[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]


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.

    \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.

    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 
    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]