CAPITAL PROPERTIES, INC.
100 Dexter Road
East Providence, Rhode Island 02914
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 27, 1999
PLEASE TAKE NOTICE that the 1999 annual meeting of shareholders of Capital
Properties, Inc. (the "Company") will be held at the offices of Hinckley,
Allen and Snyder, 1500 Fleet Center in Providence, Rhode Island, on Tuesday,
April 27, 1999 at 2:00 o'clock P.M., local time, for the following purposes:
(1) To amend the By-laws to eliminate mandatory retirement
age for directors;
(2) To amend the By-laws to provide that further
amendments to the By-laws may be adopted by a majority
vote of either the board of directors or the
shareholders;
(3) To elect five directors to serve for a term of one
year until their successors are elected and qualified;
(4) To approve the appointment of Lefkowitz, Garfinkel,
Champi & DeRienzo P.C. as independent auditors of the
accounts of the Company for 1999; and
(5) To transact such other business, if any, as may
properly come before the meeting or any adjournment or
adjournments thereof.
Holders of record of the common stock on the books of the Company as of the
close of business on March 1, 1999 will be entitled to vote.
By Order of the Board of Directors
STEPHEN J. CARLOTTI
Secretary
East Providence, Rhode Island
March 25, 1999
Kindly fill in, date and sign the enclosed proxy and promptly return it in the
enclosed addressed envelope, which requires no postage if mailed in the United
States. If you are personally present at the meeting, the proxy will not be
used without your consent.
<PAGE>
CAPITAL PROPERTIES, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 27, 1999
SOLICITATION AND REVOCATION OF PROXIES
The accompanying proxy is solicited by the Board of Directors of Capital
Properties, Inc. (the "Company"), in connection with the annual meeting of
shareholders to be held April 27, 1999, and the Company will bear the cost of
such solicitation. It is expected that the solicitation of proxies will be
primarily by mail. Proxies may also be solicited personally by regular
employees of the Company at nominal cost. The Company may reimburse brokerage
houses and other custodians, nominees and fiduciaries holding stock for others
in their names, or in those of their nominees, for their reasonable out-of-
pocket expenses in sending proxy materials to their principals or beneficial
owners and obtaining their proxies. Any shareholder giving a proxy has the
power to revoke it at any time prior to its exercise, but the revocation of a
proxy will not be effective until notice thereof has been given to the
Secretary of the Company. Notice of revocation may be delivered in writing to
the Secretary prior to the meeting or may be transmitted orally to the
Secretary at the meeting. Every properly signed proxy will be voted in
accordance with the specifications made thereon.
This proxy statement and the accompanying proxy are expected to be first sent
to shareholders on March 25, 1999.
VOTING AT MEETING
Only shareholders of record at the close of business on March 1, 1999, will be
entitled to vote at the meeting. Under the Company's articles of
incorporation, each shareholder has one vote for every share owned. On the
record date, there were 3,000,000 shares of common stock of the Company
outstanding. There were no other outstanding securities of the Company
entitled to vote.
The directors will be elected in each case by vote of the holders of a
majority of the shares present or represented at the meeting.
Shares represented by proxies which are marked "withhold authority" with
respect to the election of any particular nominee for director, "abstain" with
respect to amending the By-laws, the approval of independent auditors, or to
deny discretionary authority on any other matters will be counted as shares
present and entitled to vote, and accordingly any such marking of a proxy will
have the same effect as a vote against the proposal to which it relates.
Brokers who hold shares in street name may lack authority to vote such shares
on certain items, absent specific instructions from their customers. Shares
subject to such "broker non-votes" will not be treated as shares entitled to
vote on the matters to which they relate and therefore will be treated as not
present at the meeting for those purposes, but otherwise will have no effect
on the outcome of the voting on such matters. It is not presently anticipated
that any matter which might be the subject of a "broker non-vote" will come
before the annual meeting.
AMENDMENTS TO BY-LAWS
The Board of Directors proposes to amend the By-laws of the Company in two
respects. One relates to the eligibility of directors (Item 1) and the other
to the procedure to amend the By-laws (Item 2).
Item 1: Eligibility to Serve as a Director
The present By-laws provide that any person who has attained the age of 70
years is no longer eligible to be elected as a director. The Board of
Directors believes that this limitation will force the Company to lose the
services of valuable board members with substantial knowledge of the Company's
history and operations. The proposed amendment would eliminate this age
limitation by deleting the last sentence of Article III, Section 1 of the By-
laws.
Item 2: Procedure to Amend the By-laws
Currently, the By-laws may only be amended or repealed at a meeting of the
shareholders by the vote of a majority of the shares present or represented at
the meeting. The Board of Directors believes that this provision unduly
restricts the Board's authority in establishing rules of governance and is
inconsistent with the current practice of most publicly held corporations.
Accordingly, the proposed amendment to Article VII of the By-laws would
provide that either the Board of Directors or the shareholders could amend the
By-laws. Amendments by the directors would require the vote of a majority of
the directors while amendments by the shareholders would require the
affirmative vote of a majority of the shares issued and outstanding and
entitled to vote. The text of the amendment (which restates Article VII of
the By-laws in its entirety) is as follows:
"These By-laws may be altered, amended or repealed, or new By-laws
may be adopted at any annual or special meeting of the
shareholders by an affirmative vote of a majority of the shares
issued and outstanding and entitled to vote; provided, however,
that notice of such alteration, amendment, repeal or adoption of
new By-laws shall be contained in the notice of such meeting. The
Board of Directors shall have like authority to alter, amend,
repeal or adopt new By-laws by an affirmative vote of majority of
the number of Directors fixed as provided in these By-laws;
provided, however, that any action in that respect by the Board of
Directors may be changed thereafter by the shareholders."
Vote Required
The approval of both proposed amendments to the By-laws requires the
affirmative vote of a majority of the shares present or represented at the
meeting.
ELECTION OF DIRECTORS
At the annual meeting, five directors are to be elected to hold office until
the next annual meeting and until their respective successors are elected and
qualified. The proxies named in the accompanying proxy, who have been
designated by the Board of Directors, intend to vote, unless otherwise
instructed, for the election to the Board of Directors of the persons named
below, all of whom are now directors of the Company. Certain information
concerning such nominees is set forth below:
<TABLE>
<S> <C> <C>
Principal Occupation Director
Name and Age During Past Five Years Since
Robert H. Eder (66) Chairman of the Company, June 30, 1995 1995
to present; Chairman, Providence and
Worcester Railroad Company, 1983 to
present
Ronald P. Chrzanowski (56) President of the Company, January 1, 1998
1998 to present; Vice President of the
Company, November 12, 1997 to December
31, 1997; Vice President of Providence
and Worcester Railroad Company,
1983-1997
James H. Dodge (58) Chairman, Chief Executive Officer and 1997
President, Providence Energy Corporation
Harold J. Harris (70) President, Wm. H. Harris, Inc. 1995
(Retailer)
Henry S. Woodbridge, Jr. (70) Consultant 1990
</TABLE>
Mr. Eder is also a director of Providence and Worcester Railroad Company. Mr.
Dodge is also a director of Providence Energy Corporation. Mr. Harris is also
a director of The Fairchild Corporation.
The Board of Directors has an Audit Committee and a Compensation Committee
both currently comprised of Messrs. Dodge, Harris and Woodbridge. The Audit
Committee is responsible for overseeing the establishment and maintenance of
an effective financial control environment for the Company, for overseeing
procedures for evaluating the system of internal accounting control and for
evaluating audit performance. The Compensation Committee is responsible for
recommending to the full Board of Directors appropriate compensation levels
for all officers of the Company. The Board does not have a nominating
committee or a committee performing a similar function.
The Board of Directors held four meetings during the fiscal year ended
December 31, 1998 and the Audit Committee and Compensation Committee each held
two meetings during the fiscal year ended December 31, 1998.
Directors, other than directors who are employed by the Company, received a
fee of $750 for attendance at each meeting of the Board of Directors,
together with related transportation and living expenses. Each member of the
Audit and Compensation Committee received $250 for each attended meeting of
that committee.
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid or accrued by the Company
during the three-year period ended December 31, 1998, to each of its executive
officers who earned more than $100,000 in salary and bonus in 1998, for
services rendered in all capacities to the Company during 1998.
SUMMARY COMPENSATION TABLE
Annual Compensation
<TABLE>
<S> <C> <C> <C>
Name and Principal All Other
Position Year Salary Compensation(1)
Robert H. Eder, Chairman 1998 $155,000 $ --
1997 155,000 --
Ronald P. Chrzanowski, 1998 150,000 11,250
President 1997 2,250 --
Barbara J. Dreyer, Treasurer 1998 109,000 8,175
1997 150,000 11,250
1996 150,000 11,250
</TABLE>
(1) Amounts paid directly to the retirement accounts of employees under the
Company's simplified employee pension plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
On March 1, 1999, to the best of the Company's knowledge, no person (including
any "group", as that term is used in Section 13(d)(3) of the Securities
Exchange Act of 1934) was the beneficial owner of more than five per cent of
the Company's outstanding common stock, $1.00 par value, except as follows:
<TABLE>
<S> <C> <C>
Number of Percent
Name and Address shares held of Class
Robert H. Eder and Linda Eder 1,569,738(1) 52.3%
2441 S.E. Bahia Way
Stuart, Florida 34996
Lance S. Gad 164,280 5.5%
250 Fence Row Drive
Fairfield, Connecticut 06430
</TABLE>
(1) Robert H. Eder and Linda Eder are husband and wife, and each holds
784,869 shares directly.
The following table reflects as of March 1, 1999, the beneficial ownership of
shares of common stock of the Company by directors, nominees for director and
officers of the Company, all shares being owned directly except as otherwise
noted:
<TABLE>
<S> <C> <C>
Name of Individual or Shares Percent
Identification of Group Owned of Class
Ronald P. Chrzanowski 2,060 *
James H. Dodge 300 *
Barbara J. Dreyer 6,000 *
Robert H. Eder (1) 1,569,738 52.3%
Harold J. Harris (2) 11,000 *
Henry S. Woodbridge, Jr. 4,500 *
All seven directors and officers
as a group 1,593,598 53.2%
</TABLE>
*Less than 1%
(1) Includes 784,869 shares held by his wife, Linda Eder.
(2) Includes 1,000 shares held by his wife in her name
CERTAIN TRANSACTIONS
In 1988, in accordance with a plan of distribution, the Company transferred
the ownership of Providence and Worcester Railroad Company (Railroad) to
the Company's shareholders. The Company and Railroad have a common
controlling shareholder. As part of the plan, the Company received a
promissory note in the amount of $9,377,000 payable over a period of twenty
years with interest at 12% per year, (reduced to 10% in 1995) prepayable at
any time without penalty. In March 1998, Railroad prepaid the note in full.
The Wilkesbarre Pier (the Pier) is a deep-water pier in East Providence, Rhode
Island, which is integral to the operation of the petroleum storage facilities
(the Facilities) in East Providence, Rhode Island. The Pier and the
Facilities are connected by two petroleum pipelines. In 1995, the Company and
Railroad (the owner of the Pier) entered into an agreement which, among other
provisions, gave the Company the right to acquire the Pier for $1.
Effective January 1, 1998, Railroad and a company which uses the Pier to off-
load product (Oil Company) entered into an agreement (the Agreement) whereby
Oil Company agreed to pay annual fees for five years, which range from
$185,000 to $235,000. Under the terms of the Agreement, the owner of the Pier
is not required to make any repairs to the Pier. The Agreement may be
terminated by Oil Company upon ninety (90) days' notice only in the event of a
failure of a component of the Pier that the owner does not repair.
In January 1998, the Company exercised its right and acquired the Pier; and
Railroad assigned its rights under the Agreement to the Company.
A trust for the benefit of the Company's controlling shareholder (the Trust)
was party to an agreement (the Pipeline Agreement) with respect to the use of
the two petroleum pipelines which connect the Pier to the Facilities. Since
February 1983, the Company and any operator of its Facilities have had the
right to use the pipelines for the transportation of petroleum products in
consideration for which the Company assumed all of the Trust's obligations for
repair and maintenance under the Pipeline Agreement and agreed to pay to the
Trust a fee based upon the number of barrels of product transported through
the pipelines. In 1997, the Company paid $20,000 to the Trust and was not
required to make any payment with respect to maintenance and other expenses.
In December 1997, the Trust entered into an agreement with the owner of the
two petroleum pipelines (Pipeline Company) which owns the two petroleum
pipelines, under which Pipeline Company released the Trust from liability in
connection with the pipelines for any costs incurred by Pipeline Company prior
to the date of the agreement. Further, under the agreement the Trust is
responsible for its proportionate share of any future repair or replacement to
the pipelines in excess of $25,000. The Company had the option to purchase the
rights of the Trust under the Pipeline Agreement and exercised its option in
January 1998, acquiring all rights of the Trust for $50,000.
INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has recommended that Lefkowitz,
Garfinkel, Champi & DeRienzo P.C., who acted as independent auditors of the
accounts of the Company for 1998, be appointed as independent auditors of the
accounts of the Company for the year 1999. The Company has recently been
advised by Lefkowitz, Garfinkel, Champi & DeRienzo P.C. that they have no
direct financial interest or any material indirect financial interest in the
Company, nor have they had any connection during the past three years with the
Company in the capacity of promoter, underwriter, voting trustee, director,
officer or employee.
It is expected that a representative of Lefkowitz, Garfinkel, Champi &
DeRienzo P.C. will be present at the annual meeting with the opportunity to
make a statement if he so desires and that such representative will be
available to respond to appropriate questions.
FINANCIAL STATEMENTS
A copy of the annual report of the Company for the year ended December 31,
1998 is enclosed. Such report is not part of this proxy statement.
ADDITIONAL INFORMATION
The Company will provide without charge to each shareholder entitled to vote
at the 1999 annual meeting, on the written request of any such shareholder, a
copy of the Company's annual report to the Securities and Exchange Commission
on Form 10-KSB for the year 1998. Requests for copies of such report should
be addressed to the Company at 100 Dexter Road, East Providence, Rhode Island
02914, Attention: Treasurer.
PROPOSALS FOR 2000 ANNUAL MEETING
The 2000 annual meeting of the shareholders of the Company is scheduled to be
held April 25, 2000. If a shareholder intending to present a proposal at that
meeting wishes to have a proper proposal included in the Company's proxy
statement and form of proxy relating to the meeting, the shareholder must
submit the proposal to the Company not later than November 25, 1999.
OTHER MATTERS
No business other than that set forth in the attached Notice of Meeting is
expected to come before the annual meeting, but should any other matters
requiring a vote of shareholders arise, including a question of adjourning the
meeting, the persons named in the accompanying proxy will vote thereon
according to their best judgment in the interests of the Company. In the
event any of the nominees for the office of director should withdraw or
otherwise become unavailable for reasons not presently known, the persons
named as proxies will vote for other persons in their place in what they
consider the best interests of the Company.
By Order of the Board of Directors
STEPHEN J. CARLOTTI
Secretary
Dated March 25, 1999
<PAGE>
CAPITAL PROPERTIES, INC.
Annual Meeting of Shareholders -- April 27, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned, whose signature appears on the reverse side of this proxy,
hereby appoints Robert H. Eder and Stephen J. Carlotti, or either of them,
each with full power of substitution, acting jointly or singly if only one be
present and acting, with all the powers the undersigned would possess if
personally present, to vote the stock of the undersigned in Capital
Properties, Inc. at the annual meeting of shareholders to be held on April 27,
1999 in Providence, Rhode Island, and at any adjournments thereof, as follows:
1. PROPOSAL TO AMEND THE BY-LAWS to eliminate mandatory retirement age for
directors.
_____FOR _____AGAINST _____ABSTAIN
2. PROPOSAL TO AMEND THE BY-LAWS to provide that further amendments to the
By-laws may be adopted by a majority vote of either the board of directors
or the shareholders.
_____FOR _____AGAINST _____ABSTAIN
3. ELECTION OF DIRECTORS:
FOR all nominees listed below WITHHOLD AUTHORITY to vote
except as marked to the for all nominees listed
contrary below ___ below ______
R. H. Eder, R. P. Chrzanowski, J. H. Dodge, H. J. Harris, and
H. S. Woodbridge, Jr.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
_________________________________________________________________
4. PROPOSAL TO APPROVE THE APPOINTMENT OF LEFKOWITZ, GARFINKEL, CHAMPI &
DERIENZO P.C. as independent public accountants of the Company for 1999.
_____FOR _____AGAINST _____ABSTAIN
5. In their discretion, upon such other matters as may properly
come before the meeting.
This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. If no
direction is made, this proxy will be voted for Proposals 1,
2, 3 and 4.
PLEASE SIGN, DATE AND RETURN THIS PROXY
(Sign exactly as your names appear Signed________________________________
hereon. When signing as attorney,
executor, administrator, trustee, ______________________________________
guardian or in a corporate capacity,
please give full title as such. Dated _____________________ 1999
In case of joint tenants or multiple
owners, each party must sign.)
