Exhibit 99.5
PALEX, INC.
6829 Flintrock Road
Houston, Texas 77040
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ELECTION FORM / LETTER OF TRANSMITTAL
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[NAME AND ADDRESS LABEL]
Dear PalEx Stockholder:
We are sending you this election form/letter of transmittal because PalEx,
Inc. has signed a merger agreement with IFCO Systems N.V. and the other parties
named in the merger agreement. As more fully described in the proxy
statement/prospectus that has separately been sent to you in connection with
the proposed merger, if the PalEx stockholders approve and adopt the merger
agreement, PalEx will be merged with and into Silver Oak Acquisition Corp., a
newly formed, wholly owned subsidiary of IFCO Systems. Silver Oak will survive
the merger as a wholly owned subsidiary of IFCO Systems and will change its
name to "PalEx, Inc." You should read carefully the proxy statement/prospectus.
You hold shares of PalEx common stock. If we complete the merger, each of
your shares of PalEx common stock will be exchanged, at your election, into one
of the following:
. $9.00 in cash; or
. the number of IFCO Systems ordinary shares calculated by dividing $9.00
by the IPO price of the IFCO Systems ordinary shares expressed in U.S.
dollars; or
. a combination of cash and IFCO Systems ordinary shares.
This form offers you a choice of electing to receive cash or IFCO Systems
ordinary shares, or some of each, for your PalEx common stock.
You should make an election on this form, but even if you do so, we may not
be able to give you what you elect. If we receive too many elections for cash
or stock, we may have to allocate cash and stock to you in different
proportions than you elect. The total merger consideration for all of the PalEx
common stock is limited as follows:
. not less than 40% and not more than 49% of the PalEx shares may be
exchanged for cash; and
. not more than 60% and not less than 51% of the PalEx shares may be
exchanged for IFCO Systems ordinary shares.
For further information, see "The Merger Agreement--Conversion of PalEx
Shares" on pages 57-61 of the proxy statement/prospectus.
The holders of exchangeable shares of SMG Corporation, PalEx's wholly owned
Canadian subsidiary, are subject to the same election provisions as PalEx
stockholders. Subject to amendment of SMG's articles of amalgamation and of the
support agreement with the holders, a holder of SMG exchangeable shares after
the merger will be entitled to exchange its SMG exchangeable shares for cash
and/or IFCO Systems ordinary shares pursuant to the procedures set forth in
this election form/letter of transmittal.
Each PalEx stockholder and each SMG holder should complete this election
form/letter of transmittal and return it along with, for the PalEx
stockholders, the stock certificates, a book entry transfer of shares, or a
guaranteed delivery for the shares covered by the election form/letter of
transmittal to Deutsche Bank AG, IFCO Systems' exchange agent.
A completed election form/letter of transmittal must be received by the
exchange agent no later than 5:00 p.m. New York time on March 1, 2000. If the
exchange agent does not receive for a holder by the election deadline a
properly completed and signed election form/letter of transmittal and, for the
PalEx stockholders, stock certificates, a book entry transfer of shares, or a
guaranteed delivery for the shares of PalEx common stock covered by this
election form/letter of transmittal, then that holder will be deemed not to
have made an election and will receive merger consideration pursuant to the
adjustment calculations made by the exchange agent.
If for any reason the merger is not completed, this election form will be
void and of no effect. Certificate(s) for shares of PalEx common stock
previously delivered to the exchange agent will be returned promptly. The
merger is expected to be completed on or before March 8, 2000.
Please read carefully the accompanying general instructions beginning on page
13, complete the information as required on pages 4-12, and return this
election form/letter of transmittal, along with, for the PalEx stockholders,
all of your PalEx stock certificates, book entry transfer of shares, or
guarantee of delivery of shares in the enclosed envelope to the exchange agent
no later than 5:00 p.m. New York time on March 1, 2000 at the following
address:
Deutsche Bank AG
c/o BT Services Tennessee, Inc.
Corporate Trust Reorganization Unit
P.O. Box 292737
Nashville, Tennessee 37229-2737
Delivery of this election form/ letter of transmittal to an address other
than as set forth above will not constitute a valid delivery. You must sign the
election form/letter of transmittal where requested.
2
INSTRUCTIONS FOR STEP 1
IDENTIFY YOUR SHARES AND MAKE YOUR ELECTION
Share Identification. You must identify the shares of PalEx common stock (or
SMG exchangeable shares) that you own.
In the spaces provided under the column entitled "Name(s) and Address(es) of
Registered Holder(s)," print the name(s) and address(es) of the registered
holder(s). In the spaces provided under the column entitled "Certificate
Number," insert the stock certificate number for each stock certificate you
hold. If you do not hold stock certificate(s), please indicate in the
"Certificate Number" column. In the spaces provided under the column entitled
"Number of Shares Represented By," insert the number of shares represented by
the corresponding stock certificate(s) or held by book-entry. At the bottom of
the "Number of Shares Represented By" column, please insert the total number of
PalEx shares you own.
Election. Choose the consideration you would like to receive. The sum of
your elections must be equal to the total number of PalEx shares (or SMG
exchangeable shares) you hold.
All-Cash Election. You may choose to make an all-cash election with respect
to all of your shares of PalEx common stock (or SMG exchangeable shares) and
receive $9.00 in cash for each share of PalEx common stock (or upon exchange
after the merger for each SMG exchangeable share). To make an all-cash
election, you should insert the total number of PalEx shares you own in the
space provided under the column entitled "Cash Election."
*or*
All-Stock Election. You may choose to make an all-stock election with
respect to all of your shares of PalEx common stock (or SMG exchangeable
shares) and receive the number of IFCO Systems ordinary shares calculated by
dividing $9.00 by the IPO price of the IFCO Systems ordinary shares expressed
in U.S. dollars for each share of PalEx common stock (or upon exchange after
the merger for each SMG exchangeable share). To make an all-stock election, you
should insert the total number of PalEx shares you own in the space provided
under the column entitled "Stock Election."
*or*
Combination Election. You may choose to make a combination election with
respect to all of your shares of PalEx common stock (or SMG exchangeable
shares) and receive (or receive upon exchange after the merger for SMG
exchangeable shares) a combination of (1) $9.00 in cash for each share for
which you elect to receive cash and (2) the number of IFCO Systems ordinary
shares calculated by dividing $9.00 by the IPO price expressed in U.S. dollars
for each share for which you elect to receive stock. To make a combination
election, you should insert the number of PalEx shares you would like to
exchange to cash in the space provided under the column entitled "Cash
Election" and insert the number of PalEx shares you would like to convert to
IFCO Systems ordinary shares in the space provided under the column entitled
"Stock Election."
*or*
Non-Election. You may choose to make an affirmative non-election with
respect to all of your shares of PalEx common stock (or SMG exchangeable
shares). In the event you make an affirmative non-election or fail to properly
submit this form, you will receive cash and/or stock pursuant to the adjustment
provisions of the merger agreement as calculated by the exchange agent. To make
a non-election, you should insert the total number of PalEx shares you own in
the space provided under the column entitled "Non-Election."
Note: Please review carefully pages 57-61 of the proxy statement/prospectus
for an explanation of the conversion of the PalEx shares. As explained in the
proxy statement/prospectus, the total merger consideration for all shares of
PalEx common stock is limited as follows: (1) not less than 40% and not more
than 49% of the shares may be exchanged for cash; and (2) not more than 60% and
not less than 51% of the shares may be exchanged for IFCO Systems ordinary
shares. The elections by holders of SMG exchangeable shares will be included in
the calculation of the limits on the composition of the total merger
consideration.
Once completed, go to Step 2.
3
STEP 1
IDENTIFY YOUR SHARES AND MAKE YOUR ELECTION
ame(s)Nand Addresses of Number of Shares
Registered Holder(s) Certificate Number* Represented By Cash Election Stock Election Non-Election
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Total Shares:
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* If you do not hold PalEx stock certificates, please indicate and a book-
entry transfer will be made for you.
NOTE: YOUR ELECTION MAY BE ADJUSTED BY THE EXCHANGE AGENT IF YOU ELECT TO
EXCHANGE (1) MORE THAN 49% OF YOUR PALEX SHARES FOR CASH OR (2) MORE THAN
60% OF YOUR PALEX SHARES FOR STOCK.
For PalEx stockholders, your election will be valid only if accompanied by
your PalEx stock certificate(s), a book entry transfer of shares to the
exchange agent (check the box below), or a guaranteed delivery (check the box
below).
[_]CHECK HERE IF YOUR PALEX SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s) ___________________________________________________
Window Ticket Number (if any): _________________________________________________
[_]CHECK HERE IF YOUR PALEX SHARES ARE BEING DELIVERED BY BOOK ENTRY TRANSFER
TO THE EXCHANGE AGENT'S ACCOUNT AND COMPLETE THE FOLLOWING:
Name of Electing Institution: __________________________________________________
The Depository Trust Company Account Number: ___________________________________
Transaction Code Number: _______________________________________________________
4
INSTRUCTION FOR STEP 2A
LETTER OF TRANSMITTAL
Regardless of your election in Step 1, if you are a PalEx stockholder you
must send all of your PalEx stock certificates to the exchange agent with the
following letter of transmittal. See General Instruction D.1. If you do not
hold stock certificates, please indicate on the previous page and a book-entry
transfer will be made for you. Holders of SMG exchangeable shares should not
complete the letter of transmittal or send any share certificates.
Please read and sign the letter of transmittal on the following page.
If you have all of the stock certificates representing your shares of PalEx
common stock and do not have special payment or delivery instructions as set
forth below, sign the letter of transmittal and go to Step 3. See General
Instruction D.2. regarding the proper form of signatures.
If you have lost any or all of the stock certificates representing your
shares of PalEx common stock, in addition to signing the letter of transmittal
and sending it to the exchange agent together with any stock certificates you
do have as described above, you must complete Step 2B with respect to any
certificates you have lost.
If you want the new IFCO Systems certificates being issued to you pursuant to
the merger to be registered, and/or you want the cash being paid to you
pursuant to the merger agreement to be payable, to someone other than the
person or entity listed on your PalEx stock certificates, you must complete and
sign the "Special Payment Instructions" box on page 7. If you transferred any
of your shares to someone else after January 21, 2000, you must sign the
"Special Payment Instructions" box on page 7.
If you want the new IFCO Systems certificates and/or the cash being issued or
paid to you pursuant to the merger to be registered or payable to you, but sent
to someone else, you must complete and sign the "Special Delivery Instructions"
box on page 7.
If you fill out either the "Special Payment Instructions" box or the "Special
Delivery Instructions" box, you must have your signature(s) medallion
guaranteed by an eligible institution. See General Instruction D.4.
If your cash payment exceeds $500,000 and you would like it to be sent to you
by wire transfer rather than by check, you must complete and sign the "Wiring
Instructions" box on page 7. Please verify your wiring instructions before
completing the "Wiring Instructions" box. If you provide incorrect wiring
instructions, IFCO Systems will have the right to send your money to you by
check.
If the PalEx stock certificates are not available prior to the election
deadline, a Guarantee of Delivery may be completed by an eligible institution
and your election will be valid if the stock certificates, together with a copy
of the completed election form/letter of transmittal, are received by the
exchange agent within three trading days after the election deadline .
The exchange agent will issue you a single check and/or a single book entry
advice representing IFCO Systems ordinary shares. If you would prefer to
receive a stock certificates, please check the box in the "Receipt of
Certificates" section below. If you request a stock certificate, the exchange
agent will issue a single certificate representing the IFCO Systems ordinary
shares. However, if for tax purposes or otherwise you wish to have the new
certificates issued in particular denominations, please provide explicit
instructions to the exchange agent.
After you have completed the above, go to Step 3.
5
STEP 2A
LETTER OF TRANSMITTAL
Deutsche Bank AG, Exchange Agent:
In connection with the merger, the undersigned hereby submits the stock
certificate(s) representing the undersigned's shares of PalEx, Inc. common
stock to, or hereby transfers ownership of such stock certificate(s) by book-
entry transfer to the account of, Deutsche Bank AG, the exchange agent
designated by IFCO Systems N.V. pursuant to the merger agreement by and among
IFCO Systems, PalEx, and the other parties named therein, or its replacement or
successor, and instructs the exchange agent to deliver to the undersigned, in
exchange for the undersigned's shares of PalEx common stock, cash and/or IFCO
Systems ordinary shares pursuant to the undersigned's election as set forth on
the election form enclosed with this letter of transmittal. The undersigned
understands that the undersigned's election may be adjusted by the exchange
agent if the undersigned elected to exchange (1) more than 49% of the
undersigned's PalEx shares for cash or (2) more than 60% of the undersigned's
PalEx shares for IFCO Systems ordinary shares.
By delivery of this letter of transmittal to the exchange agent, the
undersigned hereby forever waives the undersigned's right to dissent under
applicable Delaware law and withdraws all written objections to the merger
and/or demands for appraisal, if any, with respect to the shares of PalEx
common stock owned by the undersigned.
The undersigned represents and warrants that the undersigned has full power
and authority to surrender the stock certificate(s) surrendered herewith or
transferred in book-entry form, or covered by a guarantee of delivery, free and
clear of all liens, claims, and encumbrances. The undersigned will, upon
request, execute and deliver any additional documents reasonably deemed by the
exchange agent or IFCO Systems to be appropriate or necessary to complete the
sale, assignment, or transfer of the PalEx shares. All authority conferred or
agreed to be conferred in this letter of transmittal shall be binding upon the
successors, assigns, heirs, executors, administrators, and legal
representatives of the undersigned and shall not be affected by, and shall
survive, the death or incapacity of the undersigned.
Unless otherwise indicated under "Special Payment Instructions" on the
following page, please issue any certificate for IFCO Systems ordinary shares
and/or any check payable (or wire transfer of funds payable) in exchange for
the undersigned's shares of PalEx common stock in the name of the registered
holder(s) of such PalEx common stock. Similarly, unless otherwise indicated
under "Special Delivery Instructions" and/or "Wiring Instructions" on the
following page, please mail any certificate for IFCO Systems ordinary shares
and/or any check payable in exchange for the undersigned's shares of PalEx
common stock to the registered holder(s) of the PalEx common stock at the
address or addresses shown below.
REGISTERED PALEX STOCKHOLDER(S) SIGN HERE
- -------------------------------------- --------------------------------------
Signature of owner(s) Signature of owner(s)
Print Name: __________________________ Print Name: __________________________
- -------------------------------------- --------------------------------------
Social Security or other Tax ID Number Social Security or other Tax ID
Address: _____________________________ Number
- -------------------------------------- Address: _____________________________
- -------------------------------------- --------------------------------------
- -------------------------------------- --------------------------------------
Date: _________________________ , 2000 --------------------------------------
Date: _________________________ , 2000
6
SPECIAL PAYMENT INSTRUCTIONS
(To be completed ONLY if you want the new IFCO Systems certificates being
issued to you pursuant to the merger to be registered, and/or you want the
cash being paid to you pursuant to the merger agreement to be payable, to
someone other than the person or entity listed on your PalEx stock
certificates.)
Register my IFCO Systems ordinary shares, and make payment to, the following:
Name:_______________________________________________________________________
(Please type or print)
Address:____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(include Zip Code)
SPECIAL DELIVERY INSTRUCTIONS
(To be completed ONLY if you want the new IFCO Systems certificates and/or
the cash being issued or paid to you pursuant to the merger to be registered
or payable to you, but sent to someone else.)
Mail or deliver my IFCO Systems ordinary shares, and send payment to, the
following:
Name:_______________________________________________________________________
(Please type or print)
Address:____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(include Zip Code)
WIRING INSTRUCTIONS
Provided I am to receive at least $500,000 in cash, I would like to receive
all of the cash to be paid to me in connection with the merger to be sent by
wire transfer, pursuant to the following wiring instructions in lieu of
delivery of a check:
Name of Financial Institution:______________________________________________
Financial Institution's ABA No.:____________________________________________
Name of Account:____________________________________________________________
Account No.:________________________________________________________________
7
SIGNATURE GUARANTEE
(In the event that the check and/or certificate representing IFCO Systems
ordinary shares is to be issued in exactly the name of the record holder(s)
of the PalEx common stock, no guarantee of the signature on this election
form/letter of transmittal is required)
If you have filled out either the "Special Payment Instructions" box, the
"Special Delivery Instructions" box or the "Guarantee of Delivery" box you
must have your signature(s) medallion guaranteed by an eligible
institution.
Name of Guarantor:_____________________________
Signature(s) Guaranteed:_______________________
______________________________
Date:________, 2000
Apply Signature Medallion:
GUARANTEE OF DELIVERY
The undersigned, a member firm of a registered national securities
exchange, a member of the NASD, Inc., or a commercial bank or trust company
in the United States, hereby guarantees to deliver to the exchange agent
either all of the certificate(s) for PalEx common stock to which this
election form/letter of transmittal relates, or such certificates as are
identified below, duly endorsed in blank or otherwise in form acceptable
for transfer, no later than 5:00 p.m. New York time, on the third trading
day after the election deadline. If you complete this guarantee of
delivery, you will need a signature guarantee by an eligible institution.
The undersigned acknowledges that it must deliver the PalEx shares
covered by this election form and letter of transmittal to the exchange
agent within the time period set forth above and that failure to do so
could result in financial loss to the undersigned.
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Dated Print Firm Name
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Certificate Number(s) Authorized Signature
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Number of PalEx shares Address
If the PalEx shares will be ------------------------------------
delivered by book-entry transfer,
provide the Depository Trust
Company account number: ____________
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Telephone number
RECEIPT OF CERTIFICATES
Unless you check the box below, you will receive book-entry IFCO Systems
ordinary shares.
[_]Check here if you would like certificate(s) for your IFCO Systems
ordinary shares.
8
INSTRUCTION FOR STEP 2B
CERTIFY IF CERTIFICATE(S) ARE LOST
If you are unable to locate some or all of the stock certificates
representing your shares of PalEx common stock, you must complete the
certification on the following page. Your signature must be notarized.
Please see General Instruction D.2. regarding proper signatures.
After you have completed the above, go to Step 3.
9
STEP 2B--CERTIFY IF CERTIFICATE(S) ARE LOST
The certificate(s) representing the following shares of PalEx, Inc. common
stock has/have been lost, stolen, seized, or destroyed, at a time unknown to
me:
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Certificate Number Shares
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-----------------------------------------
-----------------------------------------
-----------------------------------------
I hereby certify the following:
(1) I have made or caused to be made a diligent search for such stock
certificate(s) and have been unable to find or recover it/them. I have not
sold, assigned, pledged, transferred, deposited under any agreement, or
hypothecated the shares of PalEx common stock represented by such stock
certificate(s), or any interest therein, or assigned any power of attorney
or other authorization respecting the same which is now outstanding and in
force, or otherwise disposed of such stock certificate(s); and no person,
firm, corporation, agency, or government, other than me, has or has
asserted any right, title, claim, equity, or interest in, to, or respecting
such shares of PalEx common stock.
(2) Please issue a replacement stock certificate(s). In consideration of
the issuance of a replacement certificate(s), I hereby agree to indemnify
and hold harmless IFCO Systems N.V. and any person, firm, or corporation
now or hereafter acting as IFCO Systems' transfer agent, registrar,
trustee, depository, redemption, fiscal, or paying agent, or in any other
capacity, and also any successors in any such capacities, and their
respective heirs, successors, and assigns, from and against any and all
liability, loss, damage, and expense in connection with, or arising out of,
their compliance with my request herein.
(3) I also agree, in consideration of compliance with the foregoing
request, immediately to surrender to the IFCO Systems the lost stock
certificate(s) should it/they hereafter come into my possession or control.
SIGNATURE _______________________________________________ DATE , 2000
SIGNATURE _______________________________________________ DATE , 2000
SIGNATURE _______________________________________________ DATE , 2000
STATE OF (S)
(S)
COUNTY OF (S)
I, , a Notary Public, do hereby certify that on the day
of 2000, personally appeared before me , known to me to be the
persons whose name(s) is/are subscribed to the foregoing instrument, who, being
by me first duly sworn, declared that the statements contained therein are true
and that he/she/they signed said instrument for the purposes, in the capacity,
and for consideration therein expressed.
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[Notary: Please modify if necessary to conform to your state law or attach an
alternative form.]
10
INSTRUCTION FOR STEP 3
COMPLETE SUBSTITUTE FORM W-9
PalEx stockholders must complete the following Substitute Form W-9 to avoid
having 31% of your payment withheld for federal income tax purposes as set
forth in General Instruction D.6. to this election form.
Please do the following:
(1) write your social security number (or employer identification number
for entities) in the top right box of the Substitute Form W-9;
(2) print your name and address in the space provided;
(3) check the box next to "Individual/Sole Proprietor," "Corporation,"
"Partnership," or "Other" (and, if other, write in the type of entity); and
(4) sign the "Certification Instructions" box at the bottom of the
Substitute Form W-9.
If you do not yet have a Taxpayer Identification Number, please check the box
in "Part 3," sign in the "Certification Instructions" box, and, in addition,
sign the "Certification of Payee Awaiting Taxpayer Identification Number" box
at the bottom of the page.
Please see General Instruction D.6. for information on this Form W-9 and
General Instruction D.2. regarding proper signatures. Additional Forms W-9 are
attached for your use, if necessary, as Exhibit A to this election form/letter
of transmittal.
11
STEP 3--COMPLETE SUBSTITUTE FORM W-9
PAYER: DEUTSCHE BANK AG
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Part 1--PLEASE PROVIDE YOUR Social Security
SUBSTITUTE TIN IN THE BOX AT RIGHT AND Number OR Employer
Form W-9 CERTIFY BY SIGNING BELOW Identification Number
----------------------
Department of
the Treasury --------------------------------------------------------
Internal Part 3--Awaiting
Revenue Part 2--CERTIFICATION--Under TIN [_]
Service penalties of perjury, I certify
that:
If you checked
(1) The number shown on this this box, please
form is my correct Taxpayer complete the
Identification Number (or I "Certificate of
am waiting for a number to Payee Awaiting
be issued to me), and Taxpayer Identi-
fication Number"
below.
Payer's Request
for Taxpayer
Identification
Number (TIN)
---------------
(Print name) (2) I am not subject to backup
withholding either because I
have not been notified by the
IRS that I am subject to
backup withholding as a
result of a failure to report
all interests or dividends,
or the IRS has notified me
that I am no longer subject
to backup withholding.
--------------- --------------------------------------------------------
(Address)
CERTIFICATION INSTRUCTIONS--You must cross out item
(2) above if you have been notified by the IRS that
you are subject to backup withholding because of
under-reporting interest or dividends on your tax
return. However, if after being notified by the IRS
that you were subject to backup withholding, you
received another notification from the IRS that you
are no longer subject to backup withholding, do not
cross out item (2).
---------------
Check the box that
applies:
[_Individual/Sole]
Proprietor
[_Corporation]
[_Partnership]
[_Other: __________]
(specify) SIGNATURE ____________________ DATE , 2000
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE MERGER.
PLEASE REVIEW GENERAL INSTRUCTION D.8. FOR ADDITIONAL DETAILS.
IF YOU ARE AWAITING A TAXPAYER IDENTIFFICATION NUMBER, YOU MUST COMPLETE
THE FOLLOWING CERTIFICATE AND CHECK THE BOX IN PART 3 OF SUBSTITUTE FORM
W-9.
CERTIFICATION OF PAYEE AWAITING TAXPAYER IDENTIFICATION NUMBER
(To be completed ONLY IF box in Part 3 of W-9 is checked)
I certify, under penalties of perjury, that a Taxpayer Identification Number
has not been issued to me, and that I mailed or delivered an application to
receive a Taxpayer Identification Number to the appropriate IRS Center or
Social Security Administration Office (or I intend to mail or deliver an
application in the near future). I understand that if I do not provide a
Taxpayer Identification Number to the payer, 31% of all payments made to me
pursuant to the merger shall be retained until I provide a Tax Identification
Number to the payor and that, if I do not provide my Taxpayer Identification
Number within 60 days, such retained amounts shall be remitted to the IRS as
backup withholding and 31% of all reportable payments made to me thereafter
will be withheld and remitted to the IRS until I provide a Taxpayer
Identification Number.
SIGNATURE ____________________________________ DATE , 2000
12
** GENERAL INSTRUCTIONS **
A. Special Conditions.
1. Time in which to elect. To be effective, a completed election form/letter
of transmittal and, for PalEx stockholders, your stock certificates, a book
entry transfer of shares, or a guaranteed delivery for the shares covered by
the election form/letter of transmittal, must be received by the exchange
agent, at the address set forth on page 2, no later than 5:00 p.m. New York
time on March 1, 2000 (the "Election Date"). If the merger is approved and
thereafter completed, and if the exchange agent has not received a properly
completed election form/letter of transmittal prior to the Election Date, you
will receive merger consideration pursuant to the adjustment calculations made
by the exchange agent, as more fully described in the proxy
statement/prospectus. See General Instruction C.
2. Revocation of election. An election may be revoked by the person who
submitted the election form/letter of transmittal to the exchange agent by
written notice to the exchange agent prior to the Election Date. A holder may
submit a new election form at the time it revokes an earlier election or at any
time after revoking an earlier election but before the Election Date. If a new
election is not made, the holder will be deemed not to have made an election,
and exchange agent will retain the stock certificate(s) tendered with the
revoked election form until the time the shares are exchanged upon completion
of the merger. All election forms will automatically be revoked if the merger
agreement is terminated. If the merger agreement is terminated, the stock
certificates tendered will be promptly returned to you.
B. Election Procedures.
A description of the election procedures is set forth in the proxy
statement/prospectus under "The Merger Agreement--the Merger" and "--Conversion
of PalEx Shares" and is contained in the merger agreement. All elections are
subject to compliance with such procedures. In connection with making any
election, you should read carefully, among other matters, the information
contained in the proxy statement/prospectus under "The Merger--U.S. Federal
Income Tax Consequences" and "--Netherlands Tax Consequences." See also "Risk
Factors--The merger may not be tax- free to PalEx or PalEx stockholders" in the
proxy statement/prospectus for a discussion of the possibility that the merger
may be a taxable transaction.
As a result of the election procedures, you may receive IFCO Systems ordinary
shares or cash in amounts that vary from your election in Step 1. You will not
be able to change the number of shares or the amount of cash allocated to you
pursuant to the election procedures.
C. Receipt of Shares or Cash.
Promptly after the effective time of the merger, IFCO Systems will instruct
the exchange agent to mail certificate(s) for your shares of IFCO Systems
ordinary shares and/or cash payments by check to you with respect to each share
of PalEx common stock (if you complete the "Wiring Instructions" in Step 2A of
this election form and you are to receive at least $500,000, all of the cash
will be sent to you by wire transfer). If you fail to submit this properly
completed election form/letter of transmittal and stock certificates, a book
entry transfer of shares, or a guaranteed delivery for the PalEx shares covered
by the election form/letter of transmittal by the Election Date as set forth
above, you will receive merger consideration pursuant to the adjustment
calculations made by the exchange agent pursuant to the merger agreement, as
more fully described in the proxy statement/prospectus, as soon as practicable
after the certificate(s) representing such PalEx shares have been submitted. No
fractional IFCO Systems ordinary shares will be issued in the merger. Instead,
each PalEx stockholder that would otherwise be entitled to receive a fractional
share will receive an amount in cash equal to the value of an IFCO Systems
ordinary share multiplied by the fraction. The value of an IFCO Systems
ordinary share for this calculation will be the IPO price.
D. General.
1. Execution and delivery. This election form/letter of transmittal must be
properly filled in, dated, and signed in all applicable places, and must be
delivered (together with all of the other required materials) to the exchange
agent at the address as set forth on page 2.
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The method of delivery of all documents is at your option and risk, but if
sent by mail, registered mail, return receipt requested, and properly insured,
using the enclosed envelope, is suggested.
2. Signatures. The signature (or signatures, in the case of certificates
owned by two or more joint holders) on this election form/letter of transmittal
should correspond exactly with the name(s) as written on the face of the
certificate(s) submitted (or in the case of a holder of SMG exchangeable
shares, on your certificate representing your SMG exchangeable shares) unless
the shares of PalEx common stock (or SMG exchangeable shares) described on this
election form have been assigned by the registered holder(s), in which event
this election form should be signed in exactly the same form as the name of the
last transferee indicated on the transfers attached to or endorsed on the
certificates.
If this election form is signed by a person or persons other than the
registered holder(s) of the certificates, the certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered owner(s) appear on the certificates.
If this election form or any stock certificate(s) or stock power(s) is signed
by a trustee, executor, administrator, guardian, officer of a corporation,
attorney-in-fact, or any other person acting in a representative or fiduciary
capacity, the person signing must give such person's full title in such
capacity.
3. New certificates and checks in same name. If you are receiving any IFCO
Systems ordinary shares, the stock certificate(s) representing such IFCO
Systems ordinary shares and/or any check(s) in respect of shares of PalEx
common stock shall be registered in, or payable to the order of, exactly the
same name(s) that appears on the certificate(s) representing such shares of
PalEx common stock submitted with this election form, unless "Special Payment
Instructions" in Step 2A are completed. No endorsement of certificate(s) or
separate stock power(s) are required.
4. Guarantee of Signature. No signature guarantee is required on this form if
it is signed by the registered holder(s) of the PalEx common stock surrendered
under this election form, and the IFCO Systems ordinary shares and/or the check
are to be issued and/or payable to the record holder(s) without any change or
correction in the name of the record holder(s). In all other cases, all
signatures on the election form/letter of transmittal must be guaranteed. All
signatures required to be guaranteed must be guaranteed by a bank, broker, or
other institution that is a member of the Medallion Signature Guaranty Program.
Public notaries cannot execute acceptable guarantees of signatures.
5. Miscellaneous. A single check, wire transfer, and/or stock certificate
representing IFCO Systems ordinary shares to be received will be issued to you
unless you have instructed us otherwise in this election form/letter of
transmittal.
All questions with respect to this election form/letter of transmittal
(including, without limitation, questions relating to the timeliness or
effectiveness of revocation or any election and computations as to any
adjustments) will be determined by the exchange agent, which determination
shall be conclusive and binding.
6. Backup federal income tax withholding and Substitute Form W-9. Under the
"backup withholding" provisions of U.S. federal income tax law, any payments
made to you pursuant to the merger may be subject to backup withholding of 31%.
To prevent backup withholding, PalEx stockholders should complete and sign the
Substitute Form W-9 included in Step 3 of this election form/letter of
transmittal and either: (a) provide your correct taxpayer identification number
("TIN") and certify, under penalties of perjury, that the TIN provided is
correct (or that you are awaiting a TIN), and that (i) you have not been
notified by the IRS that you have been subjected to backup withholding as a
result of failure to report all interest or dividends or (ii) the IRS has
notified you that you are no longer subject to backup withholding; or (b)
provide an adequate basis for exemption. If the box in Part 3 of the substitute
Form W-9 is checked, the exchange agent shall retain 31% of cash payments made
to you during the 60-day period following the date of the Substitute Form W-9.
If you furnish the exchange agent with your TIN within 60 days of the date of
the Substitute Form W-9, the exchange agent shall remit such amounts retained
during the 60-day period to you. If, however, you have not provided the
exchange agent with your TIN within such 60-day period, the exchange agent will
remit such previously retained amounts to the IRS as backup withholding. In
general, if you are an individual, the TIN is your Social Security number. If
the certificates for PalEx common stock are registered in more than one name or
are not in the name of the actual owner, consult the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 (copies
of which may be obtained
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from the exchange agent) for additional guidance on which number to report. If
the exchange agent is not provided with the correct TIN or an adequate basis
for exemption, the holder may be subject to a $50 penalty imposed by the IRS
and backup withholding at a rate of 31%. Certain stockholders (including, among
others, all corporations and certain foreign individuals) are not subject to
these backup withholding and reporting requirements. In order to satisfy the
exchange agent that a foreign individual qualifies as an exempt recipient, such
holder must submit a statement (generally, IRS Form W-8), signed under
penalties of perjury, attesting to that individual's exempt status. A form for
such statements can be obtained from the exchange agent.
For further information concerning backup withholding and instructions for
completing the Substitute Form W-9 (including how to obtain a TIN if you do not
have one and how to complete the Substitute Form W-9 if stock is held in more
than one name), consult the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 (copies of which may be obtained
from the exchange agent).
Failure to complete the Substitute Form W-9 will not, by itself, cause your
shares of PalEx common stock to be deemed invalidly tendered, but may require
the exchange agent to withhold 31% of the amount of any payments made pursuant
to the merger. Backup withholding is not an additional U.S. federal income tax.
Rather, the U.S. federal income tax liability of a person subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the IRS.
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