Edgar Filing: CAPITAL PROPERTIES INC /RI/

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

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CAPITAL PROPERTIES, INC.
100 DEXTER ROAD
EAST PROVIDENCE, RHODE ISLAND 02914

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

APRIL 27, 2004

PLEASE TAKE NOTICE that the 2004 annual meeting of shareholders of Capital
Properties, Inc. (the Company) will be held at the offices of Hinckley, Allen
and Snyder LLP, 1500 Fleet Center in Providence, Rhode Island, on Tuesday, April
27, 2004 at 2:00 o'clock P.M., local time, for the following purposes:

(1) To elect five directors to serve for a term of one year until
their successors are duly elected and qualified;

(2) To ratify the appointment of Lefkowitz, Garfinkel, Champi &
DeRienzo P.C. as independent auditors of the accounts of the
Company for 2004; and

(3) 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, 2004 will be entitled to vote.

By Order of the Board of Directors

STEPHEN J. CARLOTTI
Secretary

East Providence, Rhode Island
March 10, 2004

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.

CAPITAL PROPERTIES, INC.

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

APRIL 27, 2004

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, 2004. 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 or about March 19, 2004.

VOTING AT MEETING

Only shareholders of record at the close of business on March 1, 2004, will be
entitled to vote at the meeting. Under the Company's articles of incorporation,
as amended, each shareholder has one vote for every share of common stock owned.
On the record date, there were 3,000,000 shares of Class A Common Stock and
299,956 shares of Class B 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 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.

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:

Principal Occupation Director
Name and Age During Past Five Years Since
------------ ---------------------- -----

Ronald P. Chrzanowski (61)...... President of the Company, January 1, 1998 1998
to present

Robert H. Eder (71)............. Chairman of the Company, June 30, 1995 1995
to present; Chairman, Providence and
Worcester Railroad Company, 1983 to present

Harold J. Harris (75)........... President, Wm. H. Harris, Inc. (Retailer) 1995

Harris N. Rosen (71)............ Consultant and Mediator; Executive Director, 2001
Jewish Federation of Rhode Island, July to
October 2000

Henry S. Woodbridge, Jr. (75)... Consultant 1990

Mr. Eder is also a director of Providence and Worcester Railroad Company. Mr.
Harris is also a director of The Fairchild Corporation.

The Board of Directors has determined that all of the nominees standing for
election at the 2004 annual meeting, other than Ronald P. Chrzanowski and Robert
H. Eder, are independent of the Company in that such nominees have no material
relationship with the Company either directly, or as a partner, shareholder or
affiliate of an organization that has a relationship with the Company. The board
has made this determination based on the following:

- Other than Messrs. Eder and Chrzanowski, no nominee for director is
an officer or employee of the Company or its subsidiaries or
affiliates;

- No nominee for director has an immediate family member who is an
officer of the Company or its subsidiaries or has any current or
past material relationship with the Company;

- No nominee for director, other than Messrs. Eder and Chrzanowski,
has worked for, consulted with, been retained by, or received
anything of substantial value from the Company aside from his
compensation as a director;

- No nominee for director is, or was within the past three years,
employed by the independent auditors for the Company;

- No executive officer of the Company serves on the compensation
committee or the Board of Directors of any corporation that employs
a nominee for director or a member of the immediate family of any
nominee for director;

- No nominee for director is an executive officer of any entity which
the Company's annual sales to or purchases from exceeded one percent
of either entity's annual revenues for the last fiscal year; and

- No nominee for director serves as a director, trustee, executive
officer or similar position of a charitable or non-profit
organization to which the Company or its subsidiaries made
charitable contributions or payments in fiscal year 2003 in excess
of five percent of the organization's consolidated gross revenues,
or $200,000, whichever is more, at any time during the past three
years.

Communications with the Board of Directors

The Board of Directors has established a process for shareholders to communicate
with members of the board. If you have any concern, question or complaint
regarding our compliance with any policy or law, or would otherwise like to
contact the Board of Directors, you may reach the Company's Board of Directors
by writing directly to those individuals c/o Capital Properties, Inc., 100
Dexter Road, East Providence, Rhode Island 02914.

All inquiries received shall not be screened by the Company and will be
forwarded directly to the director to which such inquiry is addressed, unless it
is believed that a particular inquiry may pose a security risk. The Board of
Directors sits as a committee of the whole to address any inquiries made by
shareholders.

Committees of the Board of Directors

The Board of Directors has an Audit Committee and a Compensation Committee, both
currently comprised of Messrs. Harris, Rosen 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 Company does not maintain a nominating committee or a committee performing a
similar function and is not required to under SEC or American Stock Exchange
rules. The Board of Directors sits as a committee of the whole to consider any
recommendations made by shareholders and/or other directors of persons to be
directors of the Company. In determining whether to nominate any such person for
election by the shareholders, the Board of Directors considers the experience of
such person as it relates to the business of the Company, together with such
person's age, reputation and ability to carry out the requirements to serve as a
director of the Company.

During the fiscal year ended December 31, 2003, the Board of Directors held four
meetings, the Audit Committee held five meetings and the Compensation Committee
held two meetings.

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 Committee and Compensation Committee
received $250 for each attended meeting of that committee.

Corporate Governance

The Board of Directors is committed to ethical business practices and believes
that strong corporate governance is important to ensure that the Company is
managed for the long-term benefit of its shareholders. The Company regularly
monitors developments in the area of corporate governance and has implemented a
number of best practices, including the following:

Code of Ethics. The Company has adopted a Code of Ethics applicable to all
directors, officers and employees, which meets the requirements of a "code of
ethics" as defined in Item 406 of Regulation S-K.

Procedures for the Receipt, Retention and Handling of Complaints. The Company
maintains procedures for the confidential, anonymous submission by employees of
any complaints or concerns about the Company, including complaints regarding
accounting, internal accounting controls or auditing matters.

EXECUTIVE COMPENSATION

The following table summarizes the compensation paid or accrued by the Company
during the three-year period ended December 31, 2003, to each of its executive
officers who earned more than $100,000 in salary and bonus in 2003, for services
rendered in all capacities to the Company during 2003.

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION

Name and Principal Salary and All Other
Position Year Bonus Compensation(1)
---------------------------- ---- ---------- ---------------

Robert H. Eder, Chairman 2003 $171,055 $ --
2002 167,488 --
2001 164,789 --

Ronald P. Chrzanowski, 2003 165,537 12,415
President 2002 162,084 12,156
2001 159,473 11,960

Barbara J. Dreyer, Treasurer 2003 171,159(2) 12,837
2002 128,587 9,644
2001 126,515 9,489

(1) Amounts paid directly to the retirement accounts of employees under the
Company's simplified employee pension plan.

(2) Includes a one-time bonus of $39,833.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

On March 1, 2004, 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, $.01 par value, except as follows:

Class A Class B
----------------------- ----------------------
Number of Percent Number of Percent
Name and Address shares held of Class shares held of Class
---------------- ----------- -------- ----------- --------

Robert H. Eder and Linda Eder 1,569,738(1) 52.3% 156,972(1) 52.3%
2441 S.E. Bahia Way
Stuart, Florida 34996

Lance S. Gad 173,680 5.8% 17,368 5.8%
1250 Fence Row Drive
Fairfield, Connecticut 06430

The following table reflects as of March 1, 2004, the beneficial ownership of
shares of Class A Common Stock and Class B Common Stock of the Company by
directors, nominees for director and officers of the Company, all shares being
owned directly except as otherwise noted:

Class A Class B
----------------------- ----------------------
Name of Individual or Number of Percent Number of Percent
Identification of Group shares held of Class shares held of Class
----------------------- ----------- -------- ----------- --------

Ronald P. Chrzanowski ............. 3,425 * 300 *
Barbara J. Dreyer ................. 6,000 * 600 *
Robert H. Eder .................... 1,569,738(2) 52.3% 156,972(3) 52.3%
Harold J. Harris .................. 16,000(4) * 1,100(5) *
Harris N. Rosen ................... 3,000 * 60 *
Henry S. Woodbridge, Jr ........... 5,800 * 600 *
All seven directors and officers
as a group ................... 1,604,063 53.2% 159,642 53.2%

* Less than 1%

(1) Robert H. Eder and Linda Eder are husband and wife, and each holds 784,869
shares of Class A Common Stock directly and 78,486 shares of Class B
Common Stock directly.

(2) Includes 784,869 shares Class A Common Stock held by his wife, Linda Eder.

(3) Includes 78,486 shares Class B Common Stock held by his wife, Linda Eder.

(4) Includes 1,000 shares Class A Common Stock held by his wife in her name.

(5) Includes 100 shares Class B Common Stock held by his wife in her name.

AUDIT COMMITTEE REPORT

The Audit Committee is composed of three directors, all of whom are independent
as defined by the American Stock Exchange listing standards. The Board of
Directors has determined that Henry S. Woodbridge, Jr. is a financial expert as
defined in the Sarbanes-Oxley Act of 2002 and the rules and regulations of the
Securities and Exchange Commission. The Audit Committee operates under a written
charter first adopted and approved by the Board of Directors on July 25, 1995. A
copy of the Audit Committee Charter, as amended on January 27, 2004, is attached
to the Proxy Statement as Appendix A.

Management is responsible for the Company's internal controls and financial
reporting process. The independent auditors are responsible for performing an
audit of the Company's consolidated financial statements in accordance with
generally accepted auditing standards and to issue a report thereon. The Audit
Committee's responsibility is to monitor and oversee these processes.

The Audit Committee has sole authority to select, evaluate and when appropriate,
to replace the Company's independent auditors. Additionally, and as appropriate,
the Audit Committee reviews and evaluates, and discusses and consults with the
Company's management and independent auditors regarding the scope of the audit
plan, the results of the audit, the Company's financial statement disclosure
documents, the adequacy and effectiveness of the Company's accounting and
financial controls and changes in accounting principles.

In connection with these responsibilities, the Audit Committee reviewed and
discussed the audited consolidated financial statements with management and the
Company's independent auditors, Lefkowitz, Garfinkel, Champi & DeRienzo P.C. The
Audit Committee also discussed with such firm the matters required by Statement
on Auditing Standards No. 61. The Audit Committee received from Lefkowitz,
Garfinkel, Champi & DeRienzo P.C. written disclosures and the letter regarding
its independence as required by Independence Standards Board Standard No. 1. The
Audit Committee discussed this information with Lefkowitz, Garfinkel, Champi &
DeRienzo P.C. and also considered the compatibility of non-audit services
provided by such firm with its independence. Based on the review of the audited
consolidated financial statements and these various discussions, the Audit
Committee recommended to the Board of Directors that the audited consolidated
financial statements be included in the Company's Annual Report on Form 10-KSB,
to be filed with the SEC.

Audit Committee: Henry S. Woodbridge, Jr., Chairman, Harold J. Harris and Harris
N. Rosen.

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 2003, be appointed as independent auditors of the
accounts of the Company for the year 2004 subject to ratification by the
shareholders. 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 and will be provided the opportunity
to make a statement if he so desires and that such representative will be
available to respond to appropriate questions.

Audit and Non-Audit Fees

The aggregate fees for professional services rendered for the Company by
Lefkowitz, Garfinkel, Champi & DeRienzo P.C. for fiscal years ended December 31,
2003 and December 31, 2002 are set forth below.

2003 2002
-------- --------

Audit fees ............ $ 77,000 $ 77,000
Audit-related fees .... -- --
Tax fees .............. 35,000 21,000
All other fees ........ -- --
-------- --------
Total ................. $112,000 $ 98,000
======== ========

Audit Fees for fiscal years ended December 31, 2003 and December 31, 2002 were
for professional services rendered for the audits of the Company's annual
financial statements and the reviews of interim financial statements included in
the Company's Quarterly Reports on Form 10-QSB, consents and other assistance
required to complete the year end audit of the Company's financial statements.

Audit-Related Fees for the fiscal years ended December 31, 2003 and December 31,
2002: there were no audit-related fees.

Tax Fees for the fiscal years ended December 31, 2003 and December 31, 2002 were
for services related to tax return preparation and tax planning.

All Other Fees for the fiscal years ended December 31, 2003 and December 31,
2002: there were no other fees.

None of the services described above was approved by the Audit Committee under
the de minimus exception provided by Rule 2-01(c)(7)(i)(c) under Regulation S-X.

The Audit Committee pre-approves all audit and non-audit services provided by
the independent auditors prior to the engagement of the independent auditors
with respect to such services.

The Audit Committee has determined that the provision of such services is
compatible with maintaining Lefkowitz, Garfinkel, Champi & DeRienzo P.C.'s
independence.

The Audit Committee recommends the shareholders vote "FOR" such ratification.

FINANCIAL STATEMENTS

A copy of the Company's annual report to the Securities and Exchange Commission
on Form 10-KSB for the year ended December 31, 2003 is enclosed. Such report is
not part of this proxy statement.

PROPOSALS FOR 2004 ANNUAL MEETING

The 2005 annual meeting of the shareholders of the Company is scheduled to be
held April 25, 2005. 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 30, 2004.

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 10, 2004

APPENDIX A

CAPITAL PROPERTIES, INC.
CHARTER OF AUDIT COMMITTEE

1. ORGANIZATION

The Audit Committee (the "Committee") of Capital Properties, Inc. (the
"Company") shall be appointed by the Board of Directors (the "Board") of
the Company. The Committee shall be composed of at least three directors
each of whom satisfies the independence standards specified in Rule 121A
of the Amex Company Guide and Rule 10A-3 of the Securities Exchange Act of
1934 and all other legal requirements. Each member shall be free of any
relationship which, in the opinion of the Board, would interfere with
their exercise of independent judgment as members of the Committee.

All members of the Committee shall have a working familiarity with basic
finance and accounting practices and be able to read and understand
fundamental financial statements. At least one member shall have an
accounting or related financial management expertise, such that he or she
is financially sophisticated within the meaning of Rule 121B(2) of the
Amex Company Guide.

Determination of independence, audit committee financial expertise,
financial literacy and accounting or related financial management
expertise shall be made by the Board as the Board interprets such
qualifications in its business judgment and in accordance with applicable
law and the listing requirements of the Amex.

The Committee shall have the power to adopt its own operating rules and
procedures and to call upon assistance from officers and employees of the
Company and outside counsel and consultants without the consent of
management.

2. STATEMENT OF POLICY

The Committee shall provide assistance to the directors of the company in
fulfilling their responsibilities to the shareholders and investment
community relating to corporate accounting, reporting practices of the
Company and the quality and integrity of the financial reports of the
Company. In so doing, the Committee shall maintain free and open means of
communication between the directors, the Company's independent auditor,
and the financial management of the Company.

The Committee, and each member of the Committee in his or her capacity as
such, shall be entitled to rely, in good faith, on information, opinions,
reports or statements, or other information prepared or presented to them
by officers and employees of the Company, whom such member believes to be
reliable and competent in the matters presented and on counsel, public
accountants or other persons as to matters which the member believes to be
within the professional competence of such person.

3. RESPONSIBILITIES

The Committee shall have responsibility 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 Committee
shall report on its actions to the full Board at each regular quarterly
meeting and at the annual meeting of the Board.

In carrying out the foregoing responsibilities, the Committee shall:

(a) Be directly responsible for the appointment, compensation,
retention and oversight of any independent auditor engaged for
the purpose of preparing or issuing an audit report or
performing other audit, review or attest services. The
accounting firm shall report directly to the Committee.

(b) Approve on an annual basis the estimated fees to be paid to
the independent auditor for the annual audit of the
consolidated financial statements of the Company and limited
reviews of its quarterly financial statements and in this
connection, review the independent auditor's engagement letter
and discuss the general audit approach.

(c) Pre-approve audit and non-audit services performed on behalf
of the Company by the independent auditor that are not
prohibited by law or regulation pursuant to such processes as
the Committee determines to be advisable. The Committee may
delegate pre-approval authority for any permissible non-audit
service to one or more members of the Committee, provided that
any pre-approval granted by such member or members pursuant to
such delegated authority is presented to the Committee at its
next scheduled meeting.

(d) Review any non-audit services performed on behalf of the
Company by the independent auditor that meet the de minimis
exception under applicable law and regulations.

(e) Meet with the independent auditor and the financial management
of the Company to review the scope of the proposed audit for
the current year and the audit procedures to be utilized, and
at the conclusion thereof review such audit, including any
comments or recommendations of the independent auditor.

(f) Review with the independent auditor and the Company's
financial and accounting personnel, the adequacy and
effectiveness of the internal accounting and financial
controls of the Company, and solicit from the independent
auditor any recommendations for the improvement of such
internal control procedures. Particular emphasis shall be
given to the adequacy of such internal controls to expose any
payments, transactions, or procedures that might be deemed
illegal or otherwise improper.

(g) Review the internal audit functions of the Company, the
proposed audit plans for the current year and the coordination
of such plans with the independent auditor.

(h) Review annually with management and the independent auditor
the basis for the disclosures made in the annual report to
shareholders regarding the Company's internal controls for
financial reporting.

(i) Review any deficiencies identified by management in the design
and operation of internal control for financial reporting and
at least annually consider, in consultation with management
and the independent auditor, the adequacy of the Company's
internal control for financial reporting, including the
resolution of identified material weaknesses and reportable
conditions, if any.

(j) Review with management and the independent auditor the
financial statements proposed to be contained in the annual
report to shareholders to determine that the independent
auditor is satisfied with the disclosure and content of such
financial statements, and review and discuss:

- Changes in accounting standards or rules promulgated by
the Financial Accounting Standards Board or the SEC that
have an impact on the financial statements;

- Estimates made by management having a material impact on
the financial statements;

- Analyses of the effect of alternative assumptions,
estimates or GAAP methods on the Company's financial
statements;

- Any changes from prior years in accounting principles
applied in the preparation of such financial statements;
and

- Any material written communications between the
independent auditor and the Company's management,
including any management letter provided by the
independent auditor and the Company's response to that
letter.

(k) Ensure that retention of the independent auditor to perform
audit and nonaudit services is properly disclosed in the
Company's proxy statement and filings with the SEC.

(l) Review, at least annually, with management and with the
independent auditor, the qualifications, performance and
independence and objectivity of the independent auditor. In
connection with such review and evaluation, the Committee
should:

- Obtain and review a written report from the independent
auditor at least annually regarding the independent
auditor's internal quality-control procedures and any
material issues raised by the most recent
quality-control review;

- Obtain an annual written statement from the independent
auditor delineating all relationships, both direct and
indirect, between the independent auditor and the
Company, including each non-audit service

provided to the Company and at least the matters set
forth in Independence Standards Board No. 1;

- Consider whether the provision of non-audit services is
compatible with maintaining the independent auditor's
independence, taking into account the opinions of
management;

- Discuss any relationships that may impair the
independent auditor's independence and take such actions
as it deems appropriate or make recommendations to the
Board regarding actions to be taken to remedy such
impairment; and

- Ensure appropriate audit and concurring partner rotation
as required by law.

(m) Provide sufficient opportunity for the independent auditor to
meet with the members of the Committee without members of
management present. Among the items to be discussed at such
meetings are the independent auditor's evaluation of the
Company's financial and accounting personnel and the
cooperation received by the independent auditor during the
course of the audit.

(n) Establish procedures for the receipt, retention and anonymous
treatment of complaints relating to internal accounting
controls or auditing matters. The Committee shall be
responsible for designating the individual(s) responsible for
receiving such complaints.

(o) Review and approve any related party transactions entered into
by the Company.

(p) Administer the Company's Code of Ethics for Chief Executive
Officer and Senior Financial Officers, including consideration
of any waivers and investigation of any alleged violations
thereof.

(q) Investigate any matter brought to the Committee's attention
within the scope of its responsibilities, with the power to
retain outside legal, accounting or other advisors and
determine funding for this purpose if, in its judgment, such
retention is appropriate.

(r) Meet on at least a quarterly basis, cause minutes of all
meetings of the Committee to be kept and submit the minutes of
each Committee meeting to the Board.

(s) Take such other actions as it deems necessary or appropriate
from time to time.

(t) Review and assess this Charter at least annually and amend it
as appropriate.

Adopted: January 27, 2004

CAPITAL PROPERTIES, INC.
CLASS A COMMON STOCK PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned, a shareholder of Capital Properties, Inc., a Rhode Island
corporation, hereby appoints ROBERT H. EDER and STEPHEN J. CARLOTTI, or either
of them, the proxies of the undersigned, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote for the
undersigned all the Capital Properties, Inc. Class A Common Shares held of
record on March 1, 2004 by the undersigned at the Annual Meeting of Shareholders
to be held on April 27, 2004 or any adjournment thereof as follows on the
reverse side of this proxy card:

--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND
"FOR" PROPOSAL 2.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE |X|
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1. ELECTION OF DIRECTORS:

INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you
wish to withhold, as shown here: |X|

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FOR AGAINST ABSTAIN

2. RATIFICATION of the appointment of Lefkowitz, | | | | | |
Garfinkel, Champi & DeRienzo P.C. as the
Company's independent accountants for the current
fiscal year.

3. In their discretion, the Proxies are authorized
to vote upon such other business as may properly
come before the Meeting.

THE PROXY REPRESENTED BY THIS PROXY CARD, WHEN PROPERLY EXECUTED WILL BE VOTED
IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES LISTED AND FOR EACH OF
THE PROPOSALS.

IF BOTH THE PROXIES SHALL BE PRESENT IN PERSON OR BY SUBSTITUTE, EITHER OF THE
PROXIES SO PRESENT AND VOTING SHALL HAVE AND MAY EXERCISE ALL THE POWERS HEREBY
GRANTED.

Please check here if you plan to attend the meeting | |.

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To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that changes
to the registered name(s) on the account may not be submitted via this method.
| |
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Signature of Shareholder____________________________Signature of
shareholder____________________________________
Date:_______________ Date:_______________

NOTE: This proxy must be signed exactly as the name appears hereon. When
shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give
full title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as
such. If signer is a partnership, please sign in partnership name by
authorized person.

CAPITAL PROPERTIES, INC.
CLASS B COMMON STOCK PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned, a shareholder of Capital Properties, Inc., a Rhode Island
corporation, hereby appoints ROBERT H. EDER and STEPHEN J. CARLOTTI, or either
of them, the proxies of the undersigned, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote for the
undersigned all the Capital Properties, Inc. Class B Common Shares held of
record on March 1, 2004 by the undersigned at the Annual Meeting of Shareholders
to be held on April 27, 2004 or any adjournment thereof as follows on the
reverse side of this proxy card:

1. ELECTION OF DIRECTORS:

INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you
wish to withhold, as shown here: |X|

--------------------------------------------------------------------------------

FOR AGAINST ABSTAIN

2. RATIFICATION of the appointment of Lefkowitz, | | | | | |
Garfinkel, Champi & DeRienzo P.C. as the
Company's independent accountants for the current
fiscal year.

3. In their discretion, the Proxies are authorized
to vote upon such other business as may properly
come before the Meeting.

IF BOTH THE PROXIES SHALL BE PRESENT IN PERSON OR BY SUBSTITUTE, EITHER OF THE
PROXIES SO PRESENT AND VOTING SHALL HAVE AND MAY EXERCISE ALL THE POWERS HEREBY
GRANTED.

Please check here if you plan to attend the meeting | |.

Signature of Shareholder____________________________Signature of
shareholder____________________________________
Date:_______________ Date:_______________