<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
INTERPOOL, INC.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
<PAGE>
LOGO INTERPOOL, INC.
211 College Road East
Princeton, New Jersey 08540
Telephone: (609) 452-8900
Internet Address: http://www.interpool.com
- --------------------------------------------------------------------------------
Listed: New York Stock Exchange Symbol: IPX
April 19, 1999
Dear Stockholders:
It is our pleasure to invite you to our sixth annual meeting of stockholders.
The meeting will be held on Wednesday, May 26, 1999 at 10:00 a.m. at the Union
League Club, 38 East 37th Street, New York, New York 10016. Please note that the
Union League Club requires women to wear dresses, skirts or pantsuits and
gentlemen to be appropriately attired with jackets and ties.
On the following pages you will find the formal notice of the annual meeting and
proxy materials. The vote of each stockholder is important. Please be sure to
mark, sign and return the enclosed proxy card so that your shares will be
represented. Even if you have executed a proxy, you may still attend the annual
meeting and vote your shares in person. In addition to casting your ballot for
the items to be voted upon, you will be afforded an opportunity to ask questions
and express your views on Company operations.
We appreciate the continuing interest and support of our stockholders and look
forward to seeing many of you at the annual meeting.
Sincerely,
- ------------------------------- ---------------------------------
Martin Tuchman Raoul J. Witteveen
Chairman of the Board President/Chief Financial Officer
Chief Executive Officer Chief Operating Officer
<PAGE>
INTERPOOL, INC.
211 College Road East
Princeton, New Jersey 08540
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 26, 1999
Princeton, New Jersey
April 19, 1999
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
INTERPOOL, INC. (the "Company") will be held at The Union League Club, 38 East
37th Street, New York, New York 10016 on Wednesday, May 26, 1999, at 10:00 a.m.,
Eastern Daylight Time, for the following purposes:
(1) to elect three (3) directors to serve as Class III directors for a term of
three years and until their successors shall have been elected and shall
have qualified; and
(2) to ratify the appointment of Arthur Andersen LLP as the Company's
independent accountants for the 1999 fiscal year; and
(3) to act upon such other matters as may properly come before the meeting or
any adjournments thereof.
All holders of common stock of record at the close of business on April
12, 1999 will be entitled to notice of and to vote at the Annual Meeting.
Whether or not you expect to attend the meeting, please date, sign and
promptly return the enclosed proxy in the prepaid return envelope provided. You
may revoke your proxy at any time before it is voted at the meeting by
submitting a written revocation or a new proxy, or by attending and voting at
the Annual Meeting.
By Order of the Board of Directors
- --------------------------------------
Martin Tuchman
Chairman/Chief Executive Officer
<PAGE>
INTERPOOL, INC.
211 College Road East
Princeton, New Jersey 08540
- --------------------------------------------------------------------------------
PROXY STATEMENT
- --------------------------------------------------------------------------------
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of Interpool, Inc. (the "Company") of proxies
for use at the Annual Meeting of Stockholders (the "Annual Meeting") of the
Company to be held on Wednesday, May 26, 1999 at 10:00 a.m., Eastern Daylight
Time, and at any adjournments thereof.
This Proxy Statement, Notice of Meeting, form of proxy and the Company's
Annual Report for 1998 are being mailed to each stockholder at such holder's
address of record on or about April 19, 1999.
GENERAL
Only stockholders of record at the close of business on April 12, 1999
are entitled to notice of and to vote the shares of common stock of the Company
(the "common stock") held by them on that date at the Annual Meeting or any
adjournments thereof.
If the accompanying proxy card is properly signed and returned to the
Company and not revoked, it will be voted in accordance with the instructions
contained therein. Unless contrary instructions are given, the persons
designated as proxy holders in the proxy card will vote for the three director
nominees proposed by the Board of Directors, for ratification of the appointment
of Arthur Andersen LLP as the Company's independent accountants for the fiscal
year ending December 31, 1999 and, with regard to all other matters that may
properly come before the meeting, as recommended by the Board of Directors; or,
if no such recommendation is given, in their own discretion. Each stockholder
may revoke a previously granted proxy at any time before it is exercised by
filing a revoking instrument or a duly executed proxy bearing a later date with
the Secretary of the Company. The powers of the proxy holders will be suspended
if the person executing the proxy attends the Annual Meeting in person and so
requests. Attendance at the Annual Meeting will not, in itself, constitute
revocation of a previously granted proxy.
The presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the shares of common stock outstanding on April 12,
1999 will constitute a quorum. Each outstanding share entitles its holder to
cast one vote on each matter to be voted upon at the Annual Meeting. As of April
12, 1999, 27,566,452 shares of common stock were outstanding.
The cost of soliciting proxies in the enclosed form will be borne by the
Company. It is expected that the solicitation will be primarily by mail.
Officers and regular employees of the Company may, but without compensation
other than their regular compensation, solicit proxies by further mailing or
personal conversations, telephone or facsimile. The Company will, upon request,
reimburse brokerage firms and others for their reasonable expenses in forwarding
solicitation material to the beneficial owners of stock.
-1-
<PAGE>
MANAGEMENT
Directors and Executive Officers
The following table sets forth certain information with respect to the
executive officers and directors of the Company:
<TABLE>
<CAPTION>
Name Age Positions and Offices
---- --- ---------------------
<S> <C> <C>
Martin Tuchman................................... 58 Chairman of the Board of Directors and
Chief Executive Officer
Raoul J. Witteveen............................... 43 President, Chief Operating Officer, Chief Financial Officer
and Director
Warren L. Serenbetz.............................. 75 Director
Arthur L. Burns.................................. 54 General Counsel, Secretary and Director
Ernst Baenziger.................................. 62 Senior Vice President and Director of Interpool Limited
Peter D. Halstead................................ 57 Director
Joseph J. Whalen................................. 67 Director
Mitchell I. Gordon............................... 41 Director
William Geoghan ................................. 48 Senior Vice President of Finance
</TABLE>
ITEM 1. ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three classes, as
nearly equal in number as possible. Each class serves three years, with the
terms of office of the respective classes expiring in successive years. The term
of office of directors in Class III expires at the 1999 Annual Meeting. The
Board of Directors proposes that the nominees described below be elected Class
III directors for a term of three years and until their successors are duly
elected and qualified. The Board of Directors has no reason to believe that the
nominees will not serve if elected, but if any or all of them should become
unavailable to serve as a director, and if the Board designates a substitute
nominee, the persons named as proxies will vote for the substitute nominee
designated by the Board.
Directors will be elected by a plurality of the votes cast at the Annual
Meeting. If elected, all nominees are expected to serve until the 2002 Annual
Meeting and until their successors are duly elected and qualified.
-2-
<PAGE>
CLASS III - DIRECTORS STANDING FOR ELECTION
MARTIN TUCHMAN
Martin Tuchman, Chairman of the Board of Directors and Chief Executive
Officer of the Company since February 1988, is also Chairman of the Board of
Directors, Chief Executive Officer and a director of Interpool Limited, which he
co-founded in 1968. He also has served as a director of Trac Lease since June
1987, President of Trac Lease for the period from June 1987 through January 1994
and currently serves as its Chairman and Chief Executive Officer. He is Chairman
of the Board of Directors of Princeton International Properties, Inc., a
family-owned real estate company, which owns and has interests in properties
located in Princeton, New Jersey. Mr. Tuchman was previously a member of the
Society of Automotive Engineers as well as the American National Standards
Institute. Currently, Mr. Tuchman is a member of the United Nations Business
Council, a Council comprised of leading international executives organized to
promote understanding and cooperation between business and government and a
member of the Board of Trustees of the New Jersey Institute of Technology. In
1995, Mr. Tuchman was honored as Entrepreneur Of The Year in an awards program
founded by Ernst & Young LLP and in 1996 was named Alumnus of the Year by the
New Jersey Institute of Technology. In 1997, Mr. Tuchman was appointed to serve
on the Board of Directors of Almedica International, Inc., a clinical trial
materials company which provides services to the pharmaceutical industry. Since
1997, Mr. Tuchman has also served on the Board of Governors of The National
Parkinson's Foundation. Mr. Tuchman holds a bachelor's degree in mechanical
engineering from the New Jersey Institute of Technology (Newark College of
Engineering) and a master's degree in business administration from Seton Hall
University.
ARTHUR L. BURNS
Arthur L. Burns has been General Counsel, Secretary and a director of
the Company since January 1990 and Secretary of Interpool Limited since 1986.
Mr. Burns was Senior Vice President of Law and Administration of Interpool
Limited from 1980 until June 1996. Prior to joining Interpool Limited, Mr. Burns
served as assistant general counsel to GATX Leasing Corp. between 1975 and 1980,
and as an associate attorney at the New York law firm of Cahill, Gordon &
Reindel from 1969 to 1975. Mr. Burns holds a bachelor's degree in economics from
Holy Cross College and a law degree from Fordham University School of Law.
PETER D. HALSTEAD
Peter D. Halstead, a director of the Company since June 1994, has been
with Summit Bank since 1971 and is currently an Executive Vice President. Mr.
Halstead serves as a Trustee for numerous associations including McCarter
Theatre and Cancer Care of New Jersey. Mr. Halstead holds a bachelor's degree
from Colgate University and a master's degree in business administration from
Fairleigh Dickinson University.
-3-
<PAGE>
DIRECTORS CONTINUING IN OFFICE
CLASS I - Term Expires at the 2000 Annual Meeting
WARREN L. SERENBETZ
Warren L. Serenbetz has been a director of the Company since February
1988 and served as Executive Consultant through January 1995. He has also been a
director of Trac Lease since its founding in November 1986. After co-founding
Interpool Limited in 1968, Mr. Serenbetz served as Interpool Limited's President
and Chief Executive Officer and as a director until 1975, after which he was
director, Chairman of the Executive Committee and Chief Executive Officer until
his retirement in 1986. Mr. Serenbetz rejoined the Board of Directors of
Interpool Limited in 1988. Mr. Serenbetz is currently president of Radcliff
Group, Inc. He has been active in industry affairs, serving as an officer,
director and member of various world trade and shipping associations. Mr.
Serenbetz holds a bachelor's degree in engineering from Columbia University and
a master's degree in industrial engineering from Columbia University.
JOSEPH J. WHALEN
Joseph J. Whalen, a director of the Company since April 1996, originally
joined the accounting firm of Arthur Andersen LLP in 1957 and served as an audit
partner in Andersen's New York and New Jersey offices for more than ten years
prior to his retirement in 1994. Mr. Whalen is a member of the American
Institute of Certified Public Accountants and the New Jersey State Society of
Certified Public Accountants where he previously served on the Cooperation with
Credit Grantors Committee and the Technical Standards Section of the
Professional Conduct Committee. Mr. Whalen is a Certified Public Accountant in
New Jersey and New York and holds a bachelor's degree from St. Peter's College.
CLASS II- Term Expires at the 2001 Annual Meeting
RAOUL J. WITTEVEEN
Raoul J. Witteveen has been President, Chief Operating Officer, Chief
Financial Officer and a director of the Company since March 1993 and has been
President, Chief Operating Officer, Chief Financial Officer and a director of
Interpool Limited, a subsidiary of the Company, since April 1988. He is a
co-founder of Trac Lease, Inc. ("Trac Lease"), a subsidiary of the Company and
has been Chief Financial Officer, Vice President and a director of Trac Lease
since June 1987. From 1982 to 1986, Mr. Witteveen served in a variety of
management capacities at Thyssen-Bornemisza N.V., the former parent of Interpool
Limited. In 1997, Mr. Witteveen was appointed to the Board of Directors of
Almedica International, Inc., a clinical trial materials company which provides
services to the pharmaceutical industry. Mr. Witteveen holds a bachelor's degree
in economics and business administration and a master's degree in economics from
the Erasmus University in Rotterdam, The Netherlands.
MITCHELL I. GORDON
Mitchell I. Gordon, a director of the Company since 1998, has been
President of Atlas Capital Partners, a private equity investment fund, since
February 1998. Prior thereto, he was Managing Director of Salomon Smith Barney
and co-head of its Transportation Investment Banking Group from July 1993 to
January 1998. From 1988-1993, Mr. Gordon was Senior Vice President of Furman
Selz Inc., where he ran the firm's Transportation and Automotive Investment
Banking groups. From 1984-1988, he was a Vice President of Needham & Company
Inc. From 1981-1984, he held various executive positions at American
Broadcasting Companies, Inc. Mr. Gordon also serves as a director of Indigo
Aviation A.B. and holds a bachelor of science/bachelor of arts degree from
Washington University and a masters degree in business administration from
Harvard Business School.
-4-
<PAGE>
NON-DIRECTOR EXECUTIVE OFFICERS
WILLIAM A. GEOGHAN
William Geoghan has served as Senior Vice President of the Company and
of Interpool Limited and Trac Lease since May 1, 1998. Previously, Mr. Geoghan
served as Controller of the Company from April 1992 and Vice President and
Controller of Interpool Limited from January 1989. Mr. Geoghan joined Interpool
Limited in 1981 and served as assistant controller for Interpool Limited 1985 to
1989. Mr. Geoghan is a Certified Public Accountant and holds a bachelor's degree
in commerce from Rider University.
ERNST BAENZIGER
Ernst Baenziger has been an employee of Interpool since 1977, serving as
Senior Vice President and a director of Interpool Limited since 1991. Mr.
Baenziger is responsible for Europe, Far East, Australia and New Zealand
operations. He is also Managing Director of Interpool Limited's Basel,
Switzerland branch, handling sales and operations, and managing director of CTC
Equipment A.G. Mr. Baenziger holds a bachelor's degree in economics and business
administration from Handelshochschule, St. Gallen.
SHELDON LANDY
Sheldon Landy, Vice President of the Company since 1993, has been
President of the Company's Railpool division since 1979. Mr. Landy is a member
of the Transportation Research Board, a part of the National Research Council
and serves as a committee member studying the intermodal transportation
industry. Mr. Landy holds a bachelor's degree in liberal arts from the
University of Chicago and a master's degree in business administration from
Northwestern University.
Committees of the Board
The Board has standing Compensation, Audit and Stock Option Committees,
but no Nominating Committee. Special Committees are appointed from time to time
by the Board.
Compensation Committee. The 1998 Compensation Committee was composed of
Messrs. Tuchman, Halstead and Whalen. The Committee's functions are to review
the Company's general compensation strategy, establish salaries, review benefit
programs and approve certain employment contracts. The Compensation Committee
met once in fiscal 1998.
Compensation Committee Interlocks and Insider Participation
During fiscal year 1998, Mr. Tuchman participated in
deliberations of the Compensation Committee and the Company's Board of Directors
concerning executive officer compensation. Mr. Tuchman did not participate in
discussions regarding compensation of the Company's Chief Executive Officer.
-5-
<PAGE>
Audit Committee. The 1998 Audit Committee was comprised of independent
directors Messrs. Halstead and Whalen. The Audit Committee's functions are to
review management's maintenance of systems of internal control, financial
reporting and application of generally accepted accounting principles. In
addition, the Audit Committee reviews the scope of the services of the Company's
independent auditors and may recommend the independent auditors for appointment
by the Board of Directors subject to Stockholder approval. The Audit Committee
met once in 1998.
Stock Option Committee. The 1998 Stock Option Committee was composed of
Messrs. Tuchman and Halstead. The Company's 1993 Stock Option Plan for Executive
Officers and Directors (the "Stock Option Plan") was adopted by the Company's
Board of Directors and approved by the stockholders in March 1993 and amended in
May 1996. A total of six million shares of common stock have been reserved for
issuance under the Stock Option Plan. Options may be granted under the Stock
Option Plan to executive officers and directors of the Company or a subsidiary
(including any executive consultant of the Company and its subsidiaries),
whether or not they are employees.
To date, options to purchase 4,408,501 shares under the 1993 Stock Option
Plan for Executive Officers and Directors have been granted, 22,500 of which
have expired due to failure to exercise and 22,500 of which have been exercised.
Options to purchase 75,000 shares have been granted under the Non Qualified
Stock Option Plan for Non-Employee, Non-Consultant Directors, 30,000 of which
have expired due to failure to exercise and 15,000 of which have been exercised.
No other options under either the 1993 Stock Option Plan for Executive Officers
and Directors or the Non-Qualified Stock Option Plan for Non-Employee,
Non-Consultant Directors have been exercised to date.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid or accrued by the
Company to or on behalf of its Chief Executive Officer and each of its other
four most highly compensated executive officers who earned over $100,000 in 1998
for services rendered in all capacities during the years ended December 31,
1998, 1997 and 1996.
-6-
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
------------------- Other ------------
Name and Principal Position Year Salary Bonus Compensation # of Stock
--------------------------- ---- ------ ----- ------------ ----------
(1) (2) Options
------- -------
<S> <C> <C> <C> <C> <C>
Martin Tuchman 1998 703,550 1,104,170 33,877 2,280,000 (3)
Chairman of the Board of Directors 1997 670,047 470,000 22,803 855,000 (4)
Chief Executive Officer and Director 1996 638,141 464,580 72,079 225,000 (4)
Raoul J. Witteveen 1998 495,835 1,002,660 25,191 1,140,000 (3)
President, Chief Financial Officer 1997 472,224 330,000 18,000 427,500 (4)
Chief Operating Officer and Director 1996 449,737 302,290 36,239 112,500 (4)
Ernst Baenziger 1998 198,652 0 780,000 (2)
Sr. Vice President, Interpool 1997 180,446 0 743,663 (2)
Limited 1996 179,702 0 516,667 (2)
Sheldon Landy 1998 160,000 50,000 0
Vice President; President of 1997 160,000 40,000 0
The Railpool Division 1996 152,000 40,000 0
William A. Geoghan 1998 90,000 70,000 0 7,500 (3)
Senior Vice President 1997 90,000 50,000 0 7,500 (4)
1996 85,000 40,000 0
</TABLE>
(1) Amounts listed include payments made to or on behalf of the executive for
certain Company provided automobile and related expenses and medical
expense reimbursement as provided for in the executive's Employment
Agreement.
(2) Amounts listed as Other Compensation include sales commissions paid.
(3) These options represent options originally granted prior to fiscal year
1998 but which were repriced during 1998 in connection with an Option
Exchange Program described in the Section of this Proxy Statement entitled
"Stock Option Repricing Report and Table."
(4) Options cancelled in connection with Option Exchange Program described in
the Section of this Proxy Statement entitled "Stock Option Repricing Report
and Table."
The following table sets forth information regarding the grant of stock
options to certain individuals under the Non-Qualified Stock Option Plan for
Executive Officers and Directors and the Non-Qualified Stock Plan for
Non-Employee, Non-Consultant Directors during Fiscal 1998. The tables also
contain hypothetical potential realizable value during the option terms,
assuming a 5% and 10% annual rate of appreciation for all stockholders.
-7-
<PAGE>
OPTION GRANTS DURING FISCAL 1998
AND
ASSUMED POTENTIAL REALIZABLE VALUES
<TABLE>
<CAPTION>
Potential Realizable Value
% of Total at Assumed Annual Rates
Options Stock Appreciation
Number Granted to for Option Term (2)(3)
Options Employees in Exercise Expiration ----------------------------
Name Granted (1) Fiscal 1998 Price Date 5% 10%
---- ----------- ----------- ----- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Martin Tuchman 2,280,000 51.9% 10.25 9/16/2008 $14,697,267 $37,245,761
Raoul J. Witteveen 1,140,000 25.9% 10.25 9/16/2008 $7,348,634 $18,622,881
Warren L. Serenbetz 668,438 15.2% 10.25 9/16/2008 $4,308,865 $10,919,510
Arthur L. Burns 96,563 2.2% 10.25 9/16/2008 $622,462 $1,577,440
Peter D. Halstead 60,000 1.4% 10.25 9/16/2008 $386,770 $980,152
Joseph J. Whalen 37,500 0.9% 10.25 9/16/2008 $241,731 $612,595
William Geoghan 7,500 0.2% 10.25 9/16/2008 $ 48,346 $122,519
All Stockholders 27,556,452 -- 10.25 9/16/2008 $177,633,572 $450,158,348
</TABLE>
(1) All options granting during fiscal 1998 represented options originally
granted prior to fiscal year 1998 which were repriced during 1998 in
connection with an Option Exchange Program described in the section of
this Proxy Statement entitled "Stock Option Repricing Report and Table."
(2) Amounts for the named individuals shown under the "Potential Realizable
Value" columns above have been calculated by multiplying the exercise
price by the annual appreciation rate shown (compounded for the term of
the options), subtracting the exercise price per share and multiplying
the gain per share by the number of shares covered by the options.
(3) The amounts under these columns are the result of calculations at the 5%
and 10% rates set by the Securities and Exchange Commission and are not
intended to forecast possible future appreciation of the Company's stock
prices.
Stock Option Repricing Report and Table.
On September 16, 1998, after considering the impact of the Company's
reduced stock price and resulting diminution of value of then outstanding
options held by individuals who are integral to the Company's long term success,
the Stock Option Committee determined that the disparity between the original
exercise prices and the market price of the Common Stock did not further the
executive incentive and retention objectives of the Company's stock option
plans. All then serving officers, directors and employees were granted an
opportunity to exchange all of their outstanding stock options (which were
exercisable at prices ranging from $7.67 to $15.58 per share) for new stock
options at an exercise price of $10.25, the market closing price on September
16, 1998. No partial exchanges were permitted and therefore, a number of options
held by Messrs. Tuchman and Witteveen, among others, were repriced at a higher
exercise price. All of the individuals who were offered the exchange opportunity
participated in the Stock Option Exchange Program. The newly issued options vest
six months from the grant date and expire ten years from the grant date. All
other terms and conditions of the newly issued options are the same as those of
the cancelled options.
The following table sets forth certain information concerning the Option
Exchange Program, including (i) the name and position of each executive officer
who participated in the Option Exchange Program, (ii) the date of the repricing
pursuant to the Option Exchange Program, (iii) the number of shares of Common
Stock underlying the exchanged options, (iv) the per share market price of the
Common Stock at the time of the exchange, (v) the original exercise price or
base price of the canceled option at the time of exchange, (vi) the per share
exercise price of the option received in exchange for the existing option and
(vii) the original option term remaining at the date of exchange.
-8-
<PAGE>
10 Year Repricing Table
<TABLE>
<CAPTION>
Number of Length of
Securities Original Option
Underlying Market Price of Exercise Price Term Remaining
Options Stock at time of at Time of New at Date of
Repriced or Repricing or Repricing or Exercise Repricing or
Name Date Amended (#) Amendment ($) Amendment ($) Price Amendment
---- ---- ----------- ------------- ------------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
M. Tuchman 9/16/98 600,000 10.25 9.33 10.25 5 yrs. 11 mo.
Chairman of the Board 9/16/98 600,000 10.25 9.33 10.25 6 yrs. 2 mo.
Chief Executive Officer 9/16/98 225,000 10.25 11.08 10.25 7 yrs. 5 mo.
Director 9/16/98 855,000 10.25 15.58 10.25 8 yrs. 5 mo.
R. J. Witteveen 9/16/98 300,000 10.25 9.33 10.25 5 yrs. 11 mo.
President, Director 9/16/98 300,000 10.25 9.33 10.25 6 yrs. 2 mo.
Chief Financial Officer 9/16/98 112,500 10.25 11.08 10.25 7 yrs. 5 mo.
Chief Operating Officer 9/16/98 427,500 10.25 15.58 10.25 8 yrs. 5 mo.
W. L. Serenbetz 9/16/98 262,500 10.25 9.33 10.25 5 yrs. 11 mo.
Director 9/16/98 262,500 10.25 9.33 10.25 6 yrs. 2 mo.
9/16/98 98,438 10.25 11.08 10.25 7 yrs. 5 mo.
9/16/98 45,000 10.25 15.58 10.25 8 yrs. 5 mo.
A. L. Burns 9/16/98 37,500 10.25 9.33 10.25 5 yrs. 11 mo.
Director 9/16/98 37,500 10.25 9.33 10.25 6 yrs. 2 mo.
9/16/98 14,063 10.25 11.08 10.25 7 yrs. 5 mo.
9/16/98 7,500 10.25 15.58 10.25 8 yrs. 5 mo.
P. D. Halstead 9/16/98 15,000 10.25 7.67 10.25 7 yrs. 9 mo.
Director 9/16/98 15,000 10.25 9.33 10.25 6 yrs. 2 mo.
9/16/98 7,500 10.25 11.08 10.25 7 yrs. 5 mo.
9/16/98 22,500 10.25 15.58 10.25 8 yrs. 5 mo.
J. J. Whalen 9/16/98 15,000 10.25 12.17 10.25 7 yrs. 6 mo.
Director 9/16/98 22,500 10.25 15.58 10.25 8 yrs. 5 mo.
All other employees 9/16/98 88,500 10.25 15.58 10.25 8 yrs. 5 mo.
</TABLE>
Stock Option Committee Report on the Option Exchange Program
The Stock Option Committee grants stock options with the goals of
ensuring that the interests of the Company's officers, directors and employees
remain closely aligned with those of the Company's stockholders and creating
incentive for officers, directors and employees to remain with the Company for
the long term. In order to further such goals, in September 1998, the Stock
Option Committee believed it appropriate to adjust the exercise price of
previously granted options so that the new exercise price would more closely
approximate the market price, and therefor provide greater incentive for the
Company's officers, directors and employees. The Committee determined that
offering the Option Exchange Program was in the best interest of the Company and
its stockholders. Accordingly, on September 16, 1998, the Stock Option Committee
authorized the exchange of outstanding options granted to officers, directors
and employees for new options with an exercise price of $10.25 per share, the
market price on September 16, 1998. In addition, the Stock Option Committee has
determined that it will not grant options to the Company's top executives during
fiscal 1999.
Respectfully submitted,
Martin Tuchman
Peter D. Halstead
-9-
<PAGE>
Directors' Compensation; Attendance
Each member of the Board who is not an officer or executive consultant
receives an annual fee of $5,000 for serving on the Board plus $500 and
reimbursement of expenses for each Board or committee meeting attended.
The Board of Directors met four times during fiscal year 1998. Each
current director attended at least 75% of all meetings of the Board of Directors
and committees to which he was assigned that were held during 1998.
Directors' Stock Options
The Company's Non-Qualified Stock Option Plan for Non-Employee,
Non-Consultant Directors (the "Directors' Plan") was adopted by the Board of
Directors and approved by the stockholders in March 1993. The Directors' Plan
provides for the automatic grant of non-qualified options to non-employee,
non-consultant directors at the time the director first joins the Board. The
Directors' Plan authorizes grants of options up to an aggregate of 150,000
shares of common stock. The exercise price per share is the fair market value of
the Company's common stock on the date the person becomes a director. The
options granted pursuant to the Directors' Plan may be exercised at the rate of
one-third of the shares on the first anniversary of the options' grant date,
one-third of the shares on the second anniversary of the options' grant date and
one-third of the shares on the third anniversary of the options' grant date,
subject to applicable holding periods required under rules of the Securities and
Exchange Commission. Options granted pursuant to the Directors' Plan will expire
ten years from their grant date except that in the event of the death of a
director, the option must be exercised within six months of the date of death
or, in the event of resignation of a director, the option must be exercised
within ten days of the date of resignation. The Directors' Plan is administered
by the Stock Option Committee of the Board of Directors. Pursuant to the
Directors' Plan, an option to purchase 15,000 shares of common stock was granted
to Peter D. Halstead upon his appointment to the Board of Directors in June 1994
and to Mr. Whalen upon his appointment in April, 1996. In addition, directors of
the Company may be granted options under the 1993 Stock Option Plan for
Executive Officers and Directors as adopted by the Board of Directors and
approved by the Stockholders in March 1993. On September 16, 1998, pursuant to
the Option Exchange Program, 15,000 options held by each of Messrs. Halstead and
Whalen were cancelled and replaced with newly issued options with an exercise
price equal to the closing market price on September 16, 1998, the grant date,
which vest six months from the grant date and expire ten years from the grant
date. All other terms and conditions of the newly issued options are the same as
those of the cancelled options.
Employment Contracts
The Company has entered into employment agreements with Raoul J.
Witteveen and Martin Tuchman, each dated as of January 1, 1992, as amended and
restated in February 1993 (the "Employment Agreement"). Each of the Employment
Agreements currently expires on December 31, 2005, except that on each January
1, the expiration date of each employment agreement is automatically extended
for an additional year unless the Company or the employee party to such
employment agreement has given written notice of an election not to extend
beyond the end of the then current seven-year term. Notice of any such election
not to extend the expiration date must be delivered not less than six months
prior to the next occurring January 1.
-10-
<PAGE>
As compensation for the services to be rendered under their employment
agreements, Mr. Tuchman is currently paid an annual base salary of $738,728 and
Mr. Witteveen is currently paid an annual base salary of $520,627. The base
salary under each employment agreement increases by a minimum of 5% each year.
In addition, each of Messrs. Tuchman and Witteveen is entitled to receive an
annual bonus equal to 2%, in the case of Mr. Tuchman, or 1%, in the case of Mr.
Witteveen, of the amount of any increase in the Company's net income during the
year from its net income in the preceding year. Mr. Tuchman and Mr. Witteveen
may be entitled to receive discretionary additional bonuses based on the
performance of the Company as determined by the Company's Compensation
Committee. Each employment agreement (i) includes a non-competition provision;
(ii) provides that, in the event of the employee's death, the employee's base
salary will continue to be paid to his beneficiary for two additional years and,
in the event of termination of the employee without cause, the employee will
continue to receive his base salary for the entire remaining term then in effect
under the employment agreement; and (iii) provides for reimbursement to the
employee, for both the employee and his spouse, of all health related costs and
expenses that are not advanced or reimbursed to the employee pursuant to Company
medical and dental insurance plans, which additional reimbursement continues for
a period of five years after expiration of the employment agreement.
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee, in conjunction with the full Board, plays a
significant role in establishing corporate goals and strategies and reviewing
progress and performance. The Compensation Committee's objectives are to attract
and retain experienced and highly competent executives and, further, to both
provide incentive and to recognize the individual's contributions toward
accomplishing corporate objectives including increasing shareholder value. The
elements of total executive compensation reflect the objectives of the
Compensation Committee. The base salaries of the Chairman/Chief Executive
Officer and the President/Chief Financial Officer are supplemented by bonuses
which are calculated on the basis of the increase in the Company's net income
from that of the preceding year and stock price performance, among other things.
In addition, performance driven discretionary bonuses are awarded to the
Chairman/Chief Executive Officer and the President/Chief Financial Officer and
other executive officers based on the Committee's evaluation of the individual's
actual participation and contribution to achieving Company and shareholder goals
and objectives.
The Company retained the services of an independent consulting firm, MK
Partners & Co., ("MK Partners"), to review the Company's executive compensation
practices and to provide industry comparable data. In so doing, the Compensation
Committee was provided with a quantifiable evaluation for their consideration in
establishing total compensation packages for the Company's executives. MK
Partners examined both finance/leasing companies and transportation firms,
including the Company's direct competitors, and prepared a comparative analysis
of financial performance and compensation practices. MK Partners also assisted
the Compensation Committee in examining 200 publicly traded small to medium
market capitalization companies by various criteria. Based on their study, MK
Partners has advised the Compensation Committee that the Company's executive
compensation programs and policies are appropriate and competitive with those of
comparable companies.
-11-
<PAGE>
Base Salary
The base salaries of Messrs. Tuchman and Witteveen are established under
employment agreements (see "Employment Contracts"). In accordance with the terms
of the Employment Agreements, each of the named executive officers' base salary
reflects a 5% increase above the annual base salary for the preceding year. In
reviewing the Company's performance against its business objectives for 1998
noting specifically the Company's 1998 record revenues, earnings per share and
cash flows as well as the significant increase in fleet size while maintaining
utilization in excess of 98%, the Committee believes that the "hands on"
involvement in all phases of the Company's operations contributes significantly
to realizing Company objectives and recommended that the base salary of Messrs.
Tuchman and Witteveen continue to be paid at the levels established under the
terms of the Employment Agreements.
Bonuses
To reward performance, bonuses are paid to the Chairman and Chief
Executive Officer and other executive officers. The cash bonus awards are
directly tied to the performance of the Company and the contribution of the
individual in achieving the Company's performance objectives. In determining the
amount of the cash bonus to be awarded, the Compensation Committee considers the
increase between the Company's net income for the preceding fiscal year and the
Company's net income for the current fiscal year, stock price performance and
the efforts of the individual which contributed to the increase. In the case of
Messrs. Tuchman and Witteveen, the Employment Agreements provide that the annual
bonus may not be less than two percent of the increase in the Company's net
income. Through the use of an actual formula to which bonuses are directly tied
to increased net income, the Compensation Committee furthers the Company's
overall objective of enhancing profitability and increasing shareholder value.
Following each fiscal year, the Committee establishes a bonus pool, the amount
of which is based upon a subjective assessment of overall Company and individual
performance and the extent to which the Company achieved its overall financial
goals, growth and return on equity. The Committee believes that the "at risk"
feature of discretionary bonuses and bonuses directly tied to percentage
increase of Company net income best serves the interests of the Company and its
shareholders. Mr. Tuchman withdrew from discussions regarding his award.
Stock Options
Stock Options awards by the Stock Option Committee, including the stock
option repricing during 1998, were considered by the Compensation Committee in
evaluating total compensation and assuring that executive rewards are aligned
with long term stockholder value. Other than in connection with the Option
Exchange Program, no options were granted in fiscal 1998.
Tax Deductibility of Compensation
As part of the Omnibus Budget Reconciliation Act of 1993 (the "Act"),
certain provisions regarding executive compensation for officers of public
companies were added to the Internal Revenue Code. Under the Act, the Internal
Revenue Service has issued proposed regulations setting forth exclusions from
the Act's general disallowance of ordinary business expense deduction for
compensation in excess of $1 million paid to a company's chief executive officer
and each of the next four most highly compensated executive officers. The
Compensation Committee has decided that at this time no measures will be
undertaken to alter the compensation plans, but will continue to review the
issue and evaluate whether compensation plans should be altered in the future to
satisfy the deductibility requirements.
Respectfully submitted,
Peter D. Halstead
Warren L. Serenbetz
Martin Tuchman
Joseph J. Whalen
-12-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's common stock as of April 12, 1999 by
certain beneficial owners, each of the Company's directors, certain executive
officers and all executive officers and directors as a group.
<TABLE>
<CAPTION>
Options
Exercisable
Number of Within Percentage
Name of Beneficial Owner Shares (1) 60 Days Of Class (1)
- ------------------------ ---------- ------- ------------
<S> <C> <C> <C>
Officers and Directors:
Martin Tuchman (2)(3)........................................................ 9,613,026 2,280,000 32.2%
Raoul J. Witteveen (2)(4).................................................... 4,772,050 1,140,000 16.6%
Warren L. Serenbetz (2)(5)(6)................................................ 1,704,501 668,438 6.0%
Arthur L. Burns (7)......................................................... 300,519 96,563 1.0%
Mitchell I. Gordon .......................................................... 0 60,000 *
Peter D. Halstead ........................................................... 61,500 60,000 *
Joseph J. Whalen............................................................. 32,500 32,500 *
Sheldon Landy................................................................ 0 0 *
Ernst Baenziger.............................................................. 25,000 0 *
William A. Geoghan........................................................... 9,300 7,500 *
Executive officers and directors as a
group (ten persons) ......................................................... 15,921,822 4,345,001 49.9%
Other Stockholders:
Hickory Enterprises, L.P. (8)............................................... 5,088,911 0 16.9%
165 Signal Hill North
Wilton, Connecticut 06897-1933
Warren L. Serenbetz Jr. (9)(10).............................................. 283,646 0 1.03%
c/o American National Can Co.
101 Merritt 7, 3rd Floor
Norwalk, CT 06856
Paul H. Serenbetz (9)(10).................................................... 283,646 0 1.03%
c/o The Morgan School
Route 81
Clinton, CT 06413
Stuart W. Serenbetz (9)(10).................................................. 283,646 0 1.03%
c/o Turner Development Corp.
375 Hudson Street, 6th Floor
New York, NY 10014
Clay R. Serenbetz (9)(10).................................................... 283,646 0 1.03%
c/o Radcliff Group, Inc.
695 West Street
Harrison, NY 10528
The Chartres Limited Partnership (11)........................................ 90,000 0 *
c/o Interpool, Inc.
633 Third Avenue
New York, NY 10017
</TABLE>
-13-
<PAGE>
*Less than 1%
(1) Includes shares subject to options which are exercisable within 60 days. In
the event that all said options were exercised, the total outstanding
number of the shares of the Company's common stock would be 31,896,729. The
percentage of class is calculated on the basis of an assumption that only
the named individual exercised all of his options.
(2) The business address of each of these individuals is 211 College Road East,
Princeton, New Jersey 08540.
(3) Includes 4,749 shares of which Mr. Tuchman's mother is the record owner;
3,037 shares held by Mr. Tuchman's wife; 8,668 shares held by a pension
plan f/b/o Mr. Tuchman; 50,119 shares held by a revocable grantor trust of
which Mr. Tuchman is the grantor and trustee and Mr. Tuchman's brother is
the beneficiary; 10,948 shares representing Mr. Tuchman's 99% interest in
shares held by Martom Associates; and 144,755 shares representing Mr.
Tuchman's 28.57% interest in shares held by The Ivy Group, a New Jersey
partnership. (4) Includes 1,500 shares of which Mr. Witteveen's wife is the
record owner and 72,400 shares representing Mr. Witteveen's 14.29% interest
in shares held by The Ivy Group, a New Jersey partnership. (5) Includes
144,755 shares representing Mr. Serenbetz's 28.57% interest in shares held
by The Ivy Group, a New Jersey partnership (6) The Serenbetz Trust, of
which Warren L. Serenbetz and Thelma R. Serenbetz, Mr. Serenbetz's wife,
serve as co-trustees, is the record owner of these shares of the Company's
common stock. The beneficiaries of the Serenbetz Trust are members of the
immediate family of Warren L. Serenbetz. (7) Includes 111 shares
representing Mr. Burns' 1% interest in shares held by Martom Associates.
(8) On November 30, 1994, Hickory Enterprises, L.P., a Delaware limited
partnership ("Hickory") was formed. Warren L. Serenbetz contributed
2,238,911 shares of the Company's common stock in exchange for a 44%
interest as a limited partner in Hickory. One half of that interest was
assigned to the Warren L. Serenbetz Retained Annuity Trust, Warren L.
Serenbetz, Jr., Trustee. Each of Warren L. Serenbetz, Jr., Stuart W.
Serenbetz, Paul H. Serenbetz and Clay R. Serenbetz contributed 641,250
shares of the Company's common stock in exchange for a 12.6% interest as a
limited partner and 71,250 shares for a 1.4% interest as a general partner
in Hickory. Each of the four general partners in Hickory have one vote in
matters before Hickory. Limited partners do not have any voting rights or
rights to participate in the management or operations of Hickory. (9) Each
of Warren L. Serenbetz, Jr., Paul H. Serenbetz, Stuart W. Serenbetz and
Clay R. Serenbetz is a son of Warren L. Serenbetz. None of Mr. Serenbetz's
sons are minors. (10) Does not include Mr. Serenbetz's interest in shares
held by Hickory described in footnote (8) above. (11) On February 1, 1995,
Arthur L. Burns entered into an Agreement of Limited Partnership pursuant
to which Mr. Burns contributed 90,000 shares of restricted common stock to
The Chartres Limited Partnership ("Chartres"), in exchange for a 98%
limited partnership interest in Chartres. Each of Meredith K. Burns and
Kristin M. Burns, daughters of Arthur L. Burns, are the other limited
partners and the general partners of Chartres. Limited partners do not have
any voting rights or rights to participate in the management or operation
of Chartres.
Stockholders' Agreement
Martin Tuchman, Raoul J. Witteveen, Arthur L. Burns, Hickory
Enterprises L.P., Warren L. Serenbetz Revocable Trust, Warren L. Serenbetz, Jr.,
Stuart W. Serenbetz, Paul H. Serenbetz, Clay R. Serenbetz and Chartres Limited
Partnership, who collectively own directly or indirectly 66.9% of the Company's
common stock, are parties to an Amended and Restated Stockholders' Agreement
-14-
<PAGE>
dated May 3, 1994 pursuant to which they have agreed not to sell or transfer any
shares of Common Stock beneficially owned by them to any person other than the
Company or the other parties to the Stockholders' Agreement without the consent
of the other parties to the Stockholders' Agreement, unless (i) such shares are
first offered to the Company for purchase at a per share price equal to the
price offered by any third party making a bona fide offer to buy such shares for
cash, cash equivalents or marketable securities (or if no such bona fide offer
has been received, at a price equal to the average closing price of a share of
Common Stock on the New York Stock Exchange over a period of twenty trading
days), and the company does not elect to purchase such shares, and (ii) such
shares are then offered to the other parties to the stockholders' agreement for
purchase by them at the same per share price described in clause (i) and the
other stockholders do not elect to purchase such shares. Notwithstanding the
foregoing, the parties to the Stockholders' Agreement may transfer shares of
Common Stock to one or more of certain members of their immediate families (or
trusts for the benefit of such family members) so long as each transferee agrees
to be bound by the terms of the Stockholders' Agreement. The Stockholders'
Agreement further provides that if the Company (which is not a party to the
Stockholders' Agreement) elects to purchase any shares offered to it by a party
to the Stockholders' Agreement and the shares offered represent greater than 10%
of the shares of the Company held by the offeror, the Company shall have the
right to pay the purchase price of such shares by delivery of a promissory note,
payable in equal monthly installments (with interest at the prime rate) over the
following year. Pursuant to the Stockholders' Agreement, each of the parties
thereto has agreed to vote for the re-election of Messrs. Tuchman, Serenbetz,
Witteveen and Burns as directors of the Company. The Stockholders' Agreement
continues in effect until 2003. Shared voting power with the other parties to
the Stockholders' Agreement is acknowledged but the existence of a group or
beneficial ownership of shares owned by other parties to the Stockholders'
Agreement is disclaimed.
Beneficial Ownership Reports
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors to file certain reports of ownership
and reports of changes of ownership of the Company's equity securities with the
Securities and Exchange Commission. Executive officers and directors are
required to furnish the Company with copies of all Section 16(a) forms that they
file. Based upon a review of these filings and written representations from
certain of the Company's directors and executive officers, the Company notes
that all changes in beneficial ownership were reported on Form 4 as required in
1998.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's senior executive officers have interests in other entities
that have entered into financing, leasing and other transactions with the
Company (including its subsidiaries). The Ivy Group, a New Jersey partnership
composed of Mr. Tuchman, Radcliff Group, Mr. Witteveen, Thomas P. Birnie and
Graham K. Owen, has invested in chassis which it has leased to Trac Lease. As of
December 31, 1998, pursuant to equipment lease agreements, Trac Lease leases
7,030 chassis from The Ivy Group for aggregate annual lease payments of
approximately $3.4 million. Such leases either renew automatically unless
canceled by either party prior to the first day of the renewal period or expire
in 2000. Radcliff Group and Martin Tuchman share equally in the net income of
The Ivy Group derived from 1,184 chassis owned either directly or indirectly by
Radcliff Group and Mr. Tuchman (the "Contributed Chassis"). In addition, each of
Radcliff Group and Mr. Tuchman receives 28.5% of the net income of The Ivy
Group, other than that derived from the Contributed Chassis. Mr. Witteveen
receives 14.3% of the net income of The Ivy Group, other than that derived from
the Contributed Chassis. In 1998, 28.5% of the aggregate income of The Ivy Group
was derived from the Contributed Chassis and 71.5% was derived from other
-15-
<PAGE>
activities. The terms of all agreements between The Ivy Group and Trac Lease,
including rental rates, are fixed and, in the opinion of the Company's
management, are comparable to terms that the Company would have obtained in
arms' length transactions with unrelated third parties. The Company has been
advised by the principals of The Ivy Group that the personal tax consequences to
such principals would make it inadvisable to terminate the transactions entered
into with the Company. The Ivy Group has entered into an agreement with the
Company pursuant to which it has agreed not to engage in any business
activities, except extensions or renewals of existing lease agreements that are
competitive with the Company's business activities without the prior written
consent of the Company.
On August 10, 1992, The Ivy Group borrowed $7.1 million from the
Company evidenced by a promissory note due in July 1997 (the "Ivy Loan"). In
connection with this promissory note, The Ivy Group executed a Chattel Mortgage,
Security Agreement and Assignment under which the Company, as secured party, was
granted a security interest in 4,364 chassis owned by The Ivy Group and was
granted an assignment of all rights to receive rental payments and proceeds
related to the lease and sublease of such chassis (the "Ivy Collateral"). The
interest rate on the promissory note was 11%. The Company then pledged the Ivy
Collateral to secure an $8 million loan to the Company at a fixed interest rate
of 7.5% (the "Bank Loan"). On November 12, 1993, the Company increased its
outstanding balance under the Bank Loan to approximately $12 million by
borrowing an additional $4.8 million at a floating interest rate of LIBOR plus
1.25%. In consideration of The Ivy Group's consent to the Company's use of the
Ivy Collateral to secure the additional borrowing, the interest rate on the Ivy
Loan was reduced to match the Company's borrowing rate of 7.1% under the fixed
rate portion of the Bank Loan.
In 1996, The Ivy Group borrowed an additional $7 million from the Company
by increasing its outstanding balance under the Ivy Loan from $6.4 million to
$13.4 million, reflecting the current estimated loan value of the Ivy
Collateral. Under the terms of the amended Ivy Loan, the entire new balance
bears interest at LIBOR plus 1.75% repayable over a five year term on an
interest only basis, subject to maintenance of fixed loan-to-collateral value
ratios. The Company was also granted the right to continue to utilize the Ivy
Collateral to secure additional Company financings.
On August 15, 1992, Eurochassis L.P., a New Jersey limited partnership in
which Raoul J. Witteveen is one of the limited partners and the general partner,
entered into a master equipment lease agreement, as lessor, with Trac Lease, as
lessee, pursuant to which Eurochassis L.P. leases 100 chassis to Trac Lease for
an annual lease payment of $91,250. The annual lease term renews automatically
unless canceled by either party prior to the first day of the renewal period.
The terms of such master equipment lease agreement, in the opinion of the
Company's management, are comparable to terms that Trac Lease would have
obtained in an arms' length transaction with an unrelated third party.
The Company entered into a Consultation Services Agreement with Radcliff
Group, Inc. ("Radcliff") dated as of January 1, 1992, as amended and restated in
February 1993, pursuant to which Radcliff appointed Warren L. Serenbetz, a
stockholder and director of the Company, as Executive Consultant. The
Consultation Services Agreement was terminated as of January 1, 1995. In
accordance with the terms of the Consultation Services Agreement, Radcliff is
entitled to receive its full annual consultation services fee in the amount of
$491,990 through December 31, 2002 and reimbursement to both the designated
Executive Consultant and his spouse, of all health related costs and expenses
that are not advanced or reimbursed to the Executive Consultant pursuant to
Company medical and dental insurance plans.
-16-
<PAGE>
On January 30, 1998, the Company entered into a Consulting Agreement with
Mitchell I. Gordon, a director, pursuant to which Mr. Gordon will provide
investment consulting services to the Company for a term of two years. Under the
terms of the Consulting Agreement, Mr. Gordon is entitled to annual compensation
at the rate of $240,000 plus reimbursement of reasonable expenses and a bonus of
$560,000. In addition, Mr. Gordon will receive an annual bonus in such amount as
is usual and customary in the investment banking business for investment
opportunities actually completed by the Company subject to set-off of the
$560,000 bonus. In connection with investment opportunities presented by Mr.
Gordon, the Company has agreed to permit participation in the form of a twenty
percent share basis in any realized profit in the event that the Company shall
form or participate in an equity capital fund. In the case of other investments,
Mr. Gordon shall receive 4% of the investment's appreciation amount above the
Company's acquisition cost and subject to the Company's 8% priority return per
annum. The Consulting Agreement does not grant Mr. Gordon exclusive rights to
provide such services to the Company.
The Company leases approximately 19,000 square feet of commercial space
for its executive offices in Princeton, New Jersey from 211 College Road
Associates, a New Jersey general partnership. Martin Tuchman holds a direct or
indirect equity interest of 28.85% and Radcliff Group holds a direct or indirect
equity interest of 28.15% in 211 College Road Associates. The annual rental for
this property is approximately $338,000, plus additional amounts for utilities,
real estate taxes and operating and maintenance costs, under a lease expiring in
2001, subject to renewal. In the opinion of the Company's management, rent being
paid under this lease does not exceed rent that the Company would have paid in
an arms' length transaction with an unrelated third party.
-17-
<PAGE>
STOCK PERFORMANCE GRAPH
The graph below compares cumulative stockholder returns for the Company
for the preceding fiscal year with the Standard & Poor's 500 Stock Index and the
Dow Jones Transportation Index. The graph assumes the investment of $100 at the
commencement of the measurement periods and that all dividends were reinvested.
<TABLE>
<CAPTION>
Cumulative Total Return
---------------------------------------------------
12/93 12/94 12/95 12/96 12/97 12/98
<S> <C> <C> <C> <C> <C> <C>
INTERPOOL, INC. 100 74 90 119 114 131
S & P 500 100 101 139 171 229 294
DOW JONES TRANSPORTATION AVERAGE 100 84 117 134 199 194
</TABLE>
-18-
<PAGE>
ITEM 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed Arthur Andersen LLP as the
Company's independent accountants for the fiscal year ending December 31, 1999
("Fiscal 1999"). Arthur Andersen LLP has served as the Company's independent
accountants since 1988. Services provided to the Company and its subsidiaries by
Arthur Andersen LLP with respect to the fiscal year ended December 31, 1998
included the audit of the Company's consolidated financial statements, limited
reviews of quarterly reports, services related to filings with the Securities
and Exchange Commission and consultations on various tax and information
services matters. A representatives of Arthur Andersen LLP will be present at
the Annual Meeting to respond to appropriate questions and to make such
statements as they may desire.
Ratification of the appointment of Arthur Andersen LLP as the Company's
independent accountants for Fiscal 1999 will require the affirmative vote of a
majority of the shares of common stock represented in person or by proxy and
entitled to vote at the Annual Meeting.
The Board of Directors recommends that stockholders vote "FOR"
ratification of the appointment of Arthur Andersen LLP as the Company's
independent accountants for Fiscal 1999.
OTHER MATTERS
As of the date of this proxy statement, the Company knows of no business
that will be presented for consideration at the Annual Meeting other than the
items referred to above. Proxies in the enclosed form will be voted in respect
of any other business that is properly brought before the Annual Meeting in
accordance with the judgment of the person or persons voting the proxies.
-19-
<PAGE>
STOCKHOLDER PROPOSALS FOR THE YEAR 2000 ANNUAL MEETING
Any proposal of a stockholder intended to be presented at the Company's
Year 2000 Annual Meeting of Stockholders must be received by the Secretary of
the Company by February 25, 2000, for inclusion in the Company's proxy, notice
of meeting and proxy statement relating to the Year 2000 Annual Meeting.
FINANCIAL REPORTS
Stockholders who wish to receive the Company's Quarterly Reports on Form
10-Q and to be included on the Company's mailing list may call the Company at
(609) 452-8900 (between 9 a.m. and 5 p.m. Eastern Time) or write to the Company
at 211 College Road East, Princeton, New Jersey 08540 Attention: Investor
Relations.
OTHER INFORMATION
Stockholders are invited to visit the Company's internet website at
http://www.interpool.com for real-time information throughout the year, links to
Edgar filings and a discussion board for ongoing conversations about the
Company.
By Order of the Board of Directors
--------------------------------
Martin Tuchman
Chairman/Chief Executive Officer
-20-
<PAGE>
INTERPOOL, INC.
211 COLLEGE ROAD EAST
PRINCETON, NEW JERSEY 08540
PROXY--Annual Meeting of Stockholders--May 26, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Martin Tuchman and Raoul J. Witteveen as
Proxies, each with the power to appoint his substitute, and hereby authorizes
each of them to represent and to vote, as designated below, all the shares of
common stock of Interpool, Inc. held of record by the undersigned on April 12,
1999, at the Annual Meeting of Stockholders to be held on May 26, 1999 or any
adjournment thereof.
<TABLE>
<CAPTION>
<S> <C> <C>
1. ELECTION OF DIRECTORS: FOR all nominees listed below / / WITHHOLD AUTHORITY / /
(except as marked to the contrary below) to vote for all nominees listed below
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below.)
MARTIN TUCHMAN, ARTHUR L. BURNS, PETER D. HALSTEAD
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE INDEPENDENT
PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31,
1999.
FOR / / AGAINST / / ABSTAIN / /
(Continued and to be signed on Reverse Side)
<PAGE>
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment.
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
IN FAVOR OF ALL NOMINEES LISTED FOR ELECTION AS DIRECTORS AND RATIFICATION OF
ARTHUR ANDERSEN LLP.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE.
---------------------------------------
Date
---------------------------------------
Signature
---------------------------------------
Signature, if held jointly
