[Federal Register Volume 59, Number 136 (Monday, July 18, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17436]
[[Page Unknown]]
[Federal Register: July 18, 1994]
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DEPARTMENT OF TRANSPORTATION
Maritime Administration
[Docket S-909]
Vulcan Carriers, Ltd.; Application for Waiver Under Section 804
and for Written Permission Under Section 805(a) of the Merchant Marine
Act of 1936, as Amended
Pursuant to sections 804 and 805 of the Merchant Marine Act of
1936, as amended, (Act), the current and future shareholders of Vulcan
Carriers, Ltd. (Vulcan), by letter dated July 12, 1994, request a
waiver under section 804 and permission under section 805 to own a
fraction of one percent of the shares of stock in OMI Corp. (OMI) for
some or all of the limited period of time remaining during which Vulcan
will be receiving Operating Differential Subsidy (ODS) pursuant to
Operating Differential Subsidy Agreements (ODSA), Contracts MA/MSB-167
(a), (b), (c), and (d).
Vulcan advises that this request is being submitted in order to
permit the sale of Vulcan from Captain Jack Gordon, the current
president of Vulcan, to Captain Enrico Fenzi. Vulcan advises that its
request for approval of the sale of Vulcan to Captain Fenzi under
section 608 of the Act was submitted to the Maritime Administration on
June 9, 1994.
Vulcan states that its request of July 12, 1994, is being submitted
because the purchaser of the Vulcan stock is a retired former employee
of OMI who is entitled to receive upon his retirement shares of stock
purchased for him by the trustee of OMI's Employee Stock Ownership Plan
(ESOP). The seller of the Vulcan stock also is seeking approval of the
ownership of an even smaller amount of OMI stock (approximately .007%)
which he purchased unaware that approval was required.
Vulcan advises that Captain Fenzi, the purchaser of Vulcan, is a
retired former vice president of OMI Corp. As an employee of OMI,
Captain Fenzi became vested in OMI's ESOP. OMI no longer has a separate
defined benefit pension plan for its employees. The ESOP acts as the
primary pension benefit available to OMI employees along with a 401(k)
program which became effective July 1, 1993, and which currently
provides minimal lump sum distribution on an employee's retirement. As
an eight-year employee of OMI prior to his retirement, Captain Fenzi is
the beneficiary of 38,248 shares of OMI stock currently held by the
trustee of the ESOP.\1\ Upon application to transfer these shares to
him, the stock would be transferred to him as his main source of
pension income from OMI or for his ``rollover'' into other pension
assets. If Captain Fenzi were to retain all of these shares of stock,
they would constitute one-tenth of one percent (0.1%) of the
outstanding shares of OMI stock.
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\1\As an employee who retired in 1994, Captain Fenzi will be
entitled to one more distribution of stock through the ESOP at the
end of the year. The number of shares to be provided to 1994
retirees is not determined until that time. This request therefore
covers all shares of stock available to Captain Fenzi through his
participation in the ESOP.
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Vulcan advises that during his employment at OMI, Captain Fenzi,
like all other senior management employees at OMI, was also eligible
for stock options pursuant to three separate option plans governing the
grant of stock options as a portion of an employee's compensation.
Captain Fenzi received his first grant in 1986 and continued to receive
them though his time at OMI. However, during his entire tenure at OMI,
Captain Fenzi never exercised any option to purchase additional stock,
nor does he have any immediate plans to do so. Nevertheless, Captain
Fenzi is eligible to exercise options on up to 41,882 shares of OMI for
the next one to three years. Captain Fenzi requests permission to
include these options in this approval to ensure all potential
purchases are covered, even if not contemplated. In the highly unlikely
event that all of these options were exercised, Captain Fenzi's holding
would constitute only (at most) 0.2% of the outstanding shares of OMI
stock.
Vulcan advises that Captain Gordon was also a retiree of OMI at the
time he established Vulcan. At or near the time of the creation of
Vulcan, Captain Gordon sold the OMI stock he received through the ESOP
for other retirement investments, but over the last several years,
Captain Gordon has purchased on the open market or received through
option exercises a total of 2,243 shares of OMI stock. (At this time,
Captain Gordon no longer retains any right to exercise options for the
purchase of additional OMI stock.) Captain Gordon's shares represent
.007% of the shares of OMI stock. Captain Gordon requests approval of
his ownership of this stock retroactive to the dates of purchase
through the date of sale of Vulcan.
Vulcan states that OMI currently operates only four U.S.-flag
vessels in the coastwise trade. OMI operates, on a spot market basis, a
crude oil carrier in the Alaska trade and three chemical product
carriers in the coastwise trade. OMI's other U.S.-flag vessels (three
bulk carriers and four product tankers) operate in the foreign trade.
OMI also operates 34 foreign flag tankers, dry bulk vessels, and
liquefied petroleum gas carriers (28 are owned, often with joint
venture partners, and six are chartered in).
Vulcan states that approval for the ownership of these shares of
stock is being requested for a limited period of time (until the sale
of Vulcan is completed or until the termination of the ODSAs) and under
special circumstances that are very limited in scope. Ownership by
Captain Fenzi and Captain Gordon of such a small portion of the shares
of a publicly traded company would not result in unfair competition to
any U.S.-flag operator either an avenue by which such subsidy could be
``leaked'' to OMI. Vulcan states that based on these special
circumstances and upon the lack of any competitive disadvantage to any
U.S.-flag operator, a waiver of section 804(a) and granting permission
under section 805(a) would not be contrary to the objectives and
policies of the Merchant Marine Act.
This application and Vulcan's application of June 9, 1994, may be
inspected in the Office of the Secretary, Maritime Administration. Any
person, firm or corporation having any interest in the application of
July 12, 1994, within the meaning of section 804 or section 805(a) of
the Act and desiring to submit comments concerning the application,
must file written comments in triplicate with the Secretary, Maritime
Administration, Room 7300, Nassif Building, 400 Seventh Street, SW.,
Washington, DC 20590. Comments must be received no later than 5:00 p.m.
on July 22, 1994, including petition for leave to intervene under
section 805(a) of the Act. Any petition for leave to intervene under
section 805(a) of the Act shall state clearly and concisely the grounds
of interest, and the alleged facts relied on for relief.
If no comments are received within the specified time, including
any petition for leave to intervene under section 805(a) of the Act, or
if it is determined that such petition does not demonstrate sufficient
interest to warrant a hearing, the Maritime Administration will take
such action as may be deemed appropriate.
(Catalog of Federal Domestic Assistance Program No. 20.804
Operating-Differential Subsidies).
By Order of the Maritime Administration.
Dated: July 13, 1994.
Joel C. Richard,
Secretary, Maritime Administration.
[FR Doc. 94-17436 Filed 7-15-94; 8:45 am]
BILLING CODE 4910-81-M