PRELIMINARY COPY - SUBJECT TO COMPLETION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14A-101)
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
THE CRONOS GROUP
(Name of Registrant as Specified in Its Charter)
INTERPOOL, INC.
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] 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:
PRELIMINARY COPY - - SUBJECT TO COMPLETION
PROXY STATEMENT OF INTERPOOL, INC.
IN OPPOSITION TO THE BOARD OF DIRECTORS
OF THE CRONOS GROUP
---------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 26, 1999
---------------------------------------------
This Proxy Statement and the enclosed BLUE proxy card are being
furnished by Interpool, Inc., a Delaware corporation ("Interpool"), in
connection with the solicitation by Interpool of proxies from the holders
of common shares, par value $2.00 per share (the "Shares" or the "Cronos
Common Stock"), of The Cronos Group, a societe anonyme organized under the
laws of Luxembourg ("Cronos"), to be used at the 1999 Annual Meeting of
Shareholders of Cronos, and at any and all adjournments, postponements,
continuations or reschedulings thereof (the "Annual Meeting"). According to
the preliminary proxy statement (the "Management Proxy Statement") filed by
Cronos with the Securities and Exchange Commission (the "Commission"), the
Annual Meeting will be held at 10:00 a.m., local time, on Tuesday, October
26, 1999, at the Hotel Le Royal, 12 Boulevard Royal, Luxembourg.
This Proxy Statement and the enclosed BLUE proxy card are first being
sent or given on or about [ ], 1999 to all holders of record of Shares on
September 10, 1999 (the "Record Date").
THIS SOLICITATION IS BEING MADE BY INTERPOOL, AND NOT ON BEHALF OF
THE BOARD OF DIRECTORS OF CRONOS.
At the Annual Meeting, one director of Cronos will be elected for a
one-year term expiring at the 2000 Annual Meeting of Shareholders, two
directors of Cronos will be elected for two-year terms expiring at the 2001
Annual Meeting of Shareholders, and two directors of Cronos will be elected
for three-year terms expiring at the 2002 Annual Meeting of Shareholders.
Interpool is soliciting your proxy in support of the election of the
following five persons to be nominated by Interpool (collectively, the
"Nominees") as directors of Cronos: Clifton H.W. Maloney for a one-year
term expiring at the 2000 Annual Meeting of Shareholders; Richard Maisto
and Edmund P. Hennelly for two-year terms expiring at the 2001 Annual
Meeting of Shareholders; and Robert S. Malina and Jolmer D. Gerritse for
three-year terms expiring at the 2002 Annual Meeting of Shareholders.
Shareholders of Cronos are asked to vote in favor of Interpool's Nominees
on the enclosed BLUE proxy card.
The election of the Nominees to the Board of Directors of Cronos (the
"Cronos Board") is designed to expedite the prompt consummation of the
proposed acquisition by merger of, or similar negotiated business
combination transaction involving, Cronos by Container Applications
International, Inc. ("CAI"), a Nevada corporation and a 50% owned affiliate
of Interpool whose business is primarily in the intermodal container
leasing business (the "Proposed Cronos Sale"). Upon consummation of the
Proposed Cronos Sale, all Cronos shareholders would receive $5 in cash (the
"Proposed Sale Consideration") for each share of Cronos Common Stock owned
by them. The Proposed Cronos Sale is described in more detail below. The
Proposed Cronos Sale would be subject to customary conditions, including,
among others, negotiation of a definitive acquisition agreement,
confirmatory due diligence (including confirmation that the Proposed Cronos
Sale would not adversely impact Cronos' litigation against its former
Chairman and Chief Executive Officer, Stefan M. Palatin), absence of a
material adverse change affecting Cronos, regulatory and other approvals.
If the Nominees are elected to the Cronos Board, Interpool and CAI
would promptly seek to enter into negotiations with Cronos with respect to
the Proposed Cronos Sale and would simultaneously request that they be
permitted to conduct, pursuant to an appropriate confidentiality agreement,
confirmatory due diligence with respect to Cronos. If Cronos enters into
negotiations with Interpool and CAI, such negotiations may result in a
definitive acquisition agreement between Cronos and CAI, and the
consideration to be received by the holders of Shares could include or
consist of consideration other than cash. Accordingly, such negotiations
could result in, among other things, changes to the terms of the Proposed
Cronos Sale and the submission of a different acquisition proposal to
Cronos' shareholders for their approval. However, there can be no assurance
that any such negotiations will either occur and/or result in a definitive
agreement. Although Interpool does not presently intend to unilaterally
alter the terms of the Proposed Cronos Sale, it is possible that, depending
on the facts and circumstances existing at the time, the terms might be
altered in one or more respects.
INTERPOOL RECOMMENDS THAT YOU VOTE IN FAVOR OF INTERPOOL'S NOMINEES.
The Proposed Sale Consideration of $5 per Share in cash represents a
premium of approximately 33.3% over the closing price per Share on
September 22, 1999, the last full trading day prior to the public
announcement of Interpool's and CAI's interest in pursuing an acquisition
transaction with Cronos.
The purpose of the Proposed Cronos Sale is to enable CAI to acquire
control of, and the entire equity interest in, Cronos. Interpool, through
its 50% interest in CAI, would be a controlling person of Cronos. Cronos
has indicated to Interpool that it is not presently interested in
negotiating such a transaction.
Consequently, Interpool is seeking to elect to the Cronos Board five
persons who, subject to their fiduciary duties as directors of Cronos,
intend to (a) take all necessary action to expedite the prompt consummation
of the Proposed Cronos Sale, or (b) if any other transaction offering more
value to Cronos' shareholders is proposed, take actions to facilitate such
a transaction. Accordingly, one possible result of the election of
Interpool's Nominees could be to facilitate the consummation of the
Proposed Cronos Sale.
Cronos reported in the Management Proxy Statement that, as of [the
Record Date], Cronos' outstanding voting securities consisted of 9,158,378
shares of Cronos Common Stock. Each share of Cronos Common Stock is
entitled to one vote. As of the date hereof, each of Interpool and CAI
had record ownership of 100 Shares. Each of Interpool and CAI may be deemed
to beneficially own the Shares held of record by the other. This Proxy
Statement and the enclosed BLUE proxy card will be delivered to holders of
at least the percentage of the Shares required under applicable law to
elect Interpool's Nominees.
ELECTION OF INTERPOOL'S NOMINEES IS AN IMPORTANT STEP TOWARD PROMPT
CONSUMMATION OF THE PROPOSED CRONOS SALE. ACCORDINGLY, YOU ARE URGED TO
PROMPTLY SIGN AND DATE THE ENCLOSED BLUE PROXY CARD AND RETURN IT IN THE
ENCLOSED ENVELOPE PROMPTLY. NO ADDITIONAL POSTAGE IS NECESSARY IF SUCH
ENVELOPE IS MAILED IN THE UNITED STATES.
Interpool and CAI have retained Innisfree M&A Incorporated
("Innisfree") to assist in the solicitation of proxies.
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IMPORTANT
1. If your Cronos shares are held in your own name, please sign, date
and mail the enclosed BLUE proxy card in the envelope provided.
2. If your Cronos shares are held in the name of a brokerage firm, bank
nominee or other institution, only it can vote your shares and only
upon receipt of specific instructions from you. Please contact the
person responsible for your account and give instructions for a BLUE
proxy card to be signed representing your shares of Cronos stock.
Interpool urges you to confirm in writing your instructions to the
person responsible for your account and to provide a copy of those
instructions to Interpool, in care of Innisfree M&A Incorporated, 501
Madison Avenue, 20th Floor, New York, NY 10022, so that Interpool
will be aware of all instructions given and can attempt to ensure
that such instructions are followed.
3. Only shareholders of record on September 10, 1999 are entitled to
vote at the annual meeting of Cronos shareholders. Interpool urges
each shareholder to ensure that the record holder of his or her
shares signs, dates and returns the enclosed BLUE proxy card as soon
as possible.
Do not sign or return any proxy card you may receive from Cronos.
Even if you previously have voted on Cronos' proxy card, you have every
legal right to change your vote by signing, dating and returning the
enclosed BLUE proxy card. Only your latest dated proxy card will count.
If you have any questions or require any assistance in executing your
proxy, please call the firm assisting Interpool in the solicitation of
proxies:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Call Collect: (212) 750-5833
Call Toll-Free: (888) 750-5834
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TABLE OF CONTENTS
Page
REASONS FOR THE SOLICITATION ..............................................5
ELECTION OF INTERPOOL'S NOMINEES ..........................................5
THE PROPOSED CRONOS SALE ..................................................8
BACKGROUND OF THE PROPOSED CRONOS SALE.....................................9
OTHER MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING......................15
VOTING INFORMATION .......................................................18
SOLICITATION OF PROXIES; EXPENSES.........................................19
CERTAIN INFORMATION ABOUT INTERPOOL AND CAI...............................19
OTHER INFORMATION.........................................................20
SCHEDULE I...............................................................I-1
SCHEDULE II.............................................................II-1
REASONS FOR THE SOLICITATION
Interpool is soliciting proxies to elect Interpool's Nominees in
order to expedite the prompt consummation of the Proposed Cronos Sale. The
purpose of the Proposed Cronos Sale is to enable CAI to acquire control of,
and the entire equity interest in, Cronos. Interpool, through its 50%
interest in CAI, would be a controlling person of Cronos. AS DESCRIBED
BELOW, THE NOMINEES, IF ELECTED, INTEND TO SUPPORT THE PROPOSED CRONOS
SALE, SUBJECT TO FULFILLMENT OF FIDUCIARY DUTIES THEY WOULD HAVE AS
DIRECTORS OF CRONOS.
Interpool believes that the Proposed Cronos Sale is in the best
interests of the shareholders of Cronos because, among other things, the
Proposed Sale Consideration that would be received by Cronos shareholders
reflects a substantial and certain premium over the closing price of the
Shares prior to the public announcement of Interpool's and CAI's interest
in pursuing a transaction with Cronos. The Proposed Sale Consideration of
$5 per Share in cash for all shares of Cronos Common Stock (other than
Shares owned by Interpool or any of its affiliates and Shares held in the
treasury of Cronos or any of its subsidiaries), represents (i) a premium of
approximately 33.3% over the $3.75 price per Share closing price of the
Shares on September 22, 1999, the last full trading day prior to the public
announcement of Interpool's and CAI's interest in pursuing a transaction
with Cronos, (ii) a premium of approximately 25% over the 30-day average
closing price prior to September 23, 1999 of $4 per Share, and (iii) a
premium of approximately 20% over the 60-day average closing price prior to
September 23, 1999 of $4.162 per Share.
The Nominees, if elected, intend to (a) take all necessary action to
expedite the prompt consummation of the Proposed Cronos Sale, or (b) if any
other transaction offering more value to Cronos' shareholders is proposed,
take such actions as are necessary to facilitate such a transaction,
subject in all cases to fulfillment of the fiduciary duties to Cronos
shareholders that the Nominees would have as directors of Cronos.
Accordingly, one possible result of the election of Interpool's Nominees
would be that they would facilitate the consummation of the Proposed Cronos
Sale.
ELECTION OF INTERPOOL'S NOMINEES
Interpool is soliciting your proxy in support of the election to the
Cronos Board of the following five persons to be nominated by Interpool:
Clifton H.W. Maloney for a one-year term expiring at the 2000 Annual
Meeting of Shareholders; Richard Maisto and Edmund P. Hennelly for two-year
terms expiring at the 2001 Annual Meeting of Shareholders; and Robert S.
Malina and Jolmer D. Gerritse for three-year terms expiring at the 2002
Annual Meeting of Shareholders.
INTERPOOL RECOMMENDS THAT YOU VOTE IN FAVOR OF INTERPOOL'S NOMINEES.
Interpool is proposing the five Nominees named in the table below for
election as directors of Cronos. Each of the Nominees has consented to
serve as a Nominee and to serve as a director, if elected, until the
expiration of his term and until his successor has been elected and
qualified. None of the Nominees is a director or officer of Interpool, CAI
or their respective affiliates.
The Cronos Board is currently comprised of four directors. According
to the Management Proxy Statement, the size of the Cronos Board has been
expanded from four to six seats. Five of the six seats on the Cronos Board
will be filled at the Annual Meeting, while the sixth seat will continue to
be held by incumbent director Maurice Taylor, whose term as a director of
Cronos does not expire until the Cronos 2000 Annual Meeting of
Shareholders. Each of Interpool and the current Cronos Board has designated
five nominees to fill the five available seats on the Cronos Board, and
whichever slate of nominees is elected by Cronos shareholders at the Annual
Meeting will represent a majority of the Cronos Board.
Interpool's primary purpose in seeking to elect the Nominees to the
Cronos Board is to facilitate the consummation of the Proposed Cronos Sale.
However, the Nominees, if elected, would be responsible for managing the
business and affairs of Cronos. Under the Luxembourg Companies Law of
August 10, 1915, as amended (the "LCL"), each director of Cronos has
certain fiduciary duties to the shareholders of Cronos. In connection
therewith, circumstances may arise in which the interests of Interpool and
its affiliates, on the one hand, and the interests of the other
shareholders of Cronos, on the other hand, may differ. In any such case,
each Nominee, if elected, intends to discharge his fiduciary duties owing
to Cronos and its shareholders in compliance with the LCL. Although
Interpool has no reason to believe that any of the Nominees would be unable
or unwilling to serve as directors, if any of the Nominees is not available
for election, the BLUE proxy card will be voted for the election of such
other nominee or nominees as may be designated by Interpool.
The Nominees' decisions regarding the appropriate process for dealing
with the Proposed Cronos Sale and any other acquisition proposal would be
based upon advice of counsel and would necessarily also be based on events
and circumstances that the Nominees are not aware of, as well as events and
circumstances that have not yet occurred and cannot readily be predicted,
such as (a) actions of the Cronos Board not known to the Nominees
(including any solicitation or receipt of expressions of interest from
other third party buyers), (b) the views of the Nominees, (c) the views of
officers and other executives of Cronos, (d) developments in Cronos'
business, operations and financial performance, (e) changes in the U.S. and
global economies, debt and equity markets, and (f) any future judicial
decisions regarding actions of the current Cronos Board.
Set forth below are the names of and certain biographical information
relating to the Nominees.
NOMINEES
EMPLOYMENT HISTORY OR PRESENT
NAME, BUSINESS PRINCIPAL OCCUPATION AND
ADDRESS AND AGE FIVE-YEAR EMPLOYMENT HISTORY
--------------- -----------------------------
Clifton H. W. Maloney President of C.H.W. Maloney & Co.
c/o C.H.W. Maloney & Co. Incorporated Incorporated, merchant banking firm,
708 Third Avenue, Suite 2010 since 1981; Director of HSBC Mutual
New York, NY 10017 Funds Trust, HSBC Funds Trust and
Age 61 The Wall Street Fund, Inc.
Robert S. Malina Self-employed investment banker since
Three Lincoln Center, 51B January 1995; President of Malina,
New York, NY 10023 Bodner & Associates, an investment
Age 60 banking firm, from October 1980
through December 1994.
Richard Maisto Managing Director of Morpheus Capital
c/o Morpheus Capital Advisors, LLC Advisors, LLC, an investment banking
14 Latimer Road firm, since June 1999. Mr. Maisto
Santa Monica, CA 90402 also served as Managing Director,
Age 42 Corporate Finance, of BT Alex Brown
Incorporated, an investment banking
firm, from March 1997 to June 1999.
He also served as Managing
Director, Corporate Finance, of
Smith Barney Inc., an investment
banking firm, from 1993 to 1996.
Jolmer D. Gerritse Vice-Chairman of SNS Securities N.V.,
c/o SNS Securities N.V. an investment banking firm,
Nieuwezijds Voorburgual 162 since March 1981.
P.O. Box 235
100 EA Amsterdam, The Netherlands
Age 48
Edmund P. Hennelly Chief Executive Officer and President
c/o Citroil Enterprises of Citroil Enterprises, an
21 Argyle Square agricultural products company, since
Babylon, New York 11702 June 1983. Director of Republic
Age 76 National Bank of New York.
None of the Nominees owns any Shares, nor is there any material
relationship between any Nominee and Cronos.
Interpool has agreed to pay each Nominee a fee of $5,000 for agreeing
to serve as a Nominee; additional fees may be paid, as appropriate and
agreed upon, for any additional services rendered. Furthermore, it is
anticipated that each Nominee, upon election, will receive a to be
determined director's fee for services as a director of Cronos. Interpool
has agreed to indemnify each Nominee, to the fullest extent permitted by
the Delaware General Corporation Law, as amended, and other applicable law,
from and against any and all expenses, liabilities or losses of any kind
arising out of any threatened or filed claim, action, suit or proceeding,
whether civil, criminal, administrative or investigative, asserted against
or incurred by the Nominee in his capacity as a Nominee for election as a
director of Cronos, and, if elected, as a director of Cronos, arising out
of his status in either such capacity; provided, however, that Interpool
will not be liable if such expense, liability or loss resulted from bad
faith, willful misconduct or gross negligence on the Nominee's part.
Interpool has also agreed to reimburse each Nominee for his reasonable
out-of-pocket expenses, including reasonable fees and expenses of counsel.
INTERPOOL RECOMMENDS THAT YOU VOTE IN FAVOR OF THE ELECTION OF ITS
NOMINEES TO THE CRONOS BOARD.
Election of each of the Nominees as directors of Cronos will require
the affirmative vote of the holders of a simple majority of the outstanding
Shares. Consequently, only Shares that are voted in favor of a particular
Nominee will be counted toward such Nominee's attaining the vote of a
simple majority of the outstanding Shares. Shares that are not voted for a
particular Nominee (including broker non-votes and abstentions), and Shares
present by proxy where the shareholder properly withholds authority to vote
for such Nominee, will not be counted for such Nominee's attainment of a
simple majority of outstanding Shares.
Shareholders who use the BLUE proxy card furnished by Interpool will
not be able to vote for any of the nominees of Cronos' management. Any
shareholder who wishes to vote for one or more of the Nominees and one or
more of Cronos' nominees will be required to vote by ballot at the Annual
Meeting.
THE PROPOSED CRONOS SALE
The purpose of the Proposed Cronos Sale is to enable CAI to acquire
control of, and the entire equity interest in, Cronos. Interpool, through
its 50% interest in CAI, would be a controlling person of Cronos. Interpool
currently intends, as soon as practicable following the election of
Nominees to a majority of the directorships of the Cronos Board, to propose
and seek to have Cronos negotiate and consummate the Proposed Cronos Sale.
Pursuant to the Proposed Cronos Sale, each then outstanding share of Cronos
Common Stock (other than Shares owned by Interpool or any of its affiliates
and Shares held in the treasury of Cronos or any of its subsidiaries) would
be converted into the right to receive an amount in cash equal to the
Proposed Sale Consideration. On September 22, 1999, the last full trading
day prior to the date of the public announcement of Interpool's and CAI's
interest in pursuing a transaction with Cronos, the closing price of the
Shares on the NASDAQ National Market was $3.75 per Share. Accordingly, the
Proposed Sale Consideration of $5 per Share represents a premium of
approximately 33.3% over such closing price.
While Interpool and Cronos have engaged in discussions in the past
with respect to the combination of Cronos and CAI, Cronos has indicated to
Interpool that it is not presently interested in negotiating such a
transaction. If Cronos agrees to resume negotiations with Interpool,
whether before or after the Nominees are elected to the Cronos Board, such
negotiations may result in a definitive acquisition agreement between
Cronos and CAI, and the consideration to be received by holders of Shares
could include or consist of consideration other than cash. Accordingly,
such negotiations could result in, among other things, changes to the terms
of the Proposed Cronos Sale. However, there can be no assurance that any
such negotiations will either occur and/or result in a definitive
agreement.
BACKGROUND OF THE PROPOSED CRONOS SALE
Interpool's interest in pursuing a transaction with Cronos or its
major shareholders dates back to 1994. Interpool believes that by combining
Cronos with CAI, it could create a leading container leasing company.
Accordingly, in 1994, Interpool's senior management began informal
discussions with the senior management of Cronos concerning such a
potential business combination.
In the fall of 1996, there were various discussions among Interpool,
Cronos, Stefan M. Palatin (who was then the Chairman of the Board and Chief
Executive Officer of Cronos) and Alex. Brown & Sons Incorporated ("Alex.
Brown") (Cronos' financial advisor at the time). Such discussions centered
upon the purchase by Interpool of the shares of Cronos Common Stock then
held by Mr. Palatin and Laurence Sargent, a founder of Cronos and then a
director of Cronos.
On November 15, 1996, Interpool, Cronos and Mr. Palatin entered into
a confidentiality agreement. Following the execution of such
confidentiality agreement, Cronos provided Interpool with various financial
and operating information. In connection with Interpool's due diligence
review, Alex. Brown provided Interpool with financial forecasts prepared by
Cronos with respect to Cronos' 1997 fiscal year. Based upon such forecasts
and subject to confirmatory due diligence, Interpool indicated to Mr.
Palatin that it was prepared to consider a purchase price of $16 per share
for his and Mr. Sargent's shares of Cronos Common Stock. Interpool's due
diligence review of Cronos continued through the end of January 1997.
On January 30, 1997, Interpool delivered a letter to Mr. Palatin
wherein Interpool proposed acquiring all of the shares of Cronos Common
Stock held by Mr. Palatin and Mr. Sargent for a purchase price in the range
of $10 to $11 per share. The reduction in the proposed purchase price from
$16 per share was as a result of Interpool concluding, based upon its due
diligence, that the earlier projections provided by Cronos to Interpool
were not reasonably attainable. Interpool's proposal contemplated that the
purchase price consideration for the shares held by Messrs. Palatin and
Sargent would consist of both cash and shares of Interpool common stock. On
the day preceding Interpool's January 30, 1997 proposal, which was not
publicly disclosed, the closing price of Cronos Common Stock on the NASDAQ
National Market was $7 per share.
On January 31, 1997, Mr. Palatin rejected Interpool's proposal and
informed Interpool that he would only proceed if Interpool increased its
proposed purchase price to $16 per share of Cronos Common Stock. Following
various discussions between Interpool and Mr. Palatin and exchanges of
correspondence, negotiations between the parties were terminated in early
February 1997.
On April 7, 1997, Interpool delivered a letter to the Cronos Board
informing it that Interpool was prepared to purchase up to 100 percent of
the outstanding shares of Cronos Common Stock for $7 per share in an
all-cash transaction that would be structured as either a one-step cash
merger or a tender offer for all of the shares of Cronos Common Stock
followed by a back-end merger. Interpool never received a formal response
from the Cronos Board. On the day preceding Interpool's April 7, 1997
offer, which was not publicly disclosed, the closing price of Cronos Common
Stock on the NASDAQ National Market was $5 per share.
At various times between April 1997 and May 1998, representatives of
Interpool engaged in discussions with several of the significant
shareholders of Cronos (other than Mr. Palatin) to determine their interest
in selling their shares of Cronos Common Stock to Interpool and to
determine whether they would support the acquisition of Cronos by Interpool
or CAI. Such discussions were informal in nature and did not result in any
arrangements with, or any binding commitments on the part of, any
shareholders of Cronos.
In June 1998, members of Interpool's senior management met in London
with members of Cronos' senior management to explore the possibility of a
business combination between Interpool and Cronos. No specific proposals
were made by either party at the meeting, although Interpool and Cronos
both indicated a willingness to have further discussions to explore a
possible business combination.
In February 1999, Raoul J. Witteveen, President, Chief Operating
Officer and Chief Financial Officer of Interpool, met in New York with
Dennis J. Tietz, who had been recently appointed as the Chief Executive
Officer of Cronos. No specific proposals were made by either party at the
meeting, although Interpool and Cronos both indicated a willingness to have
further discussions to explore a possible business combination.
On or about May 18, 1999, Interpool and Cronos entered into a new
confidentiality agreement. Following the execution of this agreement, the
parties exchanged certain information about their respective operations.
In late May 1999, representatives of the senior management of
Interpool and Cronos met in San Francisco to continue their discussions
regarding a possible business combination between Interpool and CAI. No
specific proposals were made by either party at the meeting, although
Interpool and Cronos both indicated a willingness to have further
discussions to explore a possible business combination.
In June 1999, discussions between Interpool's and Cronos' senior
management progressed through various meetings and telephone calls. Around
this time, Interpool received a letter from Cronos wherein Cronos proposed
acquiring CAI in a stock-for-stock transaction. Interpool ultimately
rejected this proposal because it viewed the implied valuation of CAI as
being too low.
In July 1999, Interpool delivered to Cronos a proposal to combine CAI
with and into Cronos through a stock-for-stock merger. The proposal
contemplated that Cronos would issue to the stockholders of CAI $48 million
of newly-authorized, 6% cumulative convertible preferred stock for all of
the outstanding shares of CAI's common stock. The newly-authorized
preferred stock would be entitled to a 6% dividend to be payable in cash or
in additional shares of the preferred stock. The proposal also contemplated
that each share of preferred stock would be convertible into shares of
Cronos Common Stock at a conversion price of $6 per share.
On or about August 3, 1999, members of the senior management of
Interpool and Cronos, together with their respective advisors, met to
discuss the merger proposal put forth by Interpool. Later that week, Mr.
Tietz informed Interpool that the Cronos Board had reviewed Interpool's
merger proposal and determined that it was not ready to proceed further for
at least the next 90 days. Mr. Tietz indicated the possibility of meeting
again to discuss a business combination in either October or November.
At various times from August to September 1999, representatives of
Interpool again engaged in discussions with several of the significant
shareholders of Cronos (other than Mr. Palatin) to determine their interest
in selling their shares of Cronos Common Stock to Interpool and to
determine whether they would support the acquisition of Cronos by Interpool
or CAI. Such discussions were informal in nature and did not result in any
arrangements with, or any binding commitments on the part of, any
shareholders of Cronos.
On or about September 8, 1999, Mr. Witteveen contacted Mr. Tietz by
telephone. During the course of such call, Mr. Tietz advised Mr. Witteveen
that the Cronos Board was concerned that representatives of Interpool had
been engaging in discussions with various shareholders of Cronos. On
September 13, 1999, Interpool received a letter from counsel to Cronos
requesting that Interpool cease contacting any of Cronos' major
shareholders.
On September 21, 1999, Mr. Witteveen contacted Mr. Tietz by telephone
to inform him that Interpool would be shortly delivering to him a letter
that would contain a proposal by Interpool to have CAI acquire Cronos.
Later that day, Interpool delivered the following letter to Cronos:
September 21, 1999
Mr. Dennis Tietz
Chairman, President and Chief Executive Officer
The Cronos Group
444 Market Street
15th Floor
San Francisco, CA 94111
Dear Dennis:
As you know from our various meetings and discussions over the
past several months, the Board of Directors and management of
Interpool, Inc. are interested in pursuing a business combination
transaction between The Cronos Group ("Cronos") and our 50% owned
affiliate, Container Applications International, Inc. ("CAI"). We have
repeatedly attempted to negotiate in good faith with Cronos a possible
transaction. However, after months of discussions, last month Cronos
advised us that it was not prepared to pursue a transaction.
In our previous discussions, we expressed an interest in
combining CAI and Cronos through Cronos' acquisition of CAI. We are
also prepared to enter into good faith negotiations with Cronos now to
structure an acquisition of Cronos by CAI, pursuant to which each
shareholder of Cronos would receive $5 per share in cash. This price
represents a premium of approximately 33% over yesterday's closing
price of Cronos' shares. Accordingly, we believe that your
shareholders and Board of Directors should find our proposed
transaction compelling.
We believe that the combination of CAI and Cronos would create
a leading container leasing company. Given what can be accomplished by
such a combination for employees, customers and other constituencies,
and the premium that would be received by Cronos shareholders, we hope
that your Board of Directors will reconsider its previous
unwillingness to move forward with a transaction.
Set forth below is a summary of the terms of a possible
transaction that we would be prepared to discuss.
Price and Structure
o Cronos would be merged with CAI in a one-step or two-step
transaction. We propose that all shareholders of Cronos receive
$5 per share in cash in the transaction.
Continuity of Management and Operations
o We recognize that your Board will want to understand how you and
your management team would fit into the leadership structure of
the new company. We hope and expect that you and your team would
continue to play an important role in the combined operations
moving forward and look forward to discussing this with you.
o We recognize that Cronos has gone through a rough period over the
last several years and are confident that you and the workforce
in the combined organization would find a professionally
exciting, stable, challenging and rewarding environment, as well
as a strong sense of shared purpose and camaraderie.
Timing and Process
We are confident that Cronos shareholders will find our
proposal attractive and hope that your Board of Directors will give it
prompt consideration. We and our colleagues at CAI stand ready to meet
with you promptly to discuss any and all aspects of the terms and
structure of our proposed transaction. In particular, if, in the
course of negotiations and due diligence you can demonstrate greater
value for Cronos, we would be prepared to consider an increase in our
proposed purchase price.
Our proposal and its terms are subject to customary conditions,
including, among others, negotiation of a definitive acquisition
agreement, confirmatory due diligence (including confirming that our
transaction would not adversely impact Cronos' litigation against its
former Chairman and Chief Executive Officer, Stefan M. Palatin),
absence of a material adverse effect and regulatory and other
approvals. We believe that our confirmatory due diligence can be
completed in a short period.
Our preference has always been and remains to effect a
transaction on a negotiated and confidential basis. However, in the
event that we do not receive a satisfactory response by 3:00 p.m., New
York City time, on September 22, 1999, we intend to take our proposal
directly to your shareholders. We are confident that, given the
significant premium we are proposing as well as its certainty of value
since we are using cash consideration, your shareholders will find our
proposal extremely compelling.
We urge your management and your Board of Directors to
recognize the value and benefits of our proposed transaction.
Sincerely,
/s/ Raoul J. Witteveen
On September 22, 1999, Cronos delivered the following letter to
Interpool:
September 22, 1999
VIA TELECOPIER TO (212) 986-2038
Raoul Witteveen
President
Interpool, Inc.
633 Third Avenue
New York, New York 10017
Dear Raoul:
I respond to your letter to me of yesterday. The time period
you establish for a response, noon our time, today, is unrealistic, as
surely you must know. Two of our Directors reside in Europe. We have
been unable to convene our Board, with our advisors, to consider a
response to your proposal. We will do so at the earliest practical
time, but quite obviously, we are unable to do so by your artificial
deadline.
I can say, based upon our discussions over these past few
months, that I am surprised and disappointed in your proposal.
As you well know, and acknowledge in your letter, the
transaction we have discussed involved an acquisition by Cronos of
CAI. We have never indicated to you that Cronos is for sale. The
strategy of new management, under my direction, has been to take
measures to reorganize the corporate governance of the Company, to
refinance its existing debt, to reduce expenses, and to enhance
revenues. We have made progress in our efforts and anticipate
continued success in our efforts to return Cronos to profitability. We
have shared our plans and confidential information with you these past
few months, confident that you would observe the confidentiality
provisions of our Confidentiality Agreement, and are disappointed that
you are exploiting the confidences we have shared with you in making
your proposal.
The purpose of this letter is simply to advise you that we
cannot meet the artificial deadline established in your letter for a
Board response to you proposal, but will do so as soon as practicable.
Obviously, in a matter of this magnitude, the Board cannot act without
full and complete information, including advice from our outside
financial advisors. We are sure that you would not expect us to act
otherwise, and that you recognize that your deadline is not realistic.
We are also sure that you recognize that your offer cannot be
made to the public without disclosing material non-public information
which was only disclosed to you pursuant to the confidentiality
Agreement. Any such disclosure would constitute a clear violation of
the Confidentiality Agreement. Accordingly, a public announcement of
your offer, which has not been accepted by Cronos, may confuse our
shareholders and employees and the investing public and may interfere
with our lessee, supplier, and other business relationships to the
serious detriment of, and possible damage to, our shareholders and us.
We shall hold you responsible for any such damage, and neither this
letter nor any further communication by us to you in intended as a
waiver of the rights of our shareholders or us.
Very truly yours,
/s/ Dennis J. Tietz
Dennis J. Tietz
Chief Executive Officer
Later that day, Interpool delivered the following letter to Cronos:
September 22, 1999
Mr. Dennis Tietz
Chairman, President and Chief Executive Officer
The Cronos Group
444 Market Street, 15th Floor
San Francisco, CA 94111
Dear Dennis:
I am in receipt of your letter faxed earlier this afternoon.
We are disappointed by your lack of a substantive response to
our acquisition proposal.
We disagree with your assertions regarding the confidentiality
agreement and the circumstances regarding our previous discussions. As
you well know, there is absolutely nothing in the agreement that
prevents us from presenting an acquisition proposal or conducting a
proxy solicitation. We assure you that none of our actions will be in
violation of that agreement.
We trust that you and your Board of Directors will not take any
action that interferes with the fundamental right of your shareholders
to consider and act upon our proposal, including their right to elect
directors whom they believe will best represent their interests.
Sincerely,
/s/ Raoul J. Witteveen
On September 23, 1999, Interpool issued a press release publicly
announcing the proposal made in its September 21, 1999 letter and its plan
to solicit proxies from the Cronos shareholders to elect Interpool's five
Nominees to the Cronos Board at the Annual Meeting.
OTHER MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
According to the Management Proxy Statement, in addition to the
election of directors, Cronos shareholders will be asked to consider and
act upon the following eight Proposals (the "Management Proposals"):
MANAGEMENT PROPOSAL NO. 2
Management Proposal No. 2 is to approve the grant of a stock option
to Peter J. Younger, the Chief Financial Officer of Cronos. According to
the Management Proxy Statement, in December 1998, the Cronos Board agreed,
in order to induce Mr. Younger to remain with Cronos, and subject to
shareholder approval, to grant to him an option to purchase 200,000 Shares
at $4.375 per Share, the closing price of the Shares, as reported on the
NASDAQ National Market, on December 11, 1998.
If the stock option grant is approved, the term of Mr. Younger's
option will run for ten years from the date of grant (June 3, 1999). Mr.
Younger's stock option vests and becomes exercisable over three years, with
one-third of the Shares subject to such option exercisable on each of the
first three anniversaries of the date of grant, conditional upon Mr.
Younger's continued employment by Cronos. If Mr. Younger's employment
terminates by reason of death, permanent disability, removal (other than
for cause), termination following a change of control of Cronos, or by
reason of a breach by Cronos of Mr. Younger's employment agreement or a
reduction in his title, position, duties and/or authority, then Mr.
Younger's option will vest in full.
MANAGEMENT PROPOSAL NO. 3
Management Proposal No. 3 is to approve Cronos' 1999 Stock Option
Plan (the "Stock Option Plan"). According to the Management Proxy
Statement, the Stock Option Plan was approved by the Cronos Board on June
3, 1999. The Stock Option Plan will replace Cronos' Management Equity
Investment Plan. The stated purposes of the Stock Option Plan are to
attract, motivate and retain key employees, to compensate them for their
contributions to Cronos' growth and profits and to encourage them to own
Shares. A total of 500,000 Shares are authorized for issuance under the
Stock Option Plan, and the aggregate number of stock options that may be
awarded to any eligible employee over the term of the Stock Option Plan is
limited to 100,000 Shares. The Compensation Committee of the Cronos Board
will administer the Stock Option Plan, select participants from among
eligible employees, and determine the form, terms and conditions of awards.
MANAGEMENT PROPOSAL NO. 4
Management Proposal No. 4 is to approve Cronos' Non-Employee
Directors' Equity Plan (the "Directors' Equity Plan"). According to the
Management Proxy Statement, the Directors' Equity Plan was approved by the
Cronos Board on August 4, 1999. The stated purpose of the Directors' Equity
Plan is to attract, motivate and retain non-employee directors of
outstanding ability, and to foster a greater identity of interest between
such non-employee directors and Cronos shareholders. Only directors of
Cronos and of subsidiaries of Cronos who are not employees of Cronos or of
any of Cronos' subsidiaries may participate in the Directors' Equity Plan.
The Compensation Committee of the Cronos Board will administer the
Directors' Equity Plan.
A non-employee director will participate in the Directors' Equity
Plan in two ways: by electing to receive, in lieu of the cash compensation
otherwise payable to the non-employee director, an award of "director's
stock units," and through the receipt of non-qualified stock options to
acquire Shares. A total of 150,000 Shares will be available for issuance
under the Directors' Equity Plan, both to supply Shares for the settlement
of director's stock units into Cronos Common Stock and for issuance upon
the exercise of a director's options. First, a director may elect to reduce
all or part of the cash compensation otherwise payable for services to be
rendered by him or her as a director and to receive in lieu thereof
director's stock units. The number of director's stock units so elected
shall be equal to the compensation the non-employee director elects not to
receive, multiplied by 125%, with the resultant product divided by the fair
market value of Shares as of the date that the deferred compensation would
otherwise have been payable to the non-employee director. Second, a
non-employee director who is initially elected at an annual or special
meeting of shareholders, or appointed to the Cronos Board other than in
connection with an annual meeting shall receive, as of the date of such
initial election or appointment (or August 4, 1999 (the date the Directors'
Equity Plan was approved by the Cronos Board), if later), directors'
options to purchase 15,000 Shares.
MANAGEMENT PROPOSAL NO. 5
Management Proposal No. 5 is to approve the appointment of Deloitte &
Touche LLP ("Deloitte & Touche") as Cronos' independent auditors for the
fiscal year ending December 31, 1999. According to the Management Proxy
Statement, for the past three years, Moore Stephens, S.A.R.L. ("Moore
Stephens"), has served as Cronos' independent auditors. The Cronos Board
resolved to replace Moore Stephens on August 13, 1999, and appointed
Deloitte & Touche as Cronos' auditors, subject to shareholder approval, on
August 16, 1999.
MANAGEMENT PROPOSAL NO. 6
Management Proposal No. 6 is to approve the reports of Cronos'
independent auditors (Moore Stephens) and the Cronos Board on Cronos'
financial statements for the year ended December 31, 1998. The LCL requires
the Cronos Board to submit such reports to Cronos shareholders at the
Annual Meeting for their consideration and approval.
MANAGEMENT PROPOSAL NO. 7
Management Proposal No. 7 is to approve Cronos' consolidated and
unconsolidated financial statements for the year ended December 31, 1998.
The LCL requires the Cronos Board to submit such financial statements to
Cronos shareholders at the Annual Meeting for their consideration and
approval.
MANAGEMENT PROPOSAL NO. 8
Management Proposal No. 8 is to discharge the following directors of
Cronos from the execution of their mandate as directors for the year ended
December 31, 1998:
[To be supplied once such information is included in the
Management Proxy Statement]
The LCL requires the Cronos Board to submit such discharge proposal
to Cronos shareholders at the Annual Meeting for their consideration and
approval.
MANAGEMENT PROPOSAL NO. 9
Management Proposal No. 9 is to approve the allocation of the
profit/loss reported by Cronos for the year ended December 31, 1998. The
LCL requires the Cronos Board to submit such allocation to Cronos
shareholders at the Annual Meeting for their consideration and approval.
According to the Management Proxy Statement, the affirmative vote of
the holders of a majority of the Shares present in person or represented by
proxy and entitled to vote is required to approve each of the Management
Proposals at the Annual Meeting. Abstentions and broker non-votes are each
included in the determination of the number of Shares present and voting. A
broker non-vote occurs when a nominee holding Shares for a beneficial owner
does not vote on a particular proposal because the nominee does not have
discretionary voting power with respect to that item and has not received
instructions from the beneficial owner. Abstentions are counted in
tabulations of the votes cast on proposals presented to Cronos
shareholders, whereas broker non-votes are not counted for purposes of
determining whether a proposal has been approved.
The foregoing is a summary of certain provisions of each of the
Management Proposals. The summary is not a complete description of the
terms of the Management Proposals and is qualified in its entirety by
reference to the full text of each of the Management Proposals, as
contained in the Management Proxy Statement and incorporated herein by
reference. INTERPOOL RECOMMENDS THAT YOU VOTE IN FAVOR OF MANAGEMENT
PROPOSAL NO. 5 REGARDING THE APPOINTMENT OF DELOITTE & TOUCHE. INTERPOOL
MAKES NO RECOMMENDATION WITH RESPECT TO THE OTHER MANAGEMENT PROPOSALS.
The enclosed BLUE proxy card will be voted in accordance with your
instructions on such card. You may vote for, against, or abstain from
voting on, each of the Management Proposals by marking the proper box on
the BLUE proxy card. IF NO MARKING IS MADE WITH RESPECT TO MANAGEMENT
PROPOSAL NO. 5 (APPOINTMENT OF DELOITTE & TOUCHE AS INDEPENDENT AUDITORS),
YOU WILL BE DEEMED TO HAVE GIVEN A DIRECTION TO VOTE THE SHARES REPRESENTED
BY THE BLUE PROXY CARD FOR SUCH MANAGEMENT PROPOSAL. IF NO MARKING IS MADE
WITH RESPECT TO ANY OTHER MANAGEMENT PROPOSAL, YOU WILL BE DEEMED TO HAVE
GIVEN A DIRECTION TO ABSTAIN FROM VOTING THE SHARES REPRESENTED BY THE BLUE
PROXY CARD WITH RESPECT TO THE APPROVAL OF SUCH MANAGEMENT PROPOSAL.
VOTING INFORMATION
According to the Management Proxy Statement, as of [September 10,
1999, the Record Date], there were outstanding 9,158,378 Shares. Each share
of Cronos Common Stock entitles the holder thereof to one vote with respect
to each matter submitted to shareholders for their consideration and
approval at the Annual Meeting.
The enclosed BLUE proxy card will be voted in accordance with the
shareholder's instructions on such BLUE proxy card. Shareholders may vote
for Interpool's Nominees (Proposal No. 1 on the BLUE proxy card) and with
respect to the Management Proposals (Proposals No. 2, 3, 4, 5, 6, 7, 8 and
9 on the BLUE proxy card) by marking the proper box on the BLUE proxy card.
If no instructions are given, the BLUE proxy card will be voted FOR
Interpool's Nominees and Management Proposal No. 5 (appointment of Deloitte
& Touche as independent auditors) and will be deemed to be ABSTENTIONS with
respect to the other Management Proposals.
Whether or not you plan to attend the Annual Meeting, we urge you to
vote FOR Interpool's Nominees on the enclosed BLUE proxy card and
immediately mail it in the enclosed envelope. You may do this even if you
have already sent in a different proxy solicited by the Cronos Board. It is
your latest dated proxy that counts. Execution and delivery of a proxy by a
record holder of Shares will be presumed to be a proxy with respect to all
Shares held by such record holder unless the proxy specifies otherwise.
You may revoke your proxy at any time prior to the Annual Meeting
(whether such proxy was solicited by Interpool or Cronos), by submitting a
duly executed later dated proxy or by submitting a written notice of
revocation to the Company Secretary of Cronos prior to the commencement of
the Annual Meeting. In addition, if you attend the Annual Meeting in person
and vote by ballot at the Annual Meeting, you will cancel any proxy
previously given.
INTERPOOL STRONGLY RECOMMENDS A VOTE FOR THE ELECTION OF ITS NOMINEES
ON THE BLUE PROXY CARD.
INTERPOOL RECOMMENDS A VOTE IN FAVOR OF MANAGEMENT
PROPOSAL NO. 5 REGARDING THE APPOINTMENT OF DELOITTE & TOUCHE
AS INDEPENDENT AUDITORS. INTERPOOL MAKES NO RECOMMENDATION
WITH RESPECT TO THE OTHER MANAGEMENT PROPOSALS
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND RETURN THE
ENCLOSED BLUE PROXY CARD TODAY.
IF YOU ALREADY HAVE SENT A PROXY TO THE BOARD OF DIRECTORS OF CRONOS,
YOU MAY REVOKE THAT PROXY AND VOTE AGAINST THE PROPOSED CRONOS BOARD
NOMINEES BY SIGNING, DATING AND MAILING THE ENCLOSED BLUE PROXY CARD.
If you have any questions about the voting of Shares, please call the
firm assisting Interpool in the solicitation of proxies:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Call Collect: (212) 750-5833
Call Toll-Free: (888) 750-5834
SOLICITATION OF PROXIES; EXPENSES
Interpool will bear the entire expense of preparing, assembling,
printing and mailing this Proxy Statement and the BLUE proxy card and the
cost of soliciting proxies.
The total cost of this proxy solicitation (including fees of
attorneys, solicitors, accountants and public relations, advertising and
printing expenses but excluding any costs represented by salaries and wages
of regular employees of Interpool and CAI) for Interpool is estimated to be
approximately $[ ]. Approximately $[ ] of such costs have been paid to
date. To the extent legally permissible, Interpool will seek reimbursement
from Cronos for the costs of this solicitation. Interpool does not
currently intend to submit approval of such reimbursement to a vote of
shareholders of Cronos at a subsequent meeting of shareholders unless
required by applicable law.
Proxies will be solicited by mail, telephone, telefax, telegraph,
Internet, e-mail, newspapers and other publications of general distribution
and in person. Except as otherwise set forth in this Proxy Statement,
directors, officers and certain employees of Interpool and CAI and the
other participants listed on Schedule II hereto will assist in the
solicitation of proxies without any additional remuneration.
Interpool has retained Innisfree for solicitation and advisory
services in connection with the solicitation of proxies relating to the
Annual Meeting, for which Innisfree is to receive a fee of up to $[ ]
($[ ] of which has already been paid) plus reimbursement for reasonable
out-of-pocket expenses. Innisfree will utilize approximately 25 people to
solicit the shareholders of Cronos.
In addition, banks, brokerage houses and other custodians, nominees
and fiduciaries will be requested to forward proxy solicitation materials
to the beneficial owners of Cronos Common Stock that such institutions hold
of record and Interpool will reimburse such institutions for their
reasonable out-of- pocket expenses.
CERTAIN INFORMATION ABOUT INTERPOOL AND CAI
INTERPOOL
Interpool is a Delaware corporation with its principal executive
offices located at 211 College Road East, Princeton, New Jersey 08540. The
telephone number of Interpool at such location is (609) 452-8900.
Interpool's common stock is listed on The New York Stock Exchange ("NYSE")
under the symbol "IPX."
Interpool and its subsidiaries conduct business principally in a
single industry, the leasing of intermodal dry freight standard containers,
chassis and other transportation related equipment. Within this single
industry, Interpool has two reportable segments: container leasing and
domestic intermodal equipment. The container leasing segment specializes in
the leasing of intermodal dry freight standard containers, while the
domestic intermodal equipment segment specializes in the leasing of
intermodal container chassis and other equipment, namely freight rail cars
and intermodal trailers. Interpool leases its containers and chassis to
over 200 customers, including nearly all of the world's 20 largest
international container shipping lines.
Interpool is subject to the informational filing requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, is obligated to file reports, proxy statements and
other information with the Commission relating to its business, financial
condition and other matters. Information as of particular dates concerning
Interpool's directors and officers, their remuneration, options granted to
them, the principal holders of Interpool's securities and any material
interests of such persons in transactions with Interpool is required to be
disclosed in proxy statements distributed to Interpool's shareholders and
filed with the Commission. Such reports, proxy statements and other
information should be available for inspection at the public reference
facilities of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, and at the regional offices of the Commission located at Seven World
Trade Center, Suite 1300, New York, NY 10048 and 500 West Madison Street,
Suite 1400, Chicago, IL 60661 (call 1-800-SEC-0330 for hours). Copies of
such information should be obtainable by mail, upon payment of the
Commission's customary charges, by writing to the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549-6009. The
Commission also maintains an Internet website at http://www.sec.gov that
contains reports, proxy statements and other information filed
electronically by Interpool. Reports, proxy statements and other
information concerning Interpool should also be available at the offices of
the NYSE located at 20 Broad Street, New York, NY 10005.
CAI
CAI is a Nevada corporation with its principal offices located at
Three Embarcadero Center, Suite 1850, San Francisco, CA 94111-4003. The
telephone number of CAI at such location is (415) 788-0100.
Founded in 1989, CAI is engaged in the leasing of intermodal dry
freight standard containers. CAI leases its containers principally to
international container shipping lines located throughout the world.
CAI is a closely-held company and accordingly is not subject to any
filing requirements under the Exchange Act. Fifty percent of CAI's issued
and outstanding common stock is held by Interpool with the remainder held
by Hiromitsu Ogawa, CAI's Chairman and Chief Executive Officer.
OTHER INFORMATION
The information concerning Cronos contained herein has been taken
from, or based upon, publicly available documents on file with the
Commission and other publicly available information, and such information
is incorporated by reference herein and is qualified in its entirety
thereby. Interpool does not take any responsibility for the accuracy or
completeness of such information or for any failure by Cronos to disclose
events that may have occurred and may affect the significance or accuracy
of any such information.
Except for the election of directors and the Management Proposals,
Interpool is not aware of any other matter to be presented for
consideration at the Annual Meeting. However, if any other matter properly
comes before the Annual Meeting, the persons named as proxies by Interpool
will exercise their discretionary authority to vote on such matters in
accordance with their best judgment. If Interpool becomes aware a
sufficient time in advance of the Annual Meeting that Cronos' management
intends to present for shareholder vote at the Annual Meeting any matter
not included on the enclosed BLUE proxy card, Interpool intends to either
(i) refrain from voting on any such matter (in which case shareholders will
only be able to vote on such matter on the proxy card furnished by Cronos'
management) or (ii) revise the BLUE proxy card in order to include any such
additional matter thereon. Interpool will also furnish shareholders with
additional proxy materials describing any such additional matter. If
shareholders voted or vote on the original BLUE proxy card which does not
include such additional matter, Interpool will exercise its discretionary
authority with respect to such additional matter and will advise
shareholders as to how it will use such discretionary authority. If a
shareholder wishes to specify the manner in which his or her Shares are to
be voted on any such additional matter, the shareholder will have the
opportunity to vote on the revised BLUE proxy card. Submission of any
properly executed proxy card will revoke all prior proxy cards.
Reference is made to the Management Proxy Statement for information
concerning the procedures for submitting shareholder proposals for
consideration at the next Annual Meeting of Shareholders of Cronos.
Interpool, Inc.
Dated: September [ ], 1999
If you have any questions about giving your proxy or require
assistance, please contact the firm assisting Interpool in the solicitation
of proxies:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Call Collect: (212) 750-5833
Call Toll-Free: (888) 750-5834
SCHEDULE I
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND MANAGEMENT OF CRONOS
According to the Management Proxy Statement, as of [September 10],
1999, there were outstanding 9,158,378 Shares.
The following table sets forth certain information, which is taken
from the Management Proxy Statement regarding the beneficial ownership of
Shares outstanding as of July 31, 1999 by (1) any person known to Cronos to
beneficially own 5% or more of any class of voting securities of Cronos;
(2) each director and executive officer of Cronos; and (3) all directors
and executive officers of Cronos as a group. The Management Proxy Statement
states that, except as otherwise indicated, each shareholder listed below
has informed Cronos that such shareholder has (A) sole voting and
investment power with respect to such Shares, except to the extent that
authority is shared by spouses under applicable law, and (B) record and
beneficial ownership with respect to such Shares.
Beneficial Ownership
Name of Beneficial Owner As of July 31, 1999
------------------------ --------------------
Shares Percent
------ -------
Stefan M. Palatin (1)............................ 1,793,798 19.6%
Blavin Parties (2)............................... 1,589,136 17.2%
Central Wechsel - und Creditbank AG (3).......... 1,075,000 11.7%
Waveland Parties (4)............................. 1,039,500 11.4%
Rudolf Weissenberger (5)......................... 578,667 6.3%
Dennis J. Tietz (6).............................. 321,600 3.5%
Peter J. Younger (7)............................. 10,800 *
Ernst-Otto Nedelmann............................. -- --
Charles Tharp.................................... -- --
Maurice Taylor................................... -- --
All directors and executive officers as
a group (5 persons)............................ 332,400 3.6%
- --------------------
* Beneficial Ownership does note exceed 1% of the outstanding Shares
(1) According to the Form 3, dated April 16, 1999, of Hans-Ulrich Ming,
individually and as trustee for the benefit of Stefan M. Palatin,
these shares are held of record by Klamath Enterprises S.A.
("Klamath") , a Panamanian company of which Mr. Palatin is known to
be a beneficial owner.
(2) According to the Schedule 13G, dated July 2, 1999, of Blavin &
Company, Inc. and Paul W. Blavin, as principal for Blavin & Company,
Inc., these Shares are held of record by PWB Value Partners, L.P. and
advisory clients of Blavin & Company, Inc.
(3) According to the Schedule 13D Amendment No. 1, dated March 10, 1998,
of Central Wechsel -und Creditbank AG, these shares were held of
record by Enavest Holding S.A. ("Enavest") , a Panamanian company of
which Stefan M. Palatin is believed to be the beneficial owner.
However, pursuant to the terms of a pledge agreement between Central
Wechsel - und Creditbank AG and Enavest following the default of the
repayment of a loan by Enavest, these Shares are held of record by
Central Wechsel - und Creditbank AG.
(4) According to their Schedule 13D Amendment No. 2, dated July 8, 1999,
these Shares are held of record by Waveland Partners, L.P., Waveland
Capital Management, L.P., Clincher Capital Corporation, Waveland
Capital Management, LLC, Waveland Partners, Ltd., and Waveland
International, Ltd.
(5) According to his Form 3, dated December 21, 1998, Mr. Weissenberger
is the record holder of 12,000 Shares and indirectly holds 566,667
Shares by Lambert Business Inc.
(6) Mr. Tietz may purchase 21,600 Shares by exercising outstanding
options before November 24, 2001, and may purchase an additional
300,000 Shares by exercising outstanding options on or before
December 10, 2008.
(7) Mr. Younger may purchase 10,800 Shares by exercising outstanding
options on or before November 24, 2001.
SCHEDULE II
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS
OF INTERPOOL AND CAI AND OTHER PARTICIPANTS
The following table sets forth the name and title of persons who may
be deemed to be participants on behalf of Interpool in the solicitation of
proxies from the shareholders of Cronos. Unless otherwise indicated, the
principal business address of each director, executive officer, nominee,
employee or representative of Interpool is c/o Interpool, Inc., 211 College
Road East, Princeton, New Jersey 08540, and of CAI is c/o CAI, Three
Embarcadero Center, Suite 1850, San Francisco, California 94111.
DIRECTORS AND EXECUTIVE OFFICERS OF INTERPOOL
NAME POSITIONS
- ---- ---------
Martin Tuchman................. Chairman of the Board of Directors and
Chief Executive Officer
Raoul J. Witteveen............. President, Chief Operating Officer, Chief
Financial Officer and Director
Warren L. Serenbetz............ Director
Arthur L. Burns................ General Counsel, Secretary and Director
Ernst Baenziger................ Senior Vice President and Director of
Interpool Limited
Peter D. Halstead.............. Director
Joseph J. Whalen............... Director
Mitchell I. Gordon............. Director
William Geoghan................ Senior Vice President of Finance
DIRECTORS AND EXECUTIVE OFFICERS OF CAI
NAME POSITIONS
- ---- ---------
Hiromitsu Ogawa................ Chairman of the Board of Directors and
Chief Executive Officer
Masaaki Nishibori.............. Chief Financial Officer, Senior Vice
President and Director
Martin Tuchman................. Director
Raoul J. Witteveen............. Director
OTHER PARTICIPANTS
NAME POSITIONS
- ---- ---------
Nominees
Clifton H.W. Maloney..................... Nominee
c/o C.H.W. Maloney & Co. Incorporated
708 Third Avenue, Suite 2010
New York, NY 10017
Robert S. Malina......................... Nominee
Three Lincoln Center, 51B
New York, NY 10023
Richard Maisto........................... Nominee
c/o Morpheus Capital Advisors, LLC
14 Latimer Road
Santa Monica, CA 90402
Jolmer D. Gerritse....................... Nominee
c/o SNS Securities N.V.
Nieuwezijds Voorburgual 162
P.O. Box 235
100 EA Amsterdam, The Netherlands
Edmund P. Hennelly....................... Nominee
c/o Citroil Enterprises
21 Argyle Square
Babylon, New York 11702
SHARES HELD BY PARTICIPANTS
Each of Interpool and CAI has record ownership of 100 Shares. Each of
Interpool and CAI may be deemed to beneficially own the Shares held of
record by the other. Each of Interpool and CAI purchased 100 Shares on
September 17, 1999 for $3.75 per Share in an open market transaction.
Except for Masaaki Nishibori, Chief Financial Officer, Senior Vice
President and Director of CAI, who holds 5,500 shares of Cronos Common
Stock in his Individual Retirement Account, none of the participants listed
in this Schedule II own any shares of Cronos Common Stock. Except as set
forth in this Proxy Statement, to the best knowledge of Interpool, none of
the participants listed in this Schedule II has purchased or sold any
Shares within the past two years.
CERTAIN TRANSACTIONS
Except as described in this Schedule II or in the Proxy Statement,
none of the participants nor any of their respective affiliates or
associates (together, the "Participant Affiliates"), (i) directly or
indirectly beneficially owns any shares of Cronos Common Stock or any
securities of any parent or subsidiary of Cronos or (ii) has had any
relationship with Cronos in any capacity other than as a shareholder.
Furthermore, except as described in this Schedule II or in the Proxy
Statement, no Participant Affiliate is either a party to any transaction or
series of similar transactions since January 1, 1998, or has knowledge of
any currently proposed transaction or series of similar transactions, (i)
to which Cronos or any of its subsidiaries was or is to be a party, (ii) in
which the amount involved exceeds $60,000, and (iii) in which any
Participant Affiliate had, or will have, a direct or indirect material
interest.
No Participant Affiliate has entered into any agreement, arrangement
or understanding with any person respecting any future employment by Cronos
or its affiliates or any future transactions to which Cronos or any of its
affiliates will or may be a party. Except as described in this Schedule II
or in the Proxy Statement, and other than agreements by the Nominees to
serve as directors of Cronos, if elected, there are no contracts,
agreements, arrangements or understandings by any Participant Affiliate
within the past year with any person with respect to Cronos Common Stock or
any other Cronos securities.
PRELIMINARY COPY - SUBJECT TO COMPLETION
THE CRONOS GROUP
THIS PROXY IS SOLICITED ON BEHALF OF INTERPOOL, INC.
IN OPPOSITION TO THE SOLICITATION BY THE BOARD OF DIRECTORS OF
THE CRONOS GROUP FOR THE ANNUAL MEETING TO BE HELD ON OCTOBER 26, 1999.
Martin Tuchman, Raoul J. Witteveen and Arthur L. Burns, or any of
them, each with full power of substitution, are hereby authorized to vote
the undersigned's shares of common stock, par value $2.00 per share, of The
Cronos Group ("Cronos") at the Annual Meeting of Shareholders of Cronos, to
be held on October 26, 1999, at 10:00 a.m., local time, at the Hotel Le
Royal, 12 Boulevard Royal, Luxembourg, and at any and all adjournments,
postponements, continuations or reschedulings thereof (the "Annual
Meeting"), upon the matters set forth in the Proxy Statement furnished by
Interpool (the "Interpool Proxy Statement") and upon such other matters as
may properly come before the Annual Meeting, voting as specified on this
card with respect to the matters set forth in the Interpool Proxy
Statement, and voting in the discretion of the above-named persons on such
other matters as may properly come before the Annual Meeting.
PLEASE SIGN AND DATE THE REVERSE SIDE OF THIS PROXY CARD AND PROMPTLY
RETURN IT IN THE ENCLOSED ENVELOPE.
(continued on reverse side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR"
PROPOSALS 1 AND 5, AND WILL "ABSTAIN" WITH RESPECT TO PROPOSALS 2, 3, 4, 6,
7, 8 AND 9.
INTERPOOL RECOMMENDS THAT YOU VOTE FOR ITEMS 1 AND 5 BELOW AND MAKES
NO RECOMMENDATION WITH RESPECT TO ITEMS 2, 3, 4, 6, 7, 8 AND 9 BELOW.
(1) The election of the following five persons as directors of
Cronos to hold office until their successors are duly elected
and qualified: Clifton H.W. Maloney, for the term expiring at
the Annual Meeting in 2000; Richard Maisto and Edmund P.
Hennelly, for the terms expiring at the Annual Meeting in 2001;
and Robert S. Malina and Jolmer D. Gerritse, for the terms
expiring at the Annual Meeting in 2002 (the "Nominees").
/ / FOR
/ / WITHHOLD
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEES, MARK FOR ABOVE AND WRITE THE NAME OF EACH SUCH
PERSON WITH RESPECT TO WHOM YOU WISH TO WITHHOLD
AUTHORITY TO VOTE IN THE FOLLOWING SPACE:
(2) Grant of a Stock Option to Peter J. Younger, Chief Financial
Officer
/ / FOR
/ / AGAINST
/ / ABSTAIN
(3) Cronos' 1999 Stock Option Plan
/ / FOR
/ / AGAINST
/ / ABSTAIN
(4) Cronos' Non-Employee Directors' Equity Plan
/ / FOR
/ / AGAINST
/ / ABSTAIN
(5) Appointment of Deloitte & Touche LLP as the Independent
Auditors for Fiscal Year 1999 and Authorize the Directors to
Fix the Auditor's Remuneration
/ / FOR
/ / AGAINST
/ / ABSTAIN
(6) Approval of Reports of the Independent Auditor and of the
Cronos Board
/ / FOR
/ / AGAINST
/ / ABSTAIN
(7) Approval of Cronos' Consolidated and Unconsolidated Financial
Statements for the Year
Ended December 31, 1998
/ / FOR
/ / AGAINST
/ / ABSTAIN
(8) Discharge the Following Members of the Cronos Board Pursuant to
Article 74 of the Company Law (10 August 1915) for the Execution
of Their Mandate for the Year Ended December 31, 1998: [To Be
Supplied]
/ / FOR
/ / AGAINST
/ / ABSTAIN
(9) Approval of the Allocation of the Profit/Loss Reported by Cronos
for the year Ended December 31, 1998
/ / FOR
/ / AGAINST
/ / ABSTAIN
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED,
POSTAGE-PREPAID, BUSINESS REPLY ENVELOPE. NO ADDITIONAL POSTAGE IS
NECESSARY IF SUCH ENVELOPE IS MAILED IN THE UNITED STATES.
The undersigned hereby revokes all proxies heretofore given by the
undersigned to vote at the Annual Meeting.
SIGNATURE:___________________________________________ DATED __________, 1999
SIGNATURE (if held jointly):_________________________ DATED __________, 1999
Please sign your name exactly as it appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator, trustee or
guardian, please give your full title as such.
If signing on behalf of a corporation, please sign in full corporate name
by the president or other authorized officer(s). If signing on behalf of a
partnership, please sign in full partnership name by authorized person(s).
