U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
EXCHANGE ACT
For the transition period from to
Commission File Number 0-3960
CAPITAL PROPERTIES, INC.
(Exact Name of Small Business Issuer as Specified in its Charter)
Rhode Island 05-0386287
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Hospital Trust Plaza, Suite 920, Providence, RI 02903
(Address of principal executive offices)
Issuer's telephone number 40l-33l-0100
(Former name, former address and former fiscal year, if changed
since last report.)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the issuer was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the lastest practicable date:
As of August 3, 1995, the registrant had 1,000,000
shares of common stock outstanding.
<PAGE>
PART I
Item 1. Financial Statements
CAPITAL PROPERTIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
JUNE 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Properties and equipment (net of accumulated
depreciation)(Notes 3 and 7)................... $ 9,557,000
Cash and cash equivalents........................ 760,000
Note receivable, Providence and Worcester
Railroad Company (Notes 4 and 7)............... 6,519,000
Other receivables (Note 5)....................... 179,000
Accrued rental income of $8,344,000 less
amounts for which realization is not
assured of $8,129,000 (Note 6)................. 215,000
Prepaid and other................................ 244,000
$17,474,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Note payable, bank (Notes 4 and 7)............. $ 1,776,000
Accounts payable............................... 102,000
Accrued expenses:
Property taxes................................ 366,000
Other......................................... 215,000
Deferred income taxes (Note 8)................. 1,483,000
3,942,000
Commitment (Note 9)
Shareholders' equity:
Common stock, $1 par; authorized, issued
and outstanding 1,000,000 shares.............. 1,000,000
Capital in excess of par....................... 10,828,000
Retained earnings.............................. 1,704,000
13,532,000
$17,474,000
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CAPITAL PROPERTIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1995 1994 1995 1994
<S> <C> <C>
Income:
Rentals (Note 6)............................ $441,000 $384,000 $ 881,000 $ 760,000
Garage and surface parking revenues......... 124,000 103,000 251,000 222,000
Interest:
Providence and Worcester Railroad Company.. 196,000 211,000 395,000 425,000
Other...................................... 9,000 5,000 16,000 8,000
Gain on sale of properties and equipment.... 75,000 -0- 75,000 -0-
845,000 703,000 1,618,000 1,415,000
Expenses:
Expenses applicable to:
Rental income.............................. 178,000 147,000 356,000 289,000
Garage and surface parking................. 155,000 154,000 313,000 317,000
General and administrative.................. 403,000 256,000 723,000 545,000
Interest.................................... 46,000 50,000 96,000 97,000
782,000 607,000 1,488,000 1,248,000
Income before income taxes.................... 63,000 96,000 130,000 167,000
Income taxes ................................. 37,000 50,000 65,000 88,000
Net income.................................... $ 26,000 $ 46,000 $ 65,000 $ 79,000
Income per common share....................... $ .03 $ .05 $ .07 $ .08
Dividends per common share.................... $ .10 $ .10 $ .10 $ .10
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CAPITAL PROPERTIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income........................... $ 65,000 $ 79,000
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation ...................... 183,000 190,000
Gain on sale of properties and
equipment......................... (75,000)
Deferred income taxes ............. (52,000) (61,000)
Other, principally net changes in
other receivables, accounts
payable and accrued expenses...... (32,000) (92,000)
Net cash provided by
operating activities................ 89,000 116,000
Cash flows from investing activities:
Purchase of properties and
equipment........................... (10,000) (14,000)
Proceeds from:
Collection of note receivable....... 163,000 176,000
Sale of equipment................... 138,000
Net cash provided by investing
activities.......................... 291,000 162,000
Cash flows from financing activities,
payment of:
Notes payable, bank................. (277,000) (259,000)
Dividends........................... (100,000) (100,000)
(377,000) (359,000)
Increase (decrease) in cash and
cash equivalents..................... 3,000 (81,000)
Cash and cash equivalents, beginning... 757,000 813,000
Cash and cash equivalents, ending...... $ 760,000 $ 732,000
Supplemental disclosure, cash paid for:
Interest............................. $ 81,000 $ 93,000
Income taxes......................... $ 229,000 $ 199,000
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CAPITAL PROPERTIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of management, the accompanying interim consoli-
dated financial statements contain all adjustments necessary to
present fairly the financial position as of June 30, 1995 and the
results of operations for the three and six months ended June 30,
1995 and 1994, and cash flows for the six months ended June 30,
1995 and 1994.
2. Results for interim periods may not be necessarily indicative of
the results to be expected for the year.
3. Properties and equipment:
<TABLE>
<S> <C>
Properties and equipment on
lease or held for lease:
Land and land improvements....... $ 6,140,000
Buildings and structures......... 325,000
Equipment, petroleum storage
tanks........................... 4,163,000
10,628,000
Other:
Land and land improvements....... 192,000
Buildings, principally parking
garage.......................... 2,536,000
Equipment........................ 83,000
2,811,000
13,439,000
Less accumulated depreciation:
Properties and equipment on
lease or held for lease......... 3,342,000
Other............................ 540,000
3,882,000
$ 9,557,000
</TABLE>
4. Note receivable, Providence and Worcester Railroad Company:
During the second quarter of 1995, Providence and Worcester
Railroad Company (Railroad) informed the Company that it had
secured a commitment from a bank which would enable it to borrow
funds in an amount sufficient to prepay the entire balance of
Railroad's note to the Company at an interest rate significantly
below the 12% rate of the note. The Company and Railroad
negotiated a reduction of the interest rate to 10% upon the
Railroad's prepaying $1.8 Million on its note. It is anticipated
that the prepayment from Railroad will be made in August 1995, at
which time the Company will use the proceeds to prepay in full its
note payable to a bank.
The prepayment by Railroad and the interest rate adjustment will
result in a monthly payment by Railroad of principal and interest
of $55,000.
<PAGE>
CAPITAL PROPERTIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
5. Other receivables:
<TABLE>
<S> <C>
Rentals, principally tenant
property tax reimbursement...... $ 107,000
Interest, Providence and
Worcester Railroad Company...... 65,000
Other............................ 30,000
$ 179,000
</TABLE>
6. Description of leasing arrangements:
At June 30, 1995, the Company has entered into land leases for
three separate land parcels with remaining terms of up to 98
years. The Company also leases petroleum storage facilities and
various parcels of land for surface parking.
Prior to March 1995, the Company leased various parcels of land
for outdoor advertising to two tenants. During March 1995, one
tenant acquired the other tenant, and the Company extended the
term of its current lease with the remaining tenant to 2023.
For those leases with scheduled rent increases, the cumulative
excess of straight-line over contractual rentals (considering
scheduled rent increases over the initial 32 to 102 year terms of
the leases) amounted to $8,344,000 at June 30, 1995. Commencing
in 1992, management has been able to conclude that a portion of
the excess of straight-line over contractual rentals ($215,000 at
June 30, 1995) is realizable when payable over the terms of the
leases.
7. Note payable, bank:
In 1990, the Company refinanced a note due of $2,500,000 by making
a principal payment of $50,000 and by issuing a new note in the
amount of $2,450,000 with interest at 1% over prime due July 1993.
The note was extended to December 1994 and was further extended to
December 1999 and provides for monthly installments of principal
and interest of approximately $27,000. For the six months ended
June 30, 1995, the Company made prepayments totalling $225,000,
thereby reducing the final payment due in December 1999 to
$1,056,000. The note is secured by the Company's parking garage
and the note receivable from Railroad.
8. Income taxes:
Deferred taxes are recorded based upon differences between the
financial statement and tax basis of assets and liabilities and
available tax credit carryforwards. The tax effect of temporary
<PAGE>
CAPITAL PROPERTIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
8. Income taxes (continued):
differences and carryforwards which give rise to deferred tax
assets and liabilities at June 30, 1995 were as follows:
<TABLE>
<S> <C>
Gross deferred tax liabilities:
Property having a financial
statement basis in excess of
its tax basis................... $1,540,000
Excess of straight line over
contractual rental income....... 86,000
1,626,000
Gross deferred tax assets,
principally professional fees..... (143,000)
$1,483,000
</TABLE>
9. Commitment:
Under an agreement with the State of Rhode Island entered into in
1990, the Company will owe the State $158,000 sixty days after the
completion by the State of a construction contract for certain
public improvements affecting one of the Company's parcels. The
Company anticipates that such payment will be reimbursable by the
developer of such parcel. Accordingly, the Company has not
provided for such obligation on the accompanying consolidated
financial statements. The agreement is secured by a mortgage on
one of the Company's parcels. The agreement further provides
that, should the amount not be paid when it is due, interest will
accrue from the due date at the rate of prime plus 1%.
<PAGE>
CAPITAL PROPERTIES, INC. AND SUBSIDIARY
Item 2. Management's Discussion and Analysis or Plan of Operation
Financial condition:
A significant portion of the Company's land consists of
approximately 20.5 acres, including 1.9 acres of air rights, in
downtown Providence, Rhode Island, held for development. The
Company is negotiating a lease on one of its parcels and is
engaged in discussions concerning the possible development of
other parcels but is unable to predict when leases on additional
parcels will commence; however, the Company will continue to use
the available parcels for public surface parking.
Effective October 1, 1991, the Company's petroleum terminal
storage facilities were leased under a five-year lease under
which the tenant has the right to extend the lease term for an
additional five years. At any time during the first five years
of the lease, the tenant can exercise an option to purchase the
petroleum terminal storage facilities. The purchase price
during the first year of the lease was $4,500,000 and is
increased by an inflation factor in each of the remaining four
years ($4,961,000 at June 30, 1995). The Company has not been
advised by the tenant as to whether it will extend the term of
the lease beyond September 1996 or whether it will purchase the
terminal. The tenant must advise the Company by September 30,
1995 whether it intends to extend the lease term for an
additional five years. The Company is presently unaware of the
tenant's intentions either to extend the lease or to acquire the
terminal. In the event the tenant neither extends the lease nor
purchases the terminal, the Company believes it will have
sufficient time to locate a successor tenant.
In August 1994, a leak was discovered in a 25,000 barrel storage
tank at the petroleum terminal storage facilities which allowed
the escape of a small amount of fuel oil. The tank was emptied,
and all required notices were made to the appropriate
environmental agency. The soil contamination was contained
underneath the tank, and monitoring wells have to date shown no
groundwater contamination. The Company is presently in
discussions with the applicable governmental agency to determine
what additional remediation, if any, is necessary at this time.
The costs associated with this leak to date total $82,000, which
costs were shared equally between the tenant and the Company.
The Company does not anticipate that any additional costs for
remediation will be significant.
In 1990, the Company refinanced a note due of $2,500,000 by
making a principal payment of $50,000 and by issuing a new note
in the amount of $2,450,000 with interest at 1% over prime due
July 1993. The note was extended to December 1994 and was
further extended to December 1999 and provides for monthly
installments of principal and interest of approximately $27,000.
For the six months ended June 30, 1995, the Company made
prepayments of $225,000, thereby reducing the final payment due
<PAGE>
in December 1999 to $1,056,000. The note is secured by the
Company's parking garage a the note receivable from Providence
and Worcester Railroad Company (Railroad).
During the second quarter of 1995, Railroad informed the Company
that it had secured a commitment from a bank which would enable
it to borrow funds in an amount sufficient to prepay the entire
balance of Railroad's note to the Company at an interest rate
significantly below the 12% rate of the note. The Company and
Railroad negotiated a reduction of the interest rate on
Railroad's note to 10% upon the Railroad's prepaying $1.8
Million on its note. It is anticipated that the prepayment from
Railroad will be made in August 1995, at which time the Company
will use the proceeds to prepay in full its note payable to a
bank.
The prepayment by Railroad and the interest rate adjustment will
result in a reduction of the monthly payment by Railroad of
principal and interest from $83,000 to $55,000.
Results of operations:
For the three and six months ended June 30, 1995, total income
increased approximately 20% and 14%, respectively, over the 1994
level. The increase in rental income resulted principally from
scheduled increased in long-term land leases and the recognition
of the excess of straight-line over contractual rents associated
with said leases. Also included in total income for the three
and six months ended June 30, 1995, is $75,000 resulting from
the sale of properties and equipment, principally the Company's
only billboard which was sold to its tenant. Such increases
were offset in part by a decrease in interest income on the note
receivable from Providence and Worcester Railroad Company
resulting from voluntary prepayments.
For the three ended June 30, 1995, expenses applicable to rental
income increased approximately 21% over the 1994 level due
principally to costs incurred in connection with the leak of a
tank at the Company's petroleum terminal storage facilities.
For the six months ended June 30, 1995, expenses applicable to
rental income increased approximately 23% over the 1994 level
due to the write-off of expenses previously deferred and the
leak of the tank previously discussed. For the three and six
months ended June 30, 1995, general and administrative expenses
increased approximately 57% and 33%, respectively, over the 1994
level due to costs of the severance package which resulted from
the resignation of the Company's president in June, 1995, and to
professional fees incurred in connection with the condemnation
case which is scheduled for retrial in August, 1995.
At June 30, 1994, the Company had two notes payable outstanding
with a bank, one of which was fully prepaid in September 1994.
For the three and six months ended June 30, 1995 the Company had
one note payable outstanding; however, the interest expense
remained at approximately the same level as in 1994 due to the
increase in the prime rate offset by the prepayment of one note.
<PAGE>
Future cash outlays for income taxes will be a more significant
portion of total tax expense and presently exceeds tax expense
for financial reporting purposes. This results principally from
the recognition of rental income on a contractual basis for tax
reporting purposes and to additional depreciation claimed for
financial reporting purposes.
<PAGE>
PART II
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of stockholders was held on April
26, 1995. Of the 1,000,000 shares entitled to vote,
881,077 shares of stock were present, in person or by
proxy.
All directors of the Issuer are elected on an annual
basis and the following were so elected at this
Annual Meeting: Theodore P. Cohen, Joseph R.
DiStefano, Barbara J. Dreyer, Harold J. Harris and
Henry S. Woodbridge, Jr. Each director received
877,697 affirmative votes; 3,380 abstained.
Also presented for approval was a resolution for the
appointment of Lefkowitz, Garfinkel, Champi &
DeRienzo P. C. as independent auditors of the
accounts of the Issuer for the year 1994. The
resolution received 874,190 affirmative votes and
6,561 negative votes; 326 abstained.
By consent vote effective June 30, 1995 the holders
of 523,246 shares of the outstanding common stock of
the Issuer adopted amendments to Article II, Section
2 of the by-laws of the Issuer, relating to the date
for the annual meeting of the shareholders of the
Issuer, and to Article III, Section 5 of the by-laws,
relating to the dates for the quarterly meetings of
the Board of Directors and the calling of special
meetings by the Board of Directors. A full copy of
the by-laws of the Issuer, as amended, is filed
herewith as Exhibit 3(b).
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(3) (a) Articles of Incorporation (incor-
porated by reference to Exhibit 3 to the
Issuer's annual report on form 10-K for the
year ended December 31, 1988).
(b) By-laws, as amended.
(10) (a) Agreement with Joseph R. DiStefano
dated July 14, 1995 but effective upon
approval of terms by the Issuer's Board of
Directors on June 30, 1995.
<PAGE>
(b) Note from Providence and Worcester
Railroad Company to Issuer dated January 1,
1988 (incorporated by reference to Exhibit
10(a) to the Issuer's annual report on Form
10-KSB for the year ended December 31,
1992).
(c) Lease between Whiteco Metrocom, Inc.
and Issuer dated June 25, 1985
(incorporated by reference to Exhibit 10(b)
to the Issuer's annual report on Form 10-
KSB for the year ended December 31, 1992)
as amended, March 13, 1995.
(d) Leases between Metropark, Ltd. and
Issuer:
(i) Dated November 10, 1994 (incor-
porated by reference to Exhibit 10(c)(i) to
the Issuer's annual report on Form 10-KSB
for the year ended December 31, 1994).
(ii) Dated November 10, 1994 (incor-
porated by reference to Exhibit 10(c)(ii)
to the Issuer's annual report on Form 10-
KSB for the year ended December 31, 1994).
(iii) Dated November 10, 1994 (incor-
porated by reference to Exhibit 10(c)(iii)
to the Issuer's annual report on Form 10-
KSB for the year ended December 31, 1994).
(22) Letter to shareholders dated June 30, 1995,
relating to vote on by-law amendments and other
matters.
(b) Reports on Form 8-K
A report on Form 8-K was filed on June 30, 1995
reporting the resignation of the Issuer's
president on June 28, 1995.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange
Act, the issuer caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CAPITAL PROPERTIES, INC.
By/s/ Barbara J. Dreyer
Barbara J. Dreyer
President, Treasurer and
Principal Financial Officer
DATED: August 3, 1995
<PAGE>
EXHIBIT 3(b)
BY-LAWS
OF
CAPITAL PROPERTIES, INC.
ARTICLE I
OFFICES
Section 1. The principal offices of the corporation shall be in
the County of Providence and State of Rhode Island.
Section 2. The corporation may also have offices at such other
places both within and without the State of Rhode Island as the
Board of Directors may from time to time determine or the business
of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All annual meetings of the stockholders for the
election of directors shall be held within or without the State of
Rhode Island at such place as may be fixed from time to time by the
Board of Directors; at least ten days' notice shall be given to the
stockholders of the place so fixed. Meetings of stockholders for
any other purpose may be held at such time and place, within or
without the State of Rhode Island, as shall be stated in the notice
of the meeting.
Section 2. Annual meetings of stockholders, commencing with the
year 1986, shall be held on the Tuesday next preceding the last
Wednesday in April, if not a legal holiday in the State of Rhode
Island, and if a legal holiday in the State of Rhode Island, then on
the secular day next following, at which they shall elect a Board of
Directors and transact such other business as may properly be
brought before the meeting.
<PAGE>
Section 3. Written notice of the annual meeting shall be given
to each stockholder of record at least ten days before the date of
the meeting.
Section 4. Special meetings of the stockholders, for any
purpose or purposes, may be called by the President and shall be
called by the President or Secretary at the request in writing of a
majority of the Board of Directors. Such request shall state the
purpose or purposes of the proposed meeting.
Section 5. Written notice of any special meeting of
stockholders, stating the time, place and purpose thereof, shall be
given to each stockholder of record at least ten days before the
date fixed for the meeting.
Section 6. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
Section 7. Stockholders representing a majority of the shares
entitled to vote, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the
transaction of business. If, however, such quorum shall not be
present or represented at any meeting of the stockholders, the
stockholders present in person or represented by proxy, shall have
power to adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be
present or represented any business may be transacted at the meeting
as originally notified.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the
whole Board of Directors shall be not less than five nor more than
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<PAGE>
nine. Within the foregoing limits, the number of directors to
constitute the whole Board shall be fixed by vote of the Board of
Directors at any regular or special meeting of the Board of
Directors, or by the stockholders at the annual meeting. If,
pursuant to the foregoing authority, the number of directors
constituting the whole Board shall be decreased, such decrease shall
not be effective with respect to the terms of directors then holding
office until the next annual meeting of stockholders. The directors
shall be elected at the annual meeting of the stockholders, except
as provided in Section 2 of this Article, and each director elected
shall hold office until his successor is elected and qualified. No
person who shall have reached the age of seventy (70) years shall be
eligible to be elected a director of the corporation.
Section 2. Vacancies may be filled by a majority of the
directors then in office though less than a quorum, and the
directors so chosen shall hold office until the next annual election
and until their successors are duly elected and shall qualify. A
vacancy or vacancies shall be deemed to exist at any time the number
of directors then in office is less than the whole Board as provided
in Section 1, above.
Section 3. The business of the corporation shall be managed by
its Board of Directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by
statute or by the articles of incorporation or by these by-laws
directed or required to be exercised or done by the stockholders.
Section 4. The Board of Directors of the corporation may hold
meetings, both regular and special, either within or without the
State of Rhode Island.
3
<PAGE>
Section 5. The Board of Directors shall hold a meeting
immediately after each annual meeting of stockholders, at which
meeting they shall elect a President, a Vice President, a Treasurer
and a Secretary, provided, however, that they may adjourn said
meeting to such time as they see fit, and elect said officers at
said adjourned meeting. They may also, at any annual meeting or at
any adjournment thereof, transact any other business which may be
properly brought before them. Regular quarterly meetings of
directors shall be held on the Tuesday next preceding the last
Wednesday in each of the months of January, July and October.
Special meetings of the directors shall be held upon the call of the
Chairman of the Board, the President, any Vice President or the
Treasurer. The Secretary shall give each director notice, by mail,
telephone or telecopy, at least twenty-four hours before any
meeting, whether regular or special, of the time and place of such
meeting; provided, that in the case of necessity, such notice may be
given at such time and in such manner as the President may direct.
Section 6. At all meetings of the Board of Directors the
presence of a majority of the directors shall constitute a quorum
for the transaction of business and the act of a majority of the
directors present at any meeting at which there is a quorum shall be
the act of the Board of Directors. If a quorum shall not be present
at any meeting of the Board of Directors, the directors present
thereat may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be
present.
Section 7. The Board of Directors may, by resolution passed by
a majority of the directors, designate one or more committees, each
committee to consist of three or more of the directors of the
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<PAGE>
corporation, which, to the extent provided in the resolution, shall
have and may exercise the powers of the Board of Directors in the
management of the business and affairs of the corporation and may
authorize the seal of the corporation to be affixed to all papers
which may require it. Such committee or committees shall have such
name or names as may be determined from time to time by resolution
adopted by the Board of Directors.
Section 8. The committees shall keep regular minutes of their
proceedings and report the same to the Board of Directors when
required.
Section 9. The directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid
a fixed sum for attendance at each meeting of the Board of
Directors, such fixed sum to be determined by the Board of
Directors. No such payment shall preclude any director from serving
the corporation in any other capacity and receiving compensation
therefor.
Section 10. Any or all of the directors may be removed with or
without cause by vote of the holders of a majority of the oustanding
common stock of the Company.
ARTICLE IV
OFFICERS
Section 1. The initial officers of the corporation shall be
chosen by the incorporator or the Board of Directors and shall be a
President, a Vice President, a Secretary and a Treasurer. The
offices of Treasurer and Secretary may be held by the same person.
The President shall be a director of the corporation.
Section 2. The Board of Directors may appoint such other
officers and agents as it shall deem necessary who shall hold their
5
<PAGE>
offices for such terms and shall exercise such powers and perform
such duties as shall be determined from time to time by the Board.
Section 3. The salaries of all officers of the corporation
shall be fixed by the Board of Directors.
Section 4. The officers of the corporation shall hold office
until their successors are chosen and qualify. Any officer elected
or appointed by the Board of Directors may be removed at any time by
the affirmative vote of a majority of the Board of Directors. Any
vacancy occurring in any office of the corporation by death,
resignation, removal or otherwise shall be filled by the Board of
Directors.
Section 5. The President shall be the chief executive officer
of the corporation. He shall preside at all meetings of the Board
and of the corporation, but, in his absence, either of said bodies
may elect a president pro tem. The President shall be a member of
all standing committees and shall have general and active management
of the business of the corporation and shall see that all orders and
resolutions of the Board of Directors are carried into effect. The
President may call a special meeting of the Board at any time, and
shall call such a special meeting whenever requested to do so by a
majority of the directors. He shall, with the Treasurer or
Secretary, sign all certificates of stock in the corporation, and
shall perform all other duties required of him by law or by the
articles of incorporation.
Section 6. The Secretary shall attend all meetings of the Board
of Directors and all meetings of the stockholders and record all the
proceedings of the meetings of the corporation and of the Board of
Directors in a book to be kept for that purpose and shall perform
like duties for the standing committees. He shall give, or cause to
6
<PAGE>
be given, notice of all meetings of the stockholders and special
meetings of the Board of Directors, and shall perform such other
duties as may be prescribed by the Board of Directors or President,
under whose supervision he shall be. He shall keep in safe custody
the seal of the corporation, and, when authorized by the Board of
Directors, affix the same to any instrument requiring it and, when
so affixed, it shall be attested by his signature or by the
signature of the Treasurer.
Section 7. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable effects
in the name and to the credit of the corporation in such
depositories as may be designated by the Board of Directors. He
shall disburse the funds of the corporation, taking proper vouchers
for such disbursements, and shall render to the President and the
Board of Directors when requested an account of all his transactions
as Treasurer and of the financial condition of the corporation. If
required by the Board of Directors, he shall give the corporation a
bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance
of the duties of his office and for the restoration to the
corporation, in case of his death, resignation, retirement or
removal from office of all books, papers, vouchers, money and other
property of whatever kind in his possession or under his control
belonging to the corporation.
7
<PAGE>
ARTICLE V
CERTIFICATE OF STOCK
Section 1. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of, the
corporation, by the President and Treasurer or Secretary, certifying
the number of shares owned by him in the corporation.
Section 2. Where a certificate is signed (1) by a transfer
agent or an assistant transfer agent or (2) by a transfer clerk
acting on behalf of the corporation and a registrar, the signature
of any such President, Secretary or Treasurer may be facsimile. In
case any officer or officers who have signed, or whose facsimile
signature or signatures have been used on, any such certificate or
certificates shall cease to be such officer or officers of the
corporation, whether because of death, resignation or otherwise,
before such certificate or certificates have been delivered by the
corporation, such certificate or certificates may nevertheless be
adopted by the corporation and be issued and delivered as though the
person or persons who signed such certificate or certificates or
whose facsimile signature has been used thereon, had not ceased to
be such officer officers of the corporation.
Section 3. The Board of Directors may direct a new certificate
or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have
been lost or destroyed, upon the making of an affidavit of that fact
by the person claiming the certificate of stock to be lost or
destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of
such lost or destroyed certificate or certificates, or his legal
8
<PAGE>
representative, to advertise the same in such manner as it shall
require and/or to give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been
lost or destroyed.
Section 4. Upon surrender to the corporation or the transfer
agent of the corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or
authority to transfer, it shall be the duty of the corporation to
issue a new certificate to the person entitled thereto, cancel the
old certificate and record the transaction upon its books.
Section 5. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of
shares to receive dividends, and to vote as such owner, and shall
not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof.
ARTICLE VI
GENERAL PROVISIONS
Section 1. The President shall present at each annual meeting a
statement of the business and condition of the corporation.
Section 2. All checks or demand for money and notes of the
corporation shall be signed by such officer or officers or such
other person or persons as the Board of Directors may from time to
time designate.
Section 3. The fiscal year of the corporation shall commence
the first day of January in each year.
Section 4. The corporate seal shall have inscribed thereon the
name of the corporation, the year of its organization and the words
9
<PAGE>
"Corporate Seal, Rhode Island". The seal may be used by causing it
or a facsimile thereof to be impressed, affixed or reproduced or
otherwise.
ARTICLE VII
REPEAL AND AMENDMENT OF BY-LAWS
These By-laws may be amended or repealed at any annual or
special meeting of the stockholders, provided that they shall not be
amended or repealed at a special meeting unless notice that it is
proposed to amend or repeal them is given by the Secretary in his
notice of such meeting. The Board of Directors shall not have
authority to amend these By-laws.
ARTICLE VIII
INDEMNIFICATION OF DIRECTORS
The corporation shall indemnify, to the full extent permitted by
law from time to time, any person who is or was a director of the
corporation and any person who, while a director of the corporation,
is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee or agent of another foreign or
domestic corporation, partnership, joint venture, trust, other
enterprise or employee benefit plan, against all judgments,
penalties, fines, settlements and reasonable expenses actually
incurred by such person in connection with any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, in which such person was, is or is
threatened to be made a named defendant or respondent by reason of
the fact that such person is serving or at any time was serving in
one or more of the capacities set forth above.
10
<PAGE>
EXHIBIT 10(a)
AGREEMENT
This agreement is made as of the 14th day of July, 1995 by
and between CAPITAL PROPERTIES, INC., a Rhode Island corporation
(the "Company"), and JOSEPH R. DI STEFANO, of Jamestown, Rhode
Island ("DiStefano"), with respect to the following facts:
1. DiStefano resigned as President and as a member of the
Board of Directors of the Company on June 28, 1995, by
letter of the same date (the "Resignation Letter").
2. The Resignation Letter contemplated the payment to
DiStefano, subject to approval by the Board of
Directors of the Company, of certain amounts, subject
to repayment or offset as provided in the Regisnation
Letter.
3. The Board of Directors of the Company on June 30, 1995
approved such payments, subject to repayment or
offset under the circumstances more particularly
described in the Resignation Letter.
4. The parties wish to evidence their respective rights
and obligations as contemplated by the Resignation
Letter and as approved by the Board of Directors of the
Company.
NOW THEREFORE, in consideration of the premises and their
mutual agreements set forth hereinafter, the parties do hereby
agree as follows:
1. Severance Benefit
In consideration of DiStefano's past services to the
Company the Company will pay to DiStefano the sum of $120,000,
such amount to be payable in six monthly installments of $20,000
each, less all withholdings required by law, commencing July 31,
1995 and continuing on the last business day of each month
thereafter.
2. Repayment; Offset
The amounts otherwise payable to DiStefano pursuant to
Paragraph 1 shall be subject to repayment or offset in the
amounts and to the extent provided in the Resignation Letter,
the terms of which are incorporated herein by this reference.
3. Confirmation of Resignation Letter
In consideration of such payments as may be made to him
hereunder, DiStefano specfically confirms all agreements and all
releases and waivers of rights and claims as provided in the
Resignation Letter, and agrees that nothing herein shall be
deemed to amend or modify any such agreements, releases or
waivers.
4. Binding Effect
This agreemnt shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs,
executors and administratos, successors and assigns.
IN WITNESS WHEREOF, the parties have executed this
agreement as of the date first above mentioned.
CAPITAL PROPERTIES, INC.
By/s/ Barbara J. Dreyer
President
/s/ Joseph R. DiStefano
Joseph R. DiStefano
<PAGE>
EXHIBIT 10(c)
AMENDMENT
TO LEASE AGREEMENT DATED JUNE 25, 1985
This Amendment to Lease Agreement dated June 25, 1985, is
entered into as of the 13th day of March, 1995, by and between Tri-
State Displays, Inc. (hereinafter "Lessor") and Whiteco Outdoor
Advertising, a division of Whiteco Industries, Inc. (hereinafter
"Lessee").
WITNESSETH
WHEREAS, Whiteco Metrocom, Inc., then a subsidiary of Whiteco
Industries, Inc. and Tri-State Displays, Inc. entered into a Lease
Agreement dated June 25, 1985; and
WHEREAS, Whiteco Metrocom, Inc. was merged into its parent,
Whiteco Industries, Inc., and Whiteco Industries, Inc. succeeded to
and assumed all of the rights and obligations of Whiteco Metrocom,
Inc. under said Lease Agreement; and
WHEREAS, Whiteco Industries, Inc. conducts its outdoor adver-
tising business through a division called Whiteco Outdoor
Advertising; and
WHEREAS, through its said outdoor advertising division, Whiteco
Industries, Inc. has acquired the outdoor advertising assets of
Metro Bulletins Corp. effective March 13, 1995, including four
double-faced billboard structures in Worcester, Massachusetts, each
of which is erected upon a separate location owned by the Lessor.
These four Worcester location were formerly leased by Lessor to
Metro Bulletins Corp. under a Lease Agreement dated February 22,
-1-
<PAGE>
1991, which Lease Agreement has been cancelled effective March 13,
1995; and
WHEREAS, Lessor and Lessee wish to amend the Lease Agreement
dated June 25, 1985, by adding thereto the aforementioned four
Worcester locations together with a fifth Worcester location for
which permits are soon expected to be obtained allowing for the
construction of a new double-faced billboard at such fifth location;
and
WHEREAS, the Lessor and Lessee wish to amend said Lease
Agreement dated June 25, 1985, in other respects, as hereinafter
provided, and have agreed upon the rentals to be paid for all
locations covered by said Lease Agreement for periods commencing
June 1, 1995, and ending May 31, 2006;
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the parties agree as follows:
1. The Lease Agreement dated June 25, 1985, as heretofore
amended, is hereby further amended, effective March 13, 1995, by
adding thereto a new Supplement No. 7 in the form appended hereto
and made a part hereof.
2. Said Lease Agreement is hereby further amended, effective
June 1, 1995, by deleting Paragraph 3 in its entirety and replacing
the same with a new Paragraph 3 as follows:
3. All locations currently listed on Rider A and
Supplements 1 through 7 thereto are delineated as "Inter-
state Locations," except for the locations listed imme-
diately below which are hereby delineated as "Freeway
Locations."
-2-
<PAGE>
Freeway Locations
A. Route 37, Cranston
B. Huntington Expressway, Route 10 at Garfield Street,
Cranston
C. I-295 at West Natick Road, Warwick
D. Route 37, Cranston (north side)
E. Route 37 at Jefferson Blvd., Warwick
F. I-195 at West Natick Road, Warwick (west side)
G. Route 6, Hartford Avenue, Johnston, RI
H. W/O Route 146 (south of Admiral Street)
Providence
All locations hereafter added to this Lease Agreement
by Supplement to Rider A shall be identified as either
Interstate (I) or Freeway (F) on such supplement.
3. Said Lease agreement is further amended, effective June 1,
1995, by deleting Paragraph 4 in its entirety and replacing the same
with a new Paragraph 4 as follows:
4 (a). Subject to Paragraph 8 below, rentals for
locations now or hereafter subject to the Lease Agreement
for the term of this Lease Agreement shall be the greater
of:
(i) For Interstate Locations
Period Rate
June 1, 1995-May 31, 1996 - $ 850 per month per face
June 1, 1996-May 31, 1998 - $ 900 per month per face
June 1, 1998-May 31, 2000 - $1,000 per month per face
June 1, 2000-May 31, 2002 - $1,100 per month per face
June 1, 2002-May 31, 2004 - $1,200 per month per face
-3-
<PAGE>
June 1, 2004-May 31, 2006 - $1,300 per month per face
For Freeway Locations
Period Rate
June 1, 1995-May 31, 1998 - $ 750 per month per face
June 1, 1998-May 31, 2000 - $ 800 per month per face
June 1, 2000-May 31, 2002 - $ 900 per month per face
June 1, 2002-May 31, 2004 - $1,000 per month per face
June 1, 2004-May 31, 2006 - $1,100 per month per face
or
(ii) Until May 31, 1998, 25% and thereafter 30%
of gross revenues from the rental of such billboards to
advertisers less agency commissions actually paid to
unrelated third parties calculated on each billboard face.
Agency commissions shall not exceed 15%. Lessee will use
its best efforts to rent all billboard faces at not less
than commercially reasonable rates for the area in which
such billboard is located. In no event shall the Lessor
receive less than the fixed monthly rent for a billboard
face, even if the percentage rent for such face is less
than said fixed monthly rent. No credit shall be given to
Lessee for any face where the percentage rent is less than
the fixed monthly rent. Lessor shall have the right to
inspect the books, records and contracts of Lessee in order
to verify Lessee's calculations of percentage rent.
Percentage rent shall be calculated following the
conclusion of each lease year (June 1 to May 31) and a
statement shall be prepared by Lessee and sent to Lessor
-4-
<PAGE>
within forty-five (45) days of the close of each lease year
showing the revenues, commissions, etc., for each billboard
face. If such statement shall show that percentage rent
exceeds the fixed monthly rental for any billboard face,
said statement shall be accompanied by Lessee's check for
the amount due to Lessor. Effective June 1, 1995, any
other written agreements between Lessor and Lessee relating
to fixed monthly rentals or percentage rentals which
conflict with the provisions of this Paragraph 4 are null
and void.
(b) As of June 1, 2006, new monthly rates are to
be determined by Lessor and Lessee, but at no less than the
May 2006 monthly rates for Interstate and Freeway
Locations. If the parties cannot agree on new monthly rent
figures, either party may demand arbitration. If the
parties have been unable by March 1, 2006, to agree on new
monthly rent figures for the period following May 31, 2006,
then either party shall have until March 15, 2006, to
notify the other party in writing of its demand for
arbitration, such arbitration to be conducted as
hereinafter provided. Accompanying said notice shall be
the name of an arbitrator selected by the party demanding
arbitration. By March 31, 2006, the other party shall be
required to name an arbitrator, and by April 15, 2006, the
two arbitrators so selected shall name a third neutral
arbitrator; and if they are unable to agree, a third
neutral arbitrator must be named by April 25, 2006, by the
-5-
<PAGE>
presiding justice of the Rhode Island Superior Court upon
joint application of the parties. The arbitrators shall
commence the arbitration proceedings forthwith and their
majority decision, which shall be binding upon the parties,
shall be issued no later than May 31, 2006. All
arbitration proceedings shall be conducted at Providence,
Rhode Island under rules of the American Arbitration
Association, except as such rules may be modified by the
provisions of this paragraph. If neither party demands
arbitration, the Lease Agreement shall be immediately
cancelled as of June 1, 2006, and Lessor shall have the
right to purchase all of the Billboard structures as
provided hereinafter. Any such agreement by the parties,
or any arbitration in lieu of said agreement, shall be for
each year of the next ensuing five (5) year period, so that
the necessity for negotiating new monthly rates for each
annual period will be eliminated. The rental for each year
of said five (5) year period may vary. The same procedures
shall apply at the expiration of each additional five (5)
year period during the term of this Lease Agreement. The
cost of such arbitration is to be paid by the party whose
rates for said five (5) year period in question in total
are the furthest from the decision of the arbitrator.
(c) All fixed monthly rental payments shall be
made monthly in advance on the first day of each month
during the term of the Lease Agreement.
-6-
<PAGE>
4. Except as herein amended, said Lease Agreement dated June
25, 1985 as heretofore amended shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the 13th day of March, 1995.
TRI-STATE DISPLAYS, INC.
By/s/ Barbara J. Dreyer
Barbara J. Dreyer, President
WHITECO OUTDOOR ADVERTISING, a
Division of Whiteco Industries,
Inc.
By/s/ Jack A. Dodds
STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE
In Providence on the 11th day of April, 1995, before me
personally appeared Barbara J. Dreyer, President of Tri-State
Displays, Inc., to me known and known by me to be the party
executing the foregoing instrument, and did acknowledge that said
instrument by her executed was her free act and deed and the free
act and deed of Tri-State Displays, Inc.
/s/ Joseph R. DiStefano
Notary Public
-7-
<PAGE>
STATE OF INDIANA
COUNTY OF LAKE
In Lake on the 18th day of April, 1995, before me personally
appeared Jack A. Dodds, Sr. Vice-Pres.Administration of Whiteco
Industries, Inc., (Whiteco Outdoor Advertising Division), to me
known and known by me to be the party executing the foregoing
instrument, and did acknowledge that said instrument by him executed
was his free act and deed and the free act and deed of Whiteco
Industries, Inc.
/s/ Mary Ellen Kupsik
Notary Public
-8-
<PAGE>
EXHIBIT 22
CAPITAL PROPERTIES, INC.
One Hospital Trust Plaza
Suite 920
Providence, Rhode Island 02903
Phone (401) 331-0100
June 30, 1995
To the Shareholders of
Capital Properties, Inc.:
I regret to report to you the resignation for personal
reasons earlier this week of Joseph R. DiStefano as
President and as a director of Capital Properties, Inc. (the
"Company"). Joe was affiliated with the Company and its
predecessors for nearly thirty years and was instrumental in
establishing the Company as the largest private landowner
and lessor in Capital Center in downtown Providence. His
services will be missed.
At a special meeting held today the board of directors
elected me to fill the vacancy on the board created by Joe's
resignation, and I will serve as Chairman of the Board
without compensation or director fees. My wife, Linda, and
I are the owners of a majority of the outstanding common
stock of the Company; I am an attorney and am Chairman of
Providence and Worcester Railroad Company. My wife is Vice
President of the Company and will continue in that office.
The board also elected Barbara J. Dreyer, who has for many
years served as Secretary, Treasurer and chief financial
officer of the Company, as President and Treasurer, and
Edwin G. Torrance and Stephen J. Carlotti, both partners in
the Providence law firm of Hinckley, Allen & Snyder, as
Secretary and Assistant Secretary, respectively. Messrs.
Torrance and Carlotti will serve without compensation.
I am confident that the Company's primary business, that of
leasing its Capital Center parcels as that project continues
to develop, will be ably administered by the officers and
board of directors.
I should also report to you, as recommended by the board and
as permitted by the Company's articles of incorporation, my
wife, Linda, and I, as the owners of a majority of the
outstanding common stock of the Company, have voted our
shares to effect three amendments to the Company's by-laws:
<PAGE>
To the Shareholders of
Capital Properties, Inc.
June 30, 1995
Page Two
1. To change the date for the annual stockholders
meeting to the Tuesday preceding the last Wednesday
in April of each year.
2. To provide for the holding of quarterly board
meetings on the day of the annual stockholders
meeting and on the Tuesday preceding the last
Wednesday in the months of July, October and
January.
3. To provide that special meetings of the board of
directors may be called by the Chairman of the
Board, the President, any Vice President or the
Treasurer.
The full texts of the amendments are available to any
stockholder uponrequest.
I appreciate your continuing confidence in Capital
Properties, Inc.
Very truly yours,
/S/ Robert H. Eder
Robert H. Eder
Chairman of the Board
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 760
<SECURITIES> 0
<RECEIVABLES> 6698
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 13439
<DEPRECIATION> 3882
<TOTAL-ASSETS> 17474
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 1000
0
0
<OTHER-SE> 12532
<TOTAL-LIABILITY-AND-EQUITY> 17474
<SALES> 0
<TOTAL-REVENUES> 845
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 736
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 46
<INCOME-PRETAX> 63
<INCOME-TAX> 37
<INCOME-CONTINUING> 26
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26
<EPS-PRIMARY> .03
<EPS-DILUTED> 0
</TABLE>
