elects a
distribution.

<PAGE>
                    SECTION 11. DESIGNATION OF BENEFICIARIES

          11.1 Each Participant shall file with the  Administrative  Committee a
written  designation of one or more persons (which may include the Participant's
spouse) as the Beneficiary who shall be entitled to receive the amount,  if any,
payable  under the Plan upon his death.  Subject to Section  11.2, a Participant
may from time to time revoke or change his Beneficiary  designation  without the
consent  of  any  prior  Beneficiary  by  filing  a  new  designation  with  the
Administrative Committee.  Notwithstanding the foregoing or anything in the Plan
to the contrary,  if the Participant is married,  his spouse must consent to the
designation of a Beneficiary other than the  Participant's  spouse in accordance
with this  Section  11.1 (unless the  Administrative  Committee  makes a written
determination  in  accordance  with the Code  and IRS  Regulations  that no such
consent  is  required).  No such  designation  of a  Beneficiary  other than the
Participant's  spouse shall be effective unless:  (i) the  Participant's  spouse
consents  in  writing  to the  designation;  (ii) the  designation  specifies  a
Beneficiary,   including   any  class  of   Beneficiaries   or  any   contingent
Beneficiaries,  which may not be  changed  without  spousal  consent;  (iii) the
spouse's  consent  acknowledges the effect of the election and (iv) the spouse's
consent is witnessed by a notary public.  The last such designation  received by
the Administrative  Committee shall be controlling,  provided,  however, that no
designation, or change or revocation thereof, shall be effective unless received
by the  Administrative  Committee prior to the  Participant's  death,  and in no
event shall it be effective as of a date prior to such receipt.

          11.2 If a married Participant whose spouse is his Beneficiary divorces
such  spouse  and  subsequently  remarries,  his  spouse  with  respect  to such
subsequent  marriage shall automatically be deemed to be his Beneficiary for the
duration of such marriage, unless (i) the


<PAGE>

Participant  files  with the  Administrative  Committee  a  written  Beneficiary
designation  that effectively  designates a Beneficiary  other than such spouse,
and such spouse  consents to such  designation in accordance  with the rules set
forth in Section 11.1, or (ii) a Qualified  Domestic  Relations  Order  provides
that an  ex-spouse  with respect to such  Participant  shall be deemed to be his
Beneficiary.

          11.3 If no such Beneficiary  designation is in effect at the time of a
Participant's  death, or if no designated  Beneficiary survives the Participant,
the Participant shall be deemed to have designated his Surviving Spouse, if any,
as  Beneficiary,  or if  the  Participant  has no  Surviving  Spouse,  then  the
following  persons (if then  living) in the  following  order of  priority:  (i)
children,  in equal  shares,  (ii) parents,  in equal shares,  (iii) the persons
designated as  beneficiary  under the group life insurance plan of the Employer,
and (iv) the Participant's  estate. If the Administrative  Committee is in doubt
as to the  right of any  person  to  receive  such  amount,  the  Administrative
Committee  may direct the Trustee to retain such amount,  without  liability for
any  interest  thereon,  until  the  rights  thereto  are  determined,   or  the
Administrative  Committee  may direct the  Trustee to pay such  amount  into any
court of appropriate jurisdiction and such payment shall be a complete discharge
of the liability of the Plan and the Trust therefor.


<PAGE>

                     SECTION 12. ADMINISTRATION OF THE PLAN

          12.1 The  Administrative  Committee shall have general  responsibility
and   discretionary   authority  for  the   administration,   establishment  and
interpretation  of the  Plan  (including  but  not  limited  to  complying  with
reporting  and  disclosure  requirements,   establishing  and  maintaining  Plan
records,  adopting  amendments to the Plan as described in Section 14,  deciding
all questions arising in connection with the Plan including eligibility, benefit
payments,  vesting and factual  questions).  The Administrative  Committee shall
engage  such  certified  public  accountants,  who  may be  accountants  for the
Company, as it shall require or may deem advisable for purposes of the Plan. The
Administrative Committee shall administer the Plan in accordance with its terms,
and shall have all powers  necessary to carry out the provisions of the Plan not
otherwise  reserved to the Company,  an Employer,  the Board of Directors or the
Trustee.  The  Administrative  Committee shall have all powers to administer the
Plan,  within its  discretion,  other than the power to invest or  reinvest  the
assets  of the  Plan to the  extent  such  powers  have  been  delegated  to the
Investment Committee, the Trustee, an insurance company and/or an asset manager.
The  Administrative  Committee  shall  have  total and  complete  discretion  to
interpret the Plan and to determine all questions arising in the administration,
interpretation  and  application of the Plan including the power to construe and
interpret  the  Plan;  to  decide  the  questions  relating  to an  individual's
eligibility to participate in the Plan and/or  eligibility  for benefits and the
amounts thereof; to have fact finder discretionary authority to decide all facts
relevant to the determination of eligibility for benefits or  participation;  to
make  such  adjustments  as it deems  necessary  or  desirable  to  correct  any
arithmetical or accounting  errors; to determine the amount,  form and timing of
any distribution to be made hereunder; to approve and enforce any loan hereunder
including  the  repayment  thereof,  as well as to  resolve  any  conflict.  The
Administrative


<PAGE>

Committee  shall have the discretion to make factual  determinations  as well as
decisions and  determinations  relating to the amount and manner of  allocations
and  distributions  of benefits.  In making its  decisions,  the  Administrative
Committee shall be entitled to, but need not rely upon,  information supplied by
a  Participant,   Beneficiary  or  representative  thereof.  The  Administrative
Committee  shall  have  full and  complete  discretion  to  determine  whether a
domestic  relations order constitutes a Qualified Domestic Relations Order under
applicable  law and whether  the  putative  alternate  payee under such an order
otherwise  qualifies for benefits  hereunder.  The Administrative  Committee may
correct any defect,  supply any omission or reconcile any  inconsistency in such
manner and to such extent as it shall deem  necessary  to carry out the purposes
of the Plan. The  Administrative  Committee's  decision in such matters shall be
binding and  conclusive as to all parties.  In carrying out its functions  under
the Plan, the Administrative Committee shall endeavor to act by general rules so
as to  administer  the Plan in a  uniform  and  nondiscriminatory  manner to all
persons similarly situated.  The Administrative  Committee shall communicate any
requirements and objectives of the Plan, and any audit  information which may be
pertinent to the  investment of Plan assets to the Investment  Committee,  which
shall  establish  investment  standards and policies and communicate the same to
the Trustee (or other funding agencies under the Plan).

          12.2 The Investment Committee shall periodically review the investment
performance and methods of the Trustee and any other funding  agency,  including
any insurance company,  under the Plan, and may appoint and remove or change the
Trustee and any such funding  agency.  The Investment  Committee  shall have the
power to appoint or remove one or more  Investment  Managers  and to delegate to
such  Investment  Manager the authority and discretion to manage  (including the
power to acquire and dispose of) the assets of the Plan,


<PAGE>

provided that (i) each  Investment  Manager with such  authority and  discretion
shall be either a bank, an insurance company or a registered  investment adviser
under the Investment Advisers Act of 1940, and shall acknowledge in writing that
it is a fiduciary  with  respect to the Plan and (ii) the  Investment  Committee
shall  periodically  review  the  investment  performance  and  methods  of each
Investment Manager with such authority and discretion.

          12.3 Both the  Administrative  Committee and the Investment  Committee
(collectively  the  "Committees")  may arrange for the  engagement of such legal
counsel  who may be counsel  for the  Company,  and make use of such  agents and
clerical or other personnel as they each shall require or may deem advisable for
purposes of the Plan.  Each of the Committees may rely upon the written  opinion
of such counsel and the accountants  engaged by either of the Committees and may
delegate to any such agent or to any  subcommittee  or member of such  Committee
its authority to perform any act hereunder, including, without limitation, those
matters  involving the exercise of discretion  (including the  appointment of an
Investment  Manager),   provided  that  such  delegation  shall  be  subject  to
revocation at any time at the discretion of such Committee. The Committees shall
report to the Board of  Directors,  or to a committee  of the Board of Directors
designated for that purpose,  no less  frequently than at each annual meeting as
shall be specified by the Board of Directors,  or such  committee with regard to
the Board of Directors the matters for which it is responsible under the Plan.

          12.4 The Administrative  Committee and the Investment  Committee shall
each  consist of at least three  members,  each of whom shall be  appointed  by,
shall  remain in  office at the will of,  and may be  removed,  with or  without
cause,  by the Board of Directors.  Any member of either of the  Committees  may
resign at any time. No member of either of the  Committees  shall be entitled to
act on or decide any matter relating solely to himself or any of his rights or

<PAGE>

benefits under the Plan. The members of the Administrative  Committee and of the
Investment  Committee shall not receive any special  compensation for serving in
their  capacities as members of such  Committees but shall be reimbursed for any
reasonable  expenses  incurred  in  connection  therewith.  Except as  otherwise
required  by the  Act,  no bond  or  other  security  need  be  required  of the
Administrative  Committee or the  Investment  Committee or any member thereof in
any  jurisdiction.  Any person may serve on both  Committees,  and any member of
either  the  Committee,  any  subcommittee  or  agent to whom  either  Committee
delegates any authority,  and any other person or group of persons, may serve in
more than one  fiduciary  capacity  (including  service  both as a  trustee  and
administrator) with respect to the Plan.

          12.5 The Administrative  Committee and the Investment  Committee shall
elect or designate its own Chairman,  establish its own  procedures and the time
and place for its  meetings,  and  provide  for the  keeping  of  minutes of all
meetings. A majority of the members of a Committee shall constitute a quorum for
the  transaction  of  business at a meeting of such  Committee.  Any action of a
Committee may be taken upon the affirmative vote of a majority of the members of
the  Committee  at a meeting or, at the  direction  of its  Chairman,  without a
meeting, by mail, telegraph,  telex, telecopier or telephone,  provided that all
of the members of the  Committee  are  informed by mail,  telex,  telecopier  or
telegraph  of their right to vote on the proposal and of the outcome of the vote
thereon.

          12.6 All  demands  for money of the Plan shall be signed by an officer
or officers or such other person or persons as the Administrative  Committee may
from time to time  designate  in  writing  who  shall  cause to be kept full and
accurate  accounts of receipts and  disbursements of the Plan, shall cause to be
deposited  all funds of the Plan to the name and  credit  of the  Plan,  in such
depositories as may be designated by the Investment Committee, shall cause


<PAGE>

to be  disbursed  the  monies  and funds of the Plan when so  authorized  by the
Administrative Committee and shall generally perform such other duties as may be
assigned to him from time to time by either of such the Committees.

          12.7 The Company has entered into the Trust Agreement with the Trustee
providing for the  administration  and management of the Trust Fund. The Trustee
shall have  responsibility  under the Plan for the management and control of the
assets of the Plan. All benefits and other amounts  payable  hereunder  shall be
paid  exclusively  from the Trust Fund, and neither the Company,  any Affiliate,
any Trustee, nor any director, officer, Employee or agent of the Company assumes
any responsibility or liability  therefor.  The Trust Fund may be commingled for
investment purposes with like separate trust funds of any other plans and trusts
of the Company or any Affiliate  which meet the  requirements of Sections 401(a)
and 501(a) of the Code. Each Participant,  each Beneficiary or each other person
who shall claim the right to any payment  under the Plan shall look  exclusively
to the Trust  Fund  therefor  and  shall  not have any  right or claim  therefor
against the Company,  any Participating  Company,  any Trustee, or any director,
officer,  Employee or agent of the Company.  Except as otherwise required by the
Act, neither the Company, nor any member of the Administrative  Committee or the
Investment Committee,  any director,  officer,  Employee or agent of the Company
shall be required to inquire  into or be  responsible  for any act or failure to
act of any Trustee or any  Participant.  To the maximum extent  permitted by the
Act and applicable  state law, each Trustee,  each member of the  Administrative
Committee  and the  Investment  Committee,  each  director  and  officer  of the
Company,  any  Participating  Company and each Employee who performs  service on
behalf of the Plan or the Trust,  shall be indemnified and saved harmless by the
Company or by the  Participating  Company out of its own assets  (including  the
proceeds of any insurance policy the


<PAGE>

premiums of which are paid by the Company)  from and against any and all losses,
costs and expense  (including any amounts paid in settlement of a claim with the
Company  or  Administrative  Committee's  approval)  to which any of them may be
subjected by reason of any act done or omitted to be done in good faith in their
official  capacities with respect to the Plan or the Trust Agreement,  including
all expenses reasonably incurred in their defense.

          12.8 All claims for benefits  under the Plan shall be submitted to the
Administrative  Committee  on  such  form  and in  such  manner  (including  any
telephonic or electronic means) as the Administrative Committee may from time to
time  prescribe.  If an Employee,  Participant  or Beneficiary  ("Claimant")  is
denied  benefits under the Plan, the  Administrative  Committee shall notify the
Claimant in writing of the denial of the claim within ninety (90) days after the
claim has been made; provided that, in the event of special circumstances,  such
period may be extended to one hundred and eighty (180) days. In such event,  the
Claimant shall be notified in writing of such  extension.  Such notice shall set
forth the following:

               (a)  the specific reasons for the denial;

               (b)  specific reference to the pertinent Plan provisions on which
                    the denial is based;

               (c)  a description of any material or  information  necessary for
                    the Claimant to perfect the claim and an  explanation of why
                    such material or information is necessary; and

               (d)  appropriate  information  as to the steps to be taken if the
                    Claimant wishes to submit the claim for review.


<PAGE>

               Failure by the Administrative  Committee to provide notice to the
          Claimant  pursuant to the  requirements  of this  Section  12.8 by the
          conclusion  of the ninety (90) day or one hundred and eighty (180) day
          period,  whichever  is  applicable,  shall be  deemed a denial  of the
          Claimant's claim.

          If a Claimant's claim has been denied or deemed denied,  such Claimant
may  request an appeal of the  denial.  Any request for a review must be made in
writing to the  Administrative  Committee  within  sixty (60) days of the notice
referred to in the  immediately  preceding  paragraph  or, if such notice is not
provided  pursuant to the requirements of this Section 12.8, upon the conclusion
of the 90-day or 180-day period, as applicable.  The claim will then be reviewed
by  the   Administrative   Committee.   A  Claimant   or  his  duly   authorized
representative may:

               (i)  review pertinent documents; and

               (ii) submit issues and comments in writing.

          If the  Administrative  Committee deems it appropriate,  it may hold a
hearing as to a claim.  If a hearing is held,  the Claimant shall be entitled to
be represented by counsel. The decision of the Administrative Committee shall be
made  within  sixty (60) days after  receipt of the  request  for review  unless
special  circumstances (such as the need to hold a hearing) require an extension
of time;  in any  event,  such  decision  shall be  rendered  not later than one
hundred and twenty (120) days after  receipt of the request for review.  Written
notice of any special circumstances  requiring an extension shall be sent to the
Claimant.  If the  decision  on review is not sent to the  Claimant  within  the
appropriate time, it shall be deemed denied on review.

          The Administrative Committee may, in its absolute discretion, delegate
any or all of the duties  enumerated in this Section 12.8 to each of the members
of the Board of Directors,


<PAGE>

the  Administrative  Committee or any other person,  including an Employee.  All
interpretations,  determinations and decisions of the  Administrative  Committee
with respect to any claim shall be made by the  Administrative  Committee in its
sole  discretion  based on the Plan and  documents  presented to it and shall be
final, conclusive and binding.

          12.9 Any notice, election,  application,  instruction,  designation or
other  form  of  communication   required  to  be  given  or  submitted  by  any
Participant,  other  Employee  or  Beneficiary  shall  be  in  such  form  as is
prescribed  from  time to time by the  Administrative  Committee  or  Investment
Committee,  sent by first class mail or delivered in person, and shall be deemed
to be duly given only upon actual receipt thereof by such Committee. Any notice,
statement,  report  and other  communication  from the  Company or either of the
Committees  to any  Participant,  other  Employee,  or  Beneficiary  required or
permitted by the Plan shall be deemed to have been duly given when  delivered to
such person or mailed by first  class mail to such  person at his  address  last
appearing on the records of the Company or the  Administrative  Committee.  Each
person  entitled  to receive a payment  under the Plan shall file in  accordance
herewith  his  complete  mailing  address  and each change  therein.  A check or
communication  mailed to any person at his  address on file with the  Company or
the  appropriate  Committee shall be deemed to have been received by such person
for all  purposes of the Plan,  and no Employee  or agent of the  Company,  of a
Participating  Company  or  member  of  the  Administrative   Committee  or  the
Investment Committee shall be obliged to search for or ascertain the location of
any such person except as required by the Act. If the  Administrative  Committee
shall be in doubt as to  whether  payments  are  being  received  by the  person
entitled  thereto,  it may, by registered  mail  addressed to such person at his
address last known to the  Administrative  Committee notify such person that all
future payments will be withheld until such person submits to the Administrative
Committee


<PAGE>

his proper  mailing  address and such other  information  as the  Administrative
Committee may reasonably request.

          12.10 Each Participant  shall file with the  Administrative  Committee
such pertinent  information  concerning  himself and his  Beneficiary,  and each
Beneficiary  shall  file  with the  Administrative  Committee  such  information
concerning  himself,  as the Administrative  Committee may specify,  and in such
manner and form as the Administrative  Committee may specify or provide,  and no
Participant or  Beneficiary  shall have any right or be entitled to any benefits
or further benefits under the Plan unless such information is filed by him or on
his behalf.

          12.11 The agent for the service of legal  process of the Plan shall be
the  Secretary  of the Company or such other  person as may from time to time be
designated by the Administrative Committee.

          12.12 Notwithstanding any other provision of the Plan to the contrary,
the  Administrative  Committee's use of information  obtained from any Employee,
Participant or Beneficiary  through the use of a voice response  system or other
electronic  media shall be governed by the  requirements of applicable  guidance
issued by the IRS and, to the extent that any such information  obtained through
the use of a voice response  system or other  electronic  media does not satisfy
the requirements of such guidance,  the  Administrative  Committee shall require
that the information be submitted in written form.

<PAGE>
         SECTION 13. TERMINATION OF PARTICIPATING COMPANY PARTICIPATION

          13.1 Any Participating  Company may terminate its participation in the
Plan by giving the  Administrative  Committee prior written notice  specifying a
termination  date  which  shall  be the  last  day of a month  at  least 60 days
subsequent to the date such notice is received by the Administrative  Committee.
The   Administrative   Committee  may  terminate  any  Participating   Company's
participation  in  the  Plan,  as of  any  termination  date  specified  by  the
Administrative  Committee,  for the failure of the Participating Company to make
proper contributions or to comply with any other provision of the Plan and shall
terminate  a  Participating  Company's  participation  upon  complete  and final
discontinuance of the contributions.  In the event of any such termination,  the
Administrative  Committee  shall  promptly  notify  the  IRS  and  request  such
determination  as counsel to the Plan may  recommend  and as the  Administrative
Committee may deem desirable.

          13.2 Upon  termination  of the Plan as to any  Participating  Company,
such Participating  Company shall not make any further  contributions  under the
Plan and no amount shall  thereafter  be payable under the Plan to or in respect
of any  Participants  then  employed  by such  Participating  Company  except as
provided in this  Section 13. To the maximum  extent  permitted  by the Act, any
rights of Participants no longer employed by such  Participating  Company and of
former Participants and their Beneficiaries and Surviving Spouses under the Plan
shall be unaffected by such  termination  and any  transfers,  distributions  or
other  dispositions  of the assets of the Plan as  provided  in this  Section 13
shall  constitute a complete  discharge of all  liabilities  under the Plan with
respect  to such  Participating  Company's  participation  in the  Plan  and any
Participant then employed by such Participating Company.


<PAGE>

          The   interest  of  each  such   Participant   in  Service  with  such
Participating Company as of the termination date in the amount, if any, credited
to his  Account  after  payment of or  provision  for  expenses  and charges and
appropriate  adjustment of the Accounts of all such  Participants  for expenses,
charges,  forfeitures and profits and losses as described in Section 14.4, shall
be  nonforfeitable  as  of  the  termination  date,  and  upon  receipt  by  the
Administrative  Committee of IRS approval of such termination,  the full current
value of such amount,  shall be paid from the Trust Fund in the manner described
in Section 14.4 or  transferred  to a successor  employee  benefit plan which is
qualified under Section 401(a) of the Code; provided, however, that in the event
of any transfer of assets to a successor employee benefit plan the provisions of
Section 13.3 will apply.

          All  determinations,  approvals  and  notifications  referred to above
shall be in form and  substance  from a source  satisfactory  to counsel for the
Plan. To the maximum extent permitted by the Act, the termination of the Plan as
to any Participating Company shall not in any way affect any other Participating
Company's participation in the Plan.

          The above  Section 13.2 shall cease to apply  effective  June 18, 1998
and the following Section 13.2 shall apply:

          13.2 Upon  termination  of the  participation  of any  Employer in the
Plan, such Employer shall not make any further  contributions under the Plan and
no amount  shall  thereafter  be payable  under the Plan to or in respect of any
Participants  then employed by such Employer  except as provided in this Section
13. To the extent  permitted  by the Act, any rights of  Participants  no longer
employed by such Employer and of former Participants and their Beneficiaries and
Surviving Spouses under the Plan shall be unaffected by such termination and any
transfers, distributions or other dispositions of assets of the Plan as provided
in this Section


<PAGE>

shall  constitute a complete  discharge of all  liabilities  under the Plan with
respect to such Employer's  participation  in the Plan and any Participant  then
employed by such Employer.

          The interest of each such Participant in Service with such Employer as
of the  termination  date in the amount,  if any,  credited to his Account after
payment of or provision for expenses and charges and  appropriate  adjustment of
the Accounts of all such  Participants  for expenses,  charges,  forfeitures and
profits and losses as described in Section 14.4, shall be  nonforfeitable  as of
the  termination  date,  and the full current value of such amount shall be paid
from the Trust Fund in the manner  described  in Section  14.4 or, if elected by
any such  Participant  in writing,  transferred to the trust  established  under
another  employee  benefit plan which is qualified  under Section  401(a) of the
Code in which such  Participant is entitled to  participate,  at the time and in
the  manner,  and  in  accordance  with  such  terms  and  conditions,   as  the
Administrative Committee may prescribe in a nondiscriminatory  manner; provided,
however,  that,  in the event of any  transfer of assets to such other  employee
benefit plan, the provisions of Section 13.3 will apply.

          All  determinations,  approvals  and  notifications  referred to above
shall be in form and substance from a source  satisfactory to the Administrative
Committee  or its counsel,  who may be counsel for the  Company.  To the maximum
extent permitted by the Act, the termination of any Employer's  participation in
the Plan shall not in any way affect any other  Employer's  participation in the
Plan.

          13.3 No transfer of the Plan's assets and  liabilities  to a successor
employee  benefit plan (whether by merger or  consolidation  with such successor
plan or otherwise)  shall be made unless each  Participant  would, if either the
Plan or such successor plan then terminated, receive a benefit immediately after
such transfer which (after taking account of any distributions


<PAGE>

or payments to them as part of the same transaction) is equal to or greater than
the  benefit he would have been  entitled  to receive  immediately  before  such
transfer if the Plan had then been terminated.  The Administrative  Committee or
the  Investment  Committee  or both of the  Committees  may request  appropriate
indemnification  from the employer or employers  maintaining such successor plan
before making such a transfer.

<PAGE>

         SECTION 14. AMENDMENT OR TERMINATION OF THE PLAN AND THE TRUST

          14.1 (a) Subject to the  provisions of Section  14.1(b),  the Board of
Directors reserves the right at any time, by majority consent in writing or by a
meeting, to amend, suspend or terminate the Plan, any contributions  thereunder,
the Trust,  in whole or in part,  for any reason and  without the consent of any
Participating  Company,  Participant,  other Employee,  Beneficiary or Surviving
Spouse or any other person who may have a claim for benefits under the Plan. The
Administrative Committee may adopt amendments, by majority consent in writing or
by  a  meeting,  which  may  be  necessary  or  appropriate  to  facilitate  the
administration, management, or interpretation of the Plan or to conform the Plan
thereto,  or to qualify or  maintain  the Plan and the Trust as a plan and trust
meeting the  requirements of Sections  401(a),  401(k) and 501(a) of the Code or
any other  applicable  section of law (including  the Act) and the  Regulations,
provided that any such amendment  does not  materially  increase the cost to the
Employers of maintaining the Plan. Each Participating Company by its adoption of
the Plan  shall be  deemed  to have  delegated  this  authority  to the Board of
Directors and the  Administrative  Committee.  The Plan shall  automatically  be
terminated upon complete and final discontinuance of contributions thereunder.

          (b)  No   amendment  or   modification   shall  be  made  which  would
retroactively  impair  any  right  to any  benefit  under  the  Plan  which  any
Participant,  Beneficiary  or Surviving  Spouse would  otherwise have had at the
date of such  amendment  by reason  of the  contributions  theretofore  made and
credited to his Account, except as provided in Section 14.2 below.

          14.2  Subject  to the  provisions  of  Section  14.1,  any  amendment,
modification,  suspension or  termination  of any  provisions of the Plan may be
made retroactively if necessary or


<PAGE>

appropriate  to qualify or  maintain  the Plan and the Trust as a plan and trust
meeting the  requirements of Sections  401(a),  401(k) and 501(a) of the Code or
any other  applicable  section of law  (including  the Act) and the  Regulations
issued thereunder.

          14.3 Notice of any amendment, modification,  suspension or termination
of the  Plan  shall be given by the  Board of  Directors  or the  Administrative
Committee,  whichever  adopts the  amendment to the other and to the Trustee and
all  Participating  Companies and,  where and to the extent  required by law, to
Participants and other interested parties.

          14.4 Upon  termination  of the Plan,  the Employer  shall not make any
further  contributions  under the Plan and no amount shall thereafter be payable
under the Plan in respect of any Participant  except as provided in this Section
14. To the maximum  extent  permitted by the Act,  transfers,  distributions  or
other  dispositions  of the assets of the Plan as  provided  in this  Section 14
shall  constitute a complete  discharge of all  liabilities  under the Plan. The
Administrative  and Investment  Committees  shall remain in existence and all of
the provisions of the Plan which in the opinion of the Administrative  Committee
are  necessary  for  the  execution  of the  Plan  and  the  administration  and
distribution,  transfer  or  other  disposition  of the  assets  of the  Plan in
accordance with this Section 14.4 shall remain in force. After (i) payment of or
provision  for all expenses and charges  referred to in Sections 7.4 and 7.5 and
appropriate  adjustment  of all  Accounts  for such  expenses and charges in the
manner  described in Section 7.4 and (ii)  adjustment  for profits and losses of
the Trust to such  termination  date in the manner described in Section 7.2, the
interest of each  Participant  in Service as of the date of such  termination in
the amount,  if any,  credited to his Account shall be nonforfeitable as of such
date.

          The full current value of such adjusted amount, shall be paid from the
Trust to each Participant and former Participant, (or, in the event of the death
of such Participant or


<PAGE>

former  Participant,  the Beneficiary or Surviving Spouse thereof) in any manner
of  distribution  specified in Section 10 above,  including  payments  which are
deferred until the Participant's  termination of Service,  as the Administrative
Committee shall determine in a  nondiscriminatory  manner.  Without limiting the
foregoing,  any such distributions may be made in cash or in property,  or both,
as the Administrative Committee in its sole discretion may direct.

          All  determinations,  approvals  and  notifications  referred to above
shall be in form and substance and from a source satisfactory to counsel for the
Plan.

          14.5 In the event a partial termination (within the meaning of theAct)
of the Plan has  occurred  then (i) the  interest of each  Participant  affected
thereby in his Account  shall be  nonforfeitable  as of the date of such partial
termination  and (ii) the provisions of Sections 14.2, 14.3 and 14,4 and Section
13.2 which in the opinion of the Administrative  Committee are necessary for the
execution of the Plan and the allocation and  distribution  of the assets of the
Plan shall apply.

          14.6 Except as  provided in Section 5.6 of the Plan or Section  414(p)
of the Code,  in no event  shall any part of the funds of the Plan  (other  than
such part as is  required  to pay taxes,  if any,  and  expenses  as provided in
Section 7) be used for or diverted to any purposes  other than for the exclusive
benefit of Participants and their  Beneficiaries and Surviving spouses under the
Plan.


<PAGE>

                 SECTION 15. GENERAL LIMITATIONS AND PROVISIONS

          15.1 Each Participant,  former Participant,  Beneficiary and Surviving
Spouse shall assume all risk in connection with any decrease in the value of the
assets of the Trust and the  Participants'  Accounts  or  special  accounts  and
neither  the  Employer  nor the  Administrative  Committee  nor  the  Investment
Committee shall be liable or responsible therefor.

          15.2  Nothing  contained in the Plan shall give any Employee the right
to be retained in the employment of the Company,  any  Participating  Company or
any of its  subsidiaries or affiliated or associated  corporations or affect the
right of any such Employer to dismiss any Employee. The adoption and maintenance
of the Plan shall not constitute a contract between an Employer and any Employee
or consideration for, or an inducement to or condition of, the employment of any
Employee.

          15.3 If the  Administrative  Committee  shall  find that any person to
whom any  amount  is  payable  under  the Plan is found by a court of  competent
jurisdiction  to be  unable  to care  for his  affairs  because  of  illness  or
accident,  or is a minor,  or has died,  then any  payment due him or his estate
(unless  a  prior  claim  therefor  has  been  made  by a duly  appointed  legal
representative)  may, if the Administrative  Committee so elects, be paid to his
spouse,  a child, a relative,  an  institution  maintaining or having custody of
such person, or any other person deemed by the Administrative  Committee to be a
proper  recipient on behalf of such person  otherwise  entitled to payment.  Any
such payment shall be a complete  discharge of the liability of the Plan and the
Trust therefor.

          15.4  Except  insofar  as  may  otherwise  be  required  by law or (i)
pursuant  to the  terms  of a  Qualified  Domestic  Relations  Order  or (ii) in
connection  with a judgment or  settlement  entered  into on or after  August 5,
1997, involving the Plan pursuant to the


<PAGE>

requirements of Section 401(a)(13)(C) of the Code, no amount payable at any time
under the Plan and the Trust  shall be subject in any  manner to  alienation  by
anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge
or  encumbrance  of any  kind  nor in any  manner  be  subject  to the  debts or
liabilities  of any person and any  attempt to so  alienate  or subject any such
amount,  whether presently or thereafter  payable,  shall be void. If any person
shall attempt to, or shall,  alienate,  sell, transfer,  assign, pledge, attach,
charge or otherwise encumber any amount payable under the Plan and the Trust, or
any part thereof,  or if by reason of his bankruptcy or other event happening at
any such time such amount would be made subject to his debts or  liabilities  or
would otherwise not be enjoyed by him, then the Administrative  Committee, if it
so elects, may direct that such amount be withheld and that the same or any part
thereof be paid or applied to or for the  benefit of such  person,  his  spouse,
children or other  dependents,  or any of them, in such manner and proportion as
the Administrative Committee may deem proper.

          Notwithstanding  any other  provision of the Plan to the contrary,  if
the amount payable to an alternate  payee under a Qualified  Domestic  Relations
Order does not exceed $5,000 (or,  effective prior to January 1, 1998,  $3,500),
such  amount  shall be paid in one  lump sum  payment  in cash,  property,  or a
combination of cash and property, as elected by such alternate payee, as soon as
practicable  following such order's having been determined by the Administrative
Committee to constitute a Qualified  Domestic  Relations  Order and the entry of
such order by a court of competent  jurisdiction.  If the amount  exceeds $5,000
(or,  effective  prior to January 1,  1998,  $3,500),  it may be paid as soon as
practicable  following such order's having been determined by the Administrative
Committee to constitute a Qualified Domestic Relations


<PAGE>

Order and the entry of such order by a court of competent  jurisdiction,  if the
alternate payee consents thereto and if such order provides for such payment.

          15.5 If the Administrative  Committee cannot ascertain the whereabouts
of any person to whom a payment is due under the Plan,  and if, after five years
from  the  date  such  payment  is due or upon  the  termination  of the Plan in
accordance  with  Section 14, a notice of such payment due is mailed to the last
known  address of such  person,  as shown on the  records of the  Administrative
Committee  or the  Employer,  and within  three  months  after such mailing such
person has not made written claim therefor, the Administrative  Committee, if it
so elects, after receiving advice from counsel to the Plan, may direct that such
payment and all remaining  payments  otherwise due to such person be canceled on
the  records  of  the  Plan  and  the  amount  thereof  applied  to  reduce  the
contributions  of the Employer or, in the case of the  termination  of the Plan,
allocated on a pro rata basis among the  Participants of the Plan, and upon such
cancellation,  the Plan and the Trust shall have no further  liability  therefor
except  that,  in the  event  such  person  later  notifies  the  Administrative
Committee  of his  whereabouts  and  requests the payment or payments due to him
under the  Plan,  the  amount so  applied  shall be paid to him as  provided  in
Section 10.

          15.6 Any and all rights or benefits  accruing to any persons under the
Plan  shall be  subject to the terms of the Trust  Agreement  which the  Company
shall enter into with the Trustee providing for the  administration of the Trust
Fund.

          15.7  Notwithstanding  any  provision  in the  Plan  to the  contrary,
effective as of December 12, 1994,  contributions  and benefits  with respect to
"qualified  military service" will be provided in accordance with Section 414(u)
of the Code.


<PAGE>

          15.8  Whenever  used in the Plan the  masculine  gender  includes  the
feminine  gender and the  singular  includes  the  plural,  unless  the  context
indicates otherwise.

          15.9  The  captions  preceding  the  sections  of the Plan  have  been
inserted  solely as a matter of  convenience  and in no way  define or limit the
scope or intent of any provisions of the Plan.

          15.10 The Plan and all  rights  thereunder  shall be  governed  by and
construed in accordance with the Act and, to the extent not preempted by the Act
or as  expressly  provided  herein,  the laws of the State of New York  (without
regards to its conflict of laws provision).


<PAGE>

                    SECTION 16. MAXIMUM AMOUNT OF ALLOCATION

          16.1 The  provisions  of this Section 16 shall govern  notwithstanding
any other provisions of the Plan.

          16.2 Annual  Additions  to a  Participant's  Account in respect of any
Plan Year may not exceed the lesser of

               (a)  Effective  as of January 1, 1995,  $30,000  (adjusted  under
                    such  Regulations  as my be issued by the  Secretary  of the
                    Treasury); or

               (b)  25% of the Participant's Salary for such Plan Year. "Salary"
                    under  this  Section  16 means (i)  Salary,  as  defined  in
                    Section 2.45,  plus (ii) effective for Plan Years  beginning
                    on or after January 1, 1998, (A) any elective  deferrals (as
                    defined in Section  402(g)(3)),  and (B) any amount which is
                    contributed  or deferred by the  Employer at the election of
                    the  Participant  and which is not  includible  in the gross
                    income of the  Participant  under Sections 125 and 132(f) of
                    the Code.

          For  purposes of this Section 16, the term  "Annual  Additions"  shall
mean the sum of the following amounts which,  without regard to this Section 16,
would have been  credited to the  Participant's  Account for any Plan Year under
the Plan and under any other  defined  contribution  plans of the Employer or an
Affiliate: (i) Employer Contributions; (ii) Compensation Reduction Contributions
and all  elective  contributions  made  under any cash or  deferred  arrangement
within the meaning of Section  1.401(k)-1(g)(3) of the IRS Regulations including
excess deferrals;  (iii) voluntary employee  after-tax  contributions made under
any qualified  employee pension benefit plan; (iv)  forfeitures,  if applicable;
(v) with  respect  to any  plan  maintained  by the  Employer  or an  Affiliate,
contributions  allocated to any individual  medical  account  defined in Section
415(l)(2) of the Code that is part of a defined benefit plan


<PAGE>

maintained by the Employer;  and (vi) in the case of a Participant who is a "key
employee," as defined in Section 419A(d)(3) of the Code, the amount allocated to
a separate  account  established for  post-retirement  medical or life insurance
benefits of such Participant described in Section 419A(d)(1) of the Code under a
welfare benefit fund as defined in Section 419(e) of the Code, and as maintained
by the  Employer.  The term Annual  Additions  shall not  include  any  Rollover
Contributions  made  pursuant to Section  4.5. The term Annual  Additions  shall
include,  whether or not  refunded,  excess  deferrals  as  described in Section
4.1(a),  excess  contributions  as  defined in  Section  4.1(b)(ii),  and excess
aggregate  contributions  as  defined  in  Section  5.1(d)(ii).  Solely  for the
purposes of Section  16.4(a),  Annual  Additions  shall include a  Participant's
contributions under a qualified cost-of-living  arrangement described in Section
415(k)(2) of the Code.

          16.3 If the  limitations  of Section  16.2 are violated as a result of
the  allocation  of (i)  forfeitures,  (ii) a reasonable  error in  estimating a
Participant's  Compensation  or  Salary,  (iii) or under  such  other  facts and
circumstances  as  determined  by the IRS,  amounts  which  would  otherwise  be
allocated  to  a  Participant's  Account  must  be  reduced  by  reason  of  the
limitations of Section 16.2, such reduction shall be made in the following order
of priority, but only to the extent necessary:

               1.   Employer  Contributions  made  pursuant  to  Section  5.1(b)
                    allocable to such  Participant  in respect of such Plan Year
                    shall be reduced and the amount of such  reduction  shall be
                    utilized  to  reduce  Employer   Contributions  which  would
                    otherwise be made to the Plan; and then

               2.   Employer  Contributions  made  pursuant  to  Section  5.1(a)
                    allocable to such  Participant  in respect of such Plan Year
                    shall be reduced and the


<PAGE>

                    amount  of  such  reduction  shall  be  utilized  to  reduce
                    Employer  Contributions which would otherwise be made to the
                    Plan; and then

               3.   To the extent permitted by the Code and IRS Regulations, the
                    amount of Compensation Reduction Contributions, exclusive of
                    any earnings of the Trust Fund attributable  thereto,  shall
                    be refunded to the Participant or, to the extent required by
                    law,  shall be held  unallocated  in a suspense  account and
                    shall  be  applied,   as  directed  by  the   Administrative
                    Committee in accordance with the law and  regulations,  as a
                    credit to reduce the  contributions  of the Employer for the
                    next Plan Year and in the event of  termination  of the Plan
                    shall be returned to the Employer.

          16.4 (a) In the event that,  in any Plan Year and with  respect to any
Participant,  the sum of the  "Defined  Contribution  Fraction"  (as  defined in
Section 16.4 (b)) and the "Defined Benefit Fraction" (as defined in Section 16.4
(b)) would  otherwise  exceed 1.0,  then the benefit  payable  under the defined
benefit plan or plans shall be reduced in accordance with the provisions of that
plan or those  plans,  but only to the  extent  necessary  to  ensure  that such
limitation  is not  exceeded.  If  this  reduction  does  not  ensure  that  the
limitation  set forth in this  Section  16.4 is not  exceeded,  then the  Annual
Addition to any defined contribution plan, other than the Plan, shall be reduced
in accordance with the provisions of that plan but only to the extent  necessary
to ensure that such limitation is not exceeded.

          (b) For purposes of this Section 16.4, the following  terms shall have
the following meanings:

               1.   "Defined  Contribution  Fraction"  shall  mean,  as  to  any
                    Participant for any Plan Year, a fraction, (A) the numerator
                    of which is the


<PAGE>

                    sum of  Annual  Additions,  for the Plan  Year and all prior
                    Plan  Years,  as of the  close of the Plan  Year and (B) the
                    denominator  of  which  is  the  sum of  the  lesser  of the
                    following  amounts,  determined  for such  Plan Year and for
                    each  prior  Year  of  Service   (i)  the  product  of  1.25
                    multiplied by the dollar  limitation in effect for such Year
                    under Section  16.2(a) or (ii) the product of 1.4 multiplied
                    by the amount which may be taken into account  under Section
                    16.2(b)  with  respect  to the  Participant  for such  Year;
                    provided, that the Administrative  Committee, in determining
                    the  Defined  Contribution  Fraction  may  elect  to use the
                    special  transitional  rules permitted by Section 415 of the
                    Code and IRS Regulations thereunder; and

               2.   "Defined Benefit Fraction" shall mean, as to any Participant
                    for any Plan Year, a fraction, (A) the numerator of which is
                    the projected annual benefit  (determined as of the close of
                    the Plan Year and in accordance with IRS Regulations) of the
                    Participant  under any defined  benefit  plan (as defined in
                    Sections  414(j) and 415(k) of the Code)  maintained  by the
                    Company or any of its Affiliates and (B) the  denominator is
                    the  lesser of (i) the  product  of 1.25  multiplied  by the
                    dollar  limitation in effect under Section  415(b)(1)(A)  of
                    the Code  for such  Plan  Year or (ii)  the  product  of 1.4
                    multiplied by an amount equal to 100% of the Participant's


<PAGE>

                    average  compensation  for his high three  years  within the
                    meaning of Section 415(b)(3) of the Code for such Plan Year.

          Notwithstanding  the  above  or  any  provision  of  the  Plan  to the
contrary,  except as may  otherwise be required by law,  this Section 16.4 shall
cease to apply with  respect to Plan Years  beginning  after  December 31, 1999,
without the need for further amendment to the Plan.

<PAGE>

                        SECTION 17. TOP HEAVY PROVISIONS

          17.1 The Plan will be considered a Top Heavy Plan for any Plan Year if
it is determined to be a Top Heavy Plan as of the last day of the preceding Plan
Year (or, with respect to the first Plan Year,  the last day of such Plan Year).
For  purposes  of  determining  whether  the  Plan  is a Top  Heavy  Plan,  when
appropriate, actuarial assumptions which reflect reasonable mortality experience
and a reasonable interest rate that uniformly applies for accrual purposes under
all plans  maintained by the Company and its Affiliates shall be used. The value
of a  Participant's  Account shall be determined as of the last  Valuation  Date
used for computing  Plan costs for minimum  contribution  purposes  which occurs
within the Plan Year in which the determination is being made, and shall include
amounts distributed to or on behalf of the Participant within the four preceding
Plan Years.  Notwithstanding any other provisions of the Plan, the provisions of
this  Section 17 shall  apply and  supersede  all other  provisions  of the Plan
during each Plan Year with respect to which the Plan is  determined  to be a Top
Heavy Plan.

          17.2 For  purposes  of this  Section 17 and as  otherwise  used in the
Plan, the following terms shall have the meanings set forth below:

               (a) "Determination Date" means the last day of the preceding Plan
          Year or the last day of the first Plan Year.

               (b) "Key Employee" means

                    (i) each person (and his Beneficiary) who at any time during
               the five Plan Years ending on the Determination Date:

                         (A)  was an  officer  of the  Company  or an  Affiliate
                    having an annual  Salary  greater  than 50% of the amount in
                    effect under Section  415(b)(1)(A)  of the Code for any such
                    Plan Year;


<PAGE>

                         (B)  was one of the 10  Employees  owning  the  largest
                    interest of the Company  and its  Affiliates  but only if he
                    received  Salary equal to or greater than the dollar  amount
                    applied for purposes of Section 415(c)(1)(A) of the Code for
                    the  calendar  year ending  coincident  with or  immediately
                    after the Determination Date;

                         (C) owned at least five  percent  of the an  Employer's
                    outstanding  shares of stock or at least five percent of the
                    total  combined  voting  power of the  Employer's  shares of
                    stock; or

                         (D)  owned,  at least  one  percent  of the  Employer's
                    shares  of  stock  or at  least  one  percent  of the  total
                    combined voting power of an Employer's  shares of stock, and
                    whose annual Salary from the Employer exceeds $150,000,

                    (ii) The following special rules apply to this definition:

                         (A) No more than 50 officers,  or, if less, the greater
                    of three or 10% of all Employees will be Key Employees under
                    Section  17.2(b)(i)(A).  If there are more officers than are
                    counted under the preceding sentence, only those who had the
                    highest aggregate Salary,  during the five Plan Years ending
                    on the Determination Date will be considered Key Employees.

                         (B) A person is an officer only if he is in regular and
                    continued  service  as an  administrative  executive  of the
                    Company or a Participating Company.


<PAGE>

                         (C) No person  will be a Key  Employee  under more than
                    one  paragraph  of  this  definition  unless  he  also  is a
                    Beneficiary of a deceased Key Employee.

                         (D) A person  will be  treated  as owning all shares of
                    stock   which  he  owns   directly  or   constructively   by
                    application of Section 318 of the Code.

                         (E) For purposes of  determining  whether a person is a
                    one  percent  or five  percent  owner of the  Company or any
                    Affiliate,  his ownership  interest in any entity related to
                    the Company  solely by reason of Sections  414 (b),  (c) and
                    (m) of the Code shall be disregarded.

                         (F)  For  purposes  of  determining  whether  a  person
                    receives  an annual  Salary of more  than  $150,000,  Salary
                    received from each Employer  required to be aggregated under
                    Sections  414 (b),  (c) and (m) of the  Code  shall be taken
                    into account.

          (c)  "Non-Key  Employee"  means  (i)  any  Employee  who  is not a Key
Employee, or (ii) a Beneficiary of a Non-Key Employee.

          (d)  "Permissive  Aggregation  Group"  means  all  qualified  employee
pension  benefit  plans in the  Required  Aggregation  Group  and any  qualified
employee  pension  benefit plans  sponsored by the Company or an Affiliate which
are  not  part  of  the  Required  Aggregation  Group,  but  which  satisfy  the
requirements of Sections 401(a)(4) and 410 of the Code when considered  together
with the  Required  Aggregation  Group  and  which  the  Company  elects to have
included in the Permissive Aggregation Group.


<PAGE>

          (e)  "Required  Aggregation  Group"  means  the  Plan  and  any  other
qualified  employee pension benefit plan that was sponsored during the five year
period  ending  on  the  applicable  Determination  Date  by the  Company  or an
Affiliate  (i) in which a Key Employee  participates  or (ii) which  enables the
Plan to meet the requirements of Sections 401(a)(4) or 410 of the Code.

          (f) "Top Heavy Group" means all  qualified  employee  pension  benefit
plans of the Company and its  Affiliates in the Required  Aggregation  Group and
any other  qualified  employee  benefit  plan of the Company and its  Affiliates
which the Company elects to aggregate as part of a Permissive  Aggregation Group
if, on any  Determination  Date,  the  Value of the  cumulative  annual  accrued
benefits for Key  Employees  under all defined  benefit  plans and the aggregate
Value of all Key Employees' accounts under all defined contribution plans exceed
60% of a  similar  sum  determined  for  all  Employees.  For  purposes  of this
computation,  the account  balances and cumulative  annual accrued benefits of a
Participant (i) who is a Non-Key  Employee but who was a Key Employee in a prior
Plan Year,  or (ii) who has not been  credited with at least one Hour of Service
with any  Employer  at any  time  during  the five  year  period  ending  on the
Determination Date will be disregarded.  If the aggregated plans do not have the
same Determination Date, this test will be made using the Value calculated as of
each plan's Determination Date occurring during the same Plan Year.

          (g) "Top Heavy Plan" means the Plan if, on any Determination Date, the
present Value of the Accounts  under the Plan for Key  Employees  exceeds 60% of
the Value of the Accounts under the Plan for all Employees.  For purposes of the
comparison,  the Accounts of all Non-Key  Employees who were, but no longer are,
Key Employees will be disregarded. The


<PAGE>

Plan is super Top Heavy if it would be a Top Heavy Plan if 90% were  substituted
for 60%  wherever it appears in the  definition  of Top Heavy Plan and Top Heavy
Group.

          (h) "Top Heavy Plan Year" means any Plan Year during which the Plan is
Top Heavy or part of a Top Heavy Group.

          (i) "Value" means"

               (i) for all defined benefit plans,  the present value  calculated
          as provided in those plans; and

               (ii) for all defined contribution plans, the fair market value of
          each  Participant's   account   (including  amounts   attributable  to
          voluntary  employee  contributions  from a qualified  employee pension
          benefit plan  sponsored by the Company or an Affiliate)  determined as
          of the most recent Determination Date increased by:

                    (A) distributions  made during the five Plan Years ending on
               the Determination Date (except  distributions already included in
               determining  the Value of the  accounts  and  distributions  made
               during the five Plan Years preceding the Determination Date under
               a terminated  plan which,  if it had not been  terminated,  would
               have been  required to be included  in the  Required  Aggregation
               Group); and

                    (B) all rollover contributions distributed from the plans to
               a qualified employee benefit plan not sponsored by the Company or
               an Affiliate, and decreased by;

                    (C) any deductible Employee contributions; and


<PAGE>

                    (D)  rollover  contributions  received  by the plans  from a
               qualified  employee  benefit plan not sponsored by the Company or
               an Affiliate; and

                    (E) rollover  contributions  distributed  from the Plan to a
               qualified  employee pension benefit plan sponsored by the Company
               or an Affiliate.

          17.3 With respect to Plan Years beginning prior to January 1, 1999, in
the event the vesting provisions of Section 9.2 are amended, any Participant who
has  completed at least three Years of Service,  for purposes of  determining  a
Participant's  nonforfeitable  right to his Employer  Contribution  Account, may
elect  to have  the  nonforfeitable  percentage  of such  Employer  Contribution
Account  computed  under the Plan without  regard to such amendment or change by
notifying the  Administrative  Committee in writing  within the election  period
hereinafter  described.  The  election  period  shall  begin  on the  date  such
amendment is adopted or the date such change is  effective,  as the case may be,
and shall end no earlier than the latest of the  following  dates:  (i) the date
which is 60 days after the day such amendment is adopted; (ii) the date which is
60 days after the day such amendment or change becomes  effective;  or (iii) the
date which is 60 days after the day the  Participant  is given written notice of
such  amendment or change by the  Administrative  Committee.  Any election  made
pursuant to this Section 17.3 shall be irrevocable.

          17.4  Subject to Section  17.5,  for each Plan Year that the Plan is a
Top Heavy Plan,  the  Employer's  contribution  allocable to the Account of each
Non-Key  Employee,  regardless of his Salary,  who has satisfied the eligibility
requirements  of Section 3.1,  whether or not a Participant in the Plan, and who
is in Service at the end of the Plan Year shall not be less


<PAGE>

than the lesser of (i) three  percent of such Non-Key  Employee's  Salary (or to
the extent required by the Code or Section  1.415-2(d) of the IRS  Regulations),
or (ii) the  percentage at which  contributions  for such Plan Year are made and
allocated on behalf of the Key Employee for whom such percentage is the highest.
For the purpose of determining the appropriate percentage under clause (ii), all
defined contribution plans required to be included in an Aggregation Group shall
be  treated as one plan.  Clause  (ii)  shall not be  applicable  if the Plan is
required to be included in an Aggregation  Group which enables a defined benefit
plan also required to be included in said Aggregation  Group to satisfy Sections
401(a)(4) or 410 of the Code.  If the Employer  maintains  more than one defined
contribution plan, the minimum contribution set forth in this Section 17.4 shall
be  provided  under the Plan to  Non-Key  Employees  who  participate  solely in
defined  contribution plans only to the extent such minimum  contribution is not
provided under such other plan or plans.

          17.5 The provisions of this Section 17.5 shall no longer be applicable
with respect to Plan Years beginning after December 31, 1999. For each Plan Year
that the Plan is a Top  Heavy  Plan,  1.0 shall be  substituted  for 1.25 as the
multiplicand  of the dollar  limitation in  determining  the  denominator of the
defined benefit plan fraction and of the defined  contribution plan fraction for
purposes of Section 17.4.

          (a) If, after  substituting 90% for 60% wherever the latter appears in
Section  416(g) of the Code,  the Plan is not determined to be a Top Heavy Plan,
the  provisions  of  Section  17.5  shall  not  be  applicable  if  the  minimum
contribution by the Employer  allocable to the Account of any Participant who is
a Non-Key  Employee as specified in Section 17.4 is determined  by  substituting
"four percent" for "three percent."


<PAGE>

          17.6 If, with  respect to a Non-Key  Employee  who  benefits in a Plan
Year under both a defined  contribution  and defined  benefit plan which are Top
Heavy Plans  maintained  by the  Employer,  a top-heavy  minimum  benefit is not
provided for such Plan Year under both plans,  then such  determination for such
Plan Year shall be made in conformity with the comparability  analysis described
in Q&A M-12 of Section  1.416-1 of the IRS  Regulations.  Such analysis shall be
modified,  where a factor of 1.25 is utilized  for such Plan Year in  connection
with the  satisfaction  of the  limitations  set forth in Section  415(e) of the
Code, in accordance with the last sentence of Q&A M-14 of Section 1.416-1 of the
IRS Regulations.



<PAGE>
                                   APPENDIX A
                             OMI SAVINGS PLAN - ESOP

          The purpose of this Appendix A is to provide  rules and  guidelines on
the  merger of the OMI  Employee  Stock  Ownership  Plan  ("ESOP")  into the OMI
Savings Plan, said merger being effective May 21, 1996.  Unless indicated to the
contrary, these rules and guidelines shall be effective May 21, 1996:

          1.  Effective  March 31, 1996,  each ESOP  participant  shall be fully
vested in his ESOP Account.

          2.  Solely  with  respect  to  the  ESOP,  no  Compensation  Reduction
Contributions,   Employer   Contributions  or  Rollover  Contributions  will  be
allocated to the ESOP Account or invested in OMI Corporation  Shares,  nor may a
Participant  liquidate  his account  within an  Investment  Fund to purchase OMI
Corporation Shares. Cash dividends, if any, with respect to such OMI Corporation
Shares will be invested in the Investment Funds, as directed by the Participant.

          3. Each month a  Participant  with an ESOP  Account may  instruct  the
Trustee to sell up to eight percent of his or her shares, in whole  percentages,
such  eight  percent  to be based on the  number of shares of Stock  held in the
Participant's  ESOP Account on May 21, 1996.  This eight percent  restriction is
not to be cumulative. The proceeds of any such sale to be invested in any or all
of the Investment Funds, as directed by the Participant.

          4. Stock shall be voted in accordance with the terms and conditions of
Section 15.7 of the ESOP.


<PAGE>

          5. Former employees of the Employer who were  participants in the ESOP
may elect to (i) liquidate their Stock and receive the cash proceeds  thereof or
(ii)  establish  an ESOP Account and be subject to the terms and  conditions  of
item 3 above.


<PAGE>

                          OMI CORPORATION SAVINGS PLAN

                                TABLE OF CONTENTS


                                                                           Page

SECTION 1.  PURPOSE..........................................................2

SECTION 2.  DEFINITIONS......................................................3

SECTION 3.  PARTICIPATION...................................................16

SECTION 4.  COMPENSATION REDUCTION CONTRIBUTIONS............................18

SECTION 5.  EMPLOYER CONTRIBUTIONS..........................................27

SECTION 6.  INVESTMENT OF CONTRIBUTIONS.....................................34

SECTION 7.  VALUATIONS AND MAINTENANCE OF PARTICIPANTS' ACCOUNTS............41

SECTION 8.  ELIGIBILITY FOR BENEFITS........................................44

SECTION 9.  VESTING.........................................................47

SECTION 10.  METHOD OF PAYMENT OF BENEFITS..................................49

SECTION 11.  DESIGNATION OF BENEFICIARIES...................................53

SECTION 12.  ADMINISTRATION OF THE PLAN.....................................55

SECTION 13.  TERMINATION OF PARTICIPATING COMPANY PARTICIPATION.............63

SECTION 14.  AMENDMENT OR TERMINATION OF THE PLAN AND THE TRUST.............67

SECTION 15.  GENERAL LIMITATIONS AND PROVISIONS.............................70

SECTION 16.  MAXIMUM AMOUNT OF ALLOCATION...................................74


<PAGE>

SECTION 17.  TOP HEAVY PROVISIONS...........................................79


APPENDIX A.  OMI SAVINGS PLAN - ESOP........................................87