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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995 Commission file number 0-18261
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Tower Properties Company
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Missouri 43-1529759
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STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION IDENTIFICATION NO.)
911 Main Street, Kansas City, Missouri 64105
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code (816) 421-8255
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Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
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Securities registered pursuant to Section 12(g) of the Act:
$1 Par Value Common Stock
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(TITLE OF CLASS)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR SUCH FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO
SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO ---
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INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM
405 OF REGULATION S-K (SECTION 229.405 OF THIS CHAPTER) IS NOT CONTAINED
HEREIN, AND WILL NOT BE CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN
DEFINITIVE PROXY OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN
PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS FORM 10-K.
STATE THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NONAFFILIATES OF
THE REGISTRANT. (THE AGGREGATE MARKET VALUE SHALL BE COMPUTED BY REFERENCE
TO THE PRICE AT WHICH THE STOCK WAS SOLD, OR THE AVERAGE BID AND ASKED PRICES
OF SUCH STOCK, AS OF A SPECIFIED DATE WITHIN 60 DAYS PRIOR TO THE DATE OF
FILING.)
$12,826,050 at February 22, 1996
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INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES
OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE (APPLICABLE ONLY TO
CORPORATE REGISTRANTS).
$1 Par Value Common Stock -- 171,014 Shares
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DOCUMENTS INCORPORATED BY REFERENCE: LIST THE FOLLOWING DOCUMENTS IF
INCORPORATED BY REFERENCE AND THE PART OF THE FORM 10-K INTO WHICH THE
DOCUMENT IS INCORPORATED: (1) ANY ANNUAL REPORT TO SECURITY HOLDERS; (2) ANY
PROXY OR INFORMATION STATEMENT; AND (3) ANY PROSPECTUS FILED PURSUANT TO
RULE 424(b) OR (c) UNDER THE SECURITIES ACT OF 1933. (THE LISTED DOCUMENTS
SHOULD BE CLEARLY DESCRIBED FOR IDENTIFICATION PURPOSES.)
Portions of Annual Report to Stockholders for the year ended Dec. 31, 1995,
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are incorporated by reference in Parts I, II and IV. Portions of the Annual
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Proxy Statement are incorporated by reference into Part III.
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
TOWER PROPERTIES COMPANY
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
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CROSS-REFERENCE SHEET
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Part II
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Item 6 - Selected Financial Data 1995 Annual Report to Stockholders,
Page 21.
Item 7 - Management's Discussion and 1995 Annual Report to Stockholders,
Analysis of Financial Condition Pages 17 through 20.
and Results of Operations
Item 8 - Financial Statements and 1995 Annual Report to Stockholders,
Supplementary Data Pages 4 through 16 and Pages 22 and 23.
Part III
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Item 10 - Directors and Executive Proxy Statement relating to Annual
Officers of the Registrant Meeting of Stockholders to be held on
April 10, 1996, under the caption
"Election of Directors."
Item 11 - Executive Compensation Proxy Statement relating to Annual
Meeting of Stockholders to be held on
April 10, 1996, under the captions
"Summary Compensation Table" and
"Compensation Plans."
Item 12 - Security Ownership of Certain Proxy Statement relating to Annual
Beneficial Owners and Meeting of Stockholders to be held on
Management April 10, 1996, under the caption
"Security Ownership of Certain
Beneficial Owners and Management."
Item 13 - Certain Relationships and Proxy Statement relating to Annual
Related Transactions Meeting of Stockholders to be held on
April 10, 1996, under the caption
"Transactions."
Part IV
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Item 14(a)(1) - Financial Statements 1995 Annual Report to Stockholders,
Pages 4 through 16.
Item 14(a)(2) - Exhibits Registrant's 1996 Form 10-K (File
No. 0-18261) filed on March 31, 1996.
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Part I
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Item 1. Business.
(a) General Development of Business:
In September 1989, Tower Properties Company (Tower) formed Tower
Acquisition Corp. (TAC), a wholly-owned subsidiary of Tower. TAC
was formed pursuant to the terms of a merger between Tower and
Commerce Bancshares, Inc. (Commerce), a bank holding company.
Tower spun off certain assets and liabilities to TAC with a net
book value of approximately $17,500,000. Tower then merged with
Commerce on January 29, 1990. In connection with the merger each
Tower shareholder received 7.88 shares of Commerce in exchange for
each Tower share. TAC's capital stock was distributed to Tower's
shareholders on January 29, 1990 in the form of a stock dividend.
TAC's name was changed to Tower Properties Company (the Company) on
this same date. The net assets distributed to TAC represent the
assets currently owned and managed by the Company.
A private letter ruling was obtained from the IRS that the
distribution was tax-free under Section 355 of the Internal Revenue
Code and the merger constituted a tax-free reorganization under
Section 368(a)(1)(A) of the Internal Revenue Code.
The Company is primarily engaged in owning, developing, leasing and
managing real property located in Johnson County, Kansas, and Clay
and Jackson County, Missouri.
(b) Financial Information About Industry Segments:
Registrant considers its business to be concentrated in one industry
segment--real estate ownership, development, leasing and management.
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(c) Narrative Description of Business:
Registrant is primarily engaged in the business of owning, developing,
leasing and managing real property. Registrant owns and manages
945,000 rentable square feet of office space located in the Kansas
City metropolitan area.
Substantially all the improved real estate owned by Registrant
consists of office buildings and a warehouse/office facility held
for lease, automobile parking garages, apartments and land held for
future sale. Registrant has not pursued a policy of acquiring real
estate on a speculative basis, although some real estate owned by
Registrant may be sold at a future time.
Registrant leasing operations provided rental income constituting
approximately 94 percent of the 1995 revenues. Registrant competes
with other building owners in the renting and leasing of office
building space. Registrant employs approximately 43 persons on a
full-time basis and approximately 3 persons on a part-time basis.
The remaining 6 percent of 1995 revenues include management and
service fees (4 percent) and other income (2 percent).
Registrant leases rental space and provides services to Commerce
Bancshares, Inc. The annual aggregate rental and service fees paid
to Registrant by Commerce will vary depending upon the space
occupied and services provided. For the years ended December 31,
1995, 1994 and 1993, Registrant received rent and fees of
$1,000,900, $1,012,620 and $753,272, respectively, from Commerce.
Item 2. Properties.
(a) The following real property is owned, in fee, by Registrant:
(1) The Commerce Tower, a 30-story office building located at
911 Main Street, Kansas City, Missouri, was opened for
occupancy in January 1965. The Commerce Tower has net
rentable space of approximately 425,000 square feet and is
presently 92 percent occupied. The building, of modern
architectural design, has six elevators serving the first 17
floors and an additional six express elevators serving the
17th through the 30th floors. Registrant considers the
Commerce Tower to be in good condition.
(2) The Barkley Place, a 6-story 95,000 rentable square foot
office building located in Overland Park, Kansas. The
building was completed in 1988. The Company purchased the
building on July 15, 1994. Registrant considers the building
to be in excellent condition. The building is 86
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percent occupied. The building is subject to a mortgage deed
of trust securing a loan with a balance owing of $3,906,718.
(3) 6601 College Boulevard, a 6-story 101,200 rentable square foot
building, located in Overland Park, Kansas. The building was
completed in 1979. The Company purchased the building on
December 15, 1995. Registrant considers the building to be
in excellent condition. The building is 100 percent leased
under a triple net lease.
(4) A warehouse/office facility, located at 9200 Cody, Overland
Park, Kansas. The building contains approximately 19,100
square feet of office space and 74,800 square feet of
warehouse space. The building was constructed in 1973, with
an addition in 1976. The Company purchased the facility on
June 30, 1995. Registrant considers this facility to be in
excellent condition. The building is 100 percent leased under
a triple net lease. The warehouse/office facility is subject
to a mortgage deed of trust securing a loan with a balance
owing of $1,946,689.
(5) A two-story office building, located at 908 Walnut Street,
Kansas City, Missouri, is immediately adjacent to the
Commerce Tower and contains approximately 7,500 square feet
of net rentable space. This building is approximately 60
years old, and is unoccupied. The Company plans to demolish
the building in the near future to accommodate a proposed 300
car garage on the Northwest corner of 9th and Walnut.
(6) A 19-building, 210-unit apartment complex, on a 17.4-acre
tract, located at New Mark Drive and North Cherry in Kansas
City North. Construction of the first phase was completed in
mid-1971 and completion of the second phase in 1978. The
apartments are 97 percent occupied. Registrant considers the
complex to be in good condition. The apartments are subject
to a mortgage deed of trust securing a loan with a balance
owing of $2,412,052.
(7) A 17-building, 261-unit apartment complex, on a 25-acre tract,
located at 5401 Fox Ridge Drive in Mission, Kansas.
Construction of the complex was completed in 1985. The
Company purchased the complex on December 31, 1992. The
Company has acquired a 5.3-acre adjacent tract of land and
is presently constructing an additional 68 units. Registrant
considers the 17-building complex to be in excellent
condition. The apartments are 94 percent occupied. The
apartments are subject to a mortgage deed of trust securing a
loan with a balance owing of $7,213,504.
(8) A 7-building, 162-unit apartment complex, on an 8.7-acre tract
located at 6800 Antioch in Merriam, Kansas. Construction of
the complex was
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completed in 1987. The Company purchased the complex on
September 30, 1993. Registrant considers the 7-building
complex to be in excellent condition. The apartments are 95
percent occupied. The apartments are subject to a mortgage
deed of trust securing a loan with a balance owing of
$3,821,909.
(9) One block of surface parking bounded generally by Sixth Street,
Baltimore Street, Seventh Street and Wyandotte Street. This
parking location contains approximately 206 parking stalls.
(10) A block of surface parking located generally at the corner of
Eighth and Wyandotte Streets in Kansas City, Missouri, that
contains approximately 200 parking stalls.
(11) A tract of land located at the southwest corner of Ninth and
Walnut. This tract contains approximately 12,000 square feet
of land.
(12) A two-story facility located at the Northwest corner of Ninth
and Walnut, immediately adjacent to the 811 Main building and
garage (except that a portion of the parking facility is
leased under a long-term lease). The parking facility
contains approximately 80 parking spaces.
(b) New Mark, a division of Registrant, originally owned 1,207 acres
located in Kansas City North immediately adjacent to and contiguous
with the apartment complex owned by Registrant. The tract is owned
in fee. Residential lots and land aggregating approximately 600
acres have been sold from the tract by the Company. An additional
116 acres have been dedicated to streets, and 103 acres are
designated as an open greenbelt area.
(c) Downtown Redevelopment Corporation, an urban redevelopment
corporation under the laws of the state of Missouri, of which
Registrant owns approximately 98 percent of the outstanding capital
stock, owns the following property located in downtown Kansas City,
Missouri:
(1) The 811 Main building, which consists of an L-shaped, 12-story
combination office building and parking garage, was completed
in 1959. The first five floors are utilized primarily for
parking, although approximately 27,000 square feet of ground
floor and lower level space is available for use as
commercial office space. The office space extending from the
6th floor through the 12th floor encloses a gross area of
approximately 252,000 square feet. Registrant leased the
total office space to Kemper Financial Companies, Inc.,
effective May 15, 1989. Kemper Financial is now eligible
under the terms of their lease with the Company to terminate
the lease with 180 days notice. The condition of the
property is considered good.
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(2) 710 Main Garage Building, an L-shaped, multi-deck, self-parking
garage facility, contains approximately 737 parking
spaces.The original portion was completed in 1959, with
additions made in 1962.The condition of the property is
considered good.
(3) A tract of ground approximately one-half block in width on
the east side of Main Street between 6th and 8th Streets.
The Company successfully pursued quiet title actions against
the leaseholder, and as a result, now holds clear title to
the leasehold improvements on this tract, Prom/Rodeway
Inn and 711 Main Garage. These structures are functionally
obsolete. The Company has remediated environmental problems
in the buildings and plants to demolish them except for the
280 car parking garage at 711 Main.
(4) An irregular tract of ground containing approximately 35,000
square feet, is leased in part to a service station.
Approximately 21,000 square feet is used for surface parking.
This tract is owned in fee.
Item 3. Legal Proceedings.
Neither Registrant nor any of its subsidiaries are involved in any material
pending litigation other than ordinary routine proceedings incidental to
their business.
Item 4. Submission of Matters to a Vote of Security Holders.
Registrant did not submit any matters to a vote of security holders during
the fourth quarter of 1995.
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Part II
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Item 5. Market for Registrant's Common Stock and Related Security Holder
Matters.
Registrant's stock is traded in the "over-the-counter" market and trading of
such stock is limited. The schedule below depicts the bid and asked prices,
as provided by an investment banking firm, in each quarter of 1995. The
"over-the-counter" market quotations shown below reflect interdealer prices
without retail markup, markdown or commissions and may not necessarily
represent actual transactions.
1995 1994
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Quarter Bid Asked Bid Asked
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First $65 $ - $65 $ -
Second 65 - 65 -
Third 65 - 65 -
Fourth 75 - 65 -
There are no present or future restrictions on the ability of Registrant to
pay common stock dividends. No dividends were paid in 1995, 1994 and 1993.
(Management has indicated it will not pay dividends in 1996.)
The table below shows the number of holders of record of each class of
equity securities of Registrant as of February 22, 1996:
Number of
Title of Class Security Holders
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Common stock,
$1.00 par value 571
Item 6. Selected Financial Data.
Reference is made to the caption "Selected Financial Data" on Page 21 of
Registrant's 1995 Annual Report to Stockholders for a summary of certain
financial data for the Registrant for each of its last five fiscal years.
Pursuant to General Instruction G(2) to Form 10-K and Securities Exchange
Act Rule 12b-23, the information set forth therein is incorporated herein by
reference.
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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Reference is made to the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations" set forth on Pages 17 through
20 of Registrant's 1995 Annual Report to Stockholders which, pursuant to
General Instruction G(2) to Form 10-K and Securities Exchange Act
Rule 12b-23, is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
Reference is made to Pages 4 through 16 and Pages 22 and 23 of Registrant's
1995 Annual Report to Stockholders which, pursuant to General Instruction
G(2) to Form 10-K and Securities Exchange Act Rule 12b-23, is incorporated
herein by reference.
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosures.
None.
Part III
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Item 10. Directors and Executive Officers of the Registrant.
Reference is made to the caption "Election of Directors" in Registrant's
Proxy Statement relating to Annual Meeting of Stockholders to be held April
10, 1996. Pursuant to General Instruction G(2) to Form 10-K and Securities
Exchange Act Rule 12b-23, information therein relating to the names, ages,
positions, terms of office, family relationships and business experience of
Registrant's directors is incorporated herein by reference.
Item 11. Executive Compensation.
Reference is made to the captions "Summary Compensation Table" and
"Compensation Plans" in Registrant's Proxy Statement relating to Annual
Meeting of Stockholders to be held April 10, 1996. Pursuant to General
Instruction G(2) to Form 10-K and Securities Exchange Act Rule 12b-23,
information therein is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Reference is made to the caption "Security Ownership of Certain Beneficial
Owners and Management" in Registrant's Proxy Statement relating to Annual
Meeting of Stockholders to be held April 10, 1996. Pursuant to General
Instruction G(2) to
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Form 10-K and Securities Exchange Act Rule 12b-23, the
information therein is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions.
Reference is made to the caption "Transactions" in Registrant's Proxy
Statement relating to Annual Meeting of Stockholders to be held April 10,
1996. Pursuant to General Instruction G(2) to Form 10-K and Securities
Exchange Act Rule 12b-23, the information therein is incorporated herein by
reference.
Part IV
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Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) (1) Financial Statements. The following consolidated financial
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statements of the Registrant and its subsidiaries, together with
the report of independent public accountants, contained in the
Registrant's 1995 Annual Report to Stockholders are hereby
incorporated herein:
Report of Independent Public Accountants
Consolidated Balance Sheets - December 31, 1995 and 1994
Consolidated Statements of Income for the Years Ended December
31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1995, 1994 and 1993
Consolidated Statements of Stockholders' Investment for the
Years Ended December 31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
Schedule III
All other schedules have been omitted because the required
information is shown in the financial statements or notes
thereto, because the amounts involved are not significant or
because of the absence of the conditions under which they are
required.
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(2) Exhibits.
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Item No. Description Location
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3(a) Articles of Incorporation of Filed on March 30, 1990, as
Tower Acquisition Corp. Exhibit 3(a) to Registrant's 1989
Form 10-K (File No. 0-18261)
3(b) Bylaws of Tower Acquisition Filed on March 30, 1990, as
Corp. Exhibit 3(b) to Registrant's 1989
Form 10-K (File No. 0-18261)
3(c) Certificate of Amendment and Filed on March 30, 1990, as
Amendment of Articles of Exhibit 3(c) to Registrant's 1989
Incorporation Form 10-K (File No. 0-18261)
4(a) Conformed composite copy of Filed on March 30, 1990, as
Note Agreement and Deed of Exhibit 4(a) to Registrant's 1989
Trust dated September 21, 1972, Form 10-K (File No. 0-18261)
with respect to $8,000,000,
8 percent, due in monthly install-
ments to October 2007
10 Hillsborough Apartment Complex Filed on January 11, 1993, as
acquisition agreement Exhibit A to Registrant's Form 8-K
(File No. 0-18261)
Peppertree Apartment Complex Filed on October 12, 1993, as
acquisition agreement Exhibit A to Registrant's Form 8-K
(File No. 0-18261)
Barkley Place Office Building Filed on July 26, 1994, as
acquisition agreement Exhibit A to Registrant's Form 8-K
(File No. 0-18261)
6601 College Boulevard Office Filed on February 27, 1996, as
Building acquisition agreement Exhibit A to Registrant's Form 8-K
(File No. 0-18261)
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14(a) Tower Properties Company's Filed on March 08, 1996, as
annual report to its security Exhibit 14(a) to Registrant's 1995
holders for the 1995 fiscal year. Form 10-K (File No. 0-18261)
Such report is furnished for the
information of the Commission and
is not to be deemed as filed as a
part of this report.
25(a) A list of Tower Properties See attached Exhibit 25(a)
Company subsidiaries
(b) Reports on Form 8-K. Registrant filed a required report on Form 8-K
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during the last quarter of 1995.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
TOWER PROPERTIES COMPANY
(Registrant)
DATE: March 31, 1996 BY: /s/JAMES M. KEMPER, JR.
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James M. Kemper, Jr.
Chairman, President and
Chief Executive Officer
DATE: March 31, 1996 BY: /s/CHESTER A. WITTWER, JR.
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Chester A. Wittwer, Jr.
Vice President and Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of
Registrant and in the capacities and on the dates indicated.
DATE: March 31, 1996 BY: /s/NEIL T. DOUTHAT
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Neil T. Douthat
Director
DATE: March 31, 1996 BY: /s/BRIAN D. EVERIST
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Brian D. Everist
Director
DATE: March 31, 1996 BY: /s/JONATHAN M. KEMPER
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Jonathan M. Kemper
Director
DATE: March 31, 1996 BY: /s/BENJAMIN F. BRYAN
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Benjamin F. Bryan
Executive Vice President and Director
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