<PAGE>
 
                                                                   EXHIBIT 99.2
 
                    FORM OF ELECTION/LETTER OF TRANSMITTAL
            TO ACCOMPANY CERTIFICATES FOR SHARES OF COMMON STOCK OF
 
                               XTRA CORPORATION
 
          TO MAKE AN ELECTION IN CONNECTION WITH THE PROPOSED MERGER
            BY AND BETWEEN XTRA CORPORATION AND WHEELS MERGERCO LLC
                              AN ENTITY FORMED BY
        APOLLO MANAGEMENT IV, L.P., ON BEHALF OF ITS MANAGED FUNDS, AND
          ATLAS CAPITAL PARTNERS LLC, AN AFFILIATE OF INTERPOOL, INC.
 
               TYPE OF ELECTION (SEE SECTION B OF INSTRUCTIONS)
-------------------------------------------------------------------------------
          SHARES SUBMITTED (ATTACH SEPARATE SIGNED LIST IF NECESSARY)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                          TOTAL
                                                                         NUMBER
                                                                        OF SHARES    NUMBER     NUMBER
                                                              SHARE    REPRESENTED OF SHARES  OF SHARES
                                                           CERTIFICATE  BY SHARE     TO BE     FOR CASH
     NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)        NUMBER(1)  CERTIFICATE  RETAINED   ELECTION
-------------------------------------------------------------------------------------------------------
<S>                                                        <C>         <C>         <C>        <C>
                                                            -------------------------------------------

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

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

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

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

                                                            -------------------------------------------
                                                              TOTAL
                                                             SHARES
------------------------------------------------------------------------------------------------------
</TABLE>
 (1) Stockholders who hold XTRA Common Stock in book-entry form, should list
     their account number.
 
 
  This Form of Election/Letter of Transmittal is being delivered to you in
connection with the proposed merger (the "Merger") by and between XTRA
Corporation ("XTRA") and Wheels MergerCo LLC ("MergerCo"), an entity formed by
Apollo Management IV, L.P. ("Apollo"), on behalf of its managed funds, and
Atlas Capital Partners LLC, an affiliate of Interpool, Inc. ("Interpool"),
pursuant to an Agreement and Plan of Merger and Recapitalization, dated as of
June 18, 1998, and amended and restated as of July 31, 1998 (the
"Recapitalization Merger Agreement"), and must be completed by holders of
certificates for shares (the "Share Certificates") of XTRA Common Stock, par
value $0.50 per share ("Shares" or "XTRA Common Stock"), who wish to make an
Election (as defined herein) whether to retain their Shares or receive $65.00
per share in cash.
 
  For an election to be effective, this Form of Election/Letter of
Transmittal, properly completed, together with Share Certificates as to which
an Election is being made (or guarantee of delivery as provided herein) or, if
delivery of Shares is to be made by book-entry transfer to the account of
Boston EquiServe, L.P. (the "Exchange Agent") at The Depository Trust Company
("Book-Entry Transfer Facility"), by book-entry transfer procedures, and,
together with all other required documents, are to be delivered to the
Exchange Agent by 5:00 p.m., Eastern Standard time, on November 25, 1998,
unless extended (the "Election Deadline") in order to effect an Election. Such
Election is subject to the terms, conditions and limitations set forth in (a)
the Proxy Statement/Prospectus, dated     , 1998, relating to the Merger (the
"Proxy Statement/Prospectus"), (b) the Recapitalization Merger Agreement,
attached as Annex A to the Proxy Statement/Prospectus and (c) the accompanying
instructions.
 
  Questions and requests for assistance or additional copies of the Proxy
Statement/Prospectus or this Form of Election/Letter of Transmittal may be
directed to the Exchange Agent at the address set forth below.
<PAGE>
 
                     The Exchange Agent for the Merger is:
 
                            BOSTON EQUISERVE, L.P.
 

        By Hand:             By Overnight Courier:            By Mail:
 
   Securities Transfer      Boston EquiServe, L.P.     Boston EquiServe, L.P.
  & Reporting Services,    Corporate Reorganization   Corporate Reorganization
          Inc.                40 Campanelli Drive           P.O. Box 9573
  c/o Boston EquiServe        Braintree, MA 02184       Boston, MA 02205-9573
          L.P.
   100 William Street,
        Galleria
   New York, NY 10038
 
                               ----------------
 
  DELIVERY OF THIS FORM OF ELECTION/LETTER OF TRANSMITTAL TO AN ADDRESS, OTHER
THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN
THIS FORM OF ELECTION/LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE
THE FORM W-9 PROVIDED WITH THIS FORM OF ELECTION/LETTER OF TRANSMITTAL.
 
  THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS FORM
OF ELECTION/LETTER OF TRANSMITTAL IS COMPLETED.
 
 THE DEADLINE FOR SUBMITTING THIS FORM OF ELECTION/LETTER OF TRANSMITTAL TO
 THE EXCHANGE AGENT, TOGETHER WITH YOUR SHARE CERTIFICATES (OR GUARANTEES OF
 DELIVERY OF SHARE CERTIFICATES) AND ALL OTHER REQUIRED DOCUMENTS, IS 5:00
 P.M., EASTERN STANDARD TIME, ON NOVEMBER 25, 1998, UNLESS EXTENDED.
 
 
                                       2
<PAGE>
 
        PLEASE RETURN THIS ENTIRE FORM OF ELECTION/LETTER OF TRANSMITTAL
 
   XTRA stockholders whose Share Certificates are not immediately available
 or who cannot deliver their Share Certificates and all other documents
 required hereby to the Exchange Agent prior to the Election Deadline, and
 who wish to make an Election (as defined herein) must do so pursuant to the
 guaranteed delivery procedure described in Section A of the Instructions
 and the procedures for lost Share Certificates described in Section C of
 the Instructions.
 
   REGISTERED HOLDERS OF XTRA COMMON STOCK MAY ELECT TO EITHER RETAIN THE
 COMMON SHARES OR TO RECEIVE CASH CONSIDERATION (AS DEFINED HEREIN) WITH
 RESPECT TO ALL OR ANY PORTION OF THE SHARES HELD BY SUCH HOLDERS (THE "CASH
 ELECTION").
 
  [_]CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
     EXCHANGE AGENT'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES
     AND COMPLETE THE FOLLOWING:
 
  Name of Electing Institution: ____________________________________________
 
  Check Box of Applicable Book-Entry Transfer Facility:
 
  [_]The Depository Trust Company        [_]Philadelphia Depository Trust
                                            Company
 
  Account Number _____________________   Transaction Code Number ____________
 
  [_]CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
     GUARANTEED DELIVERY INCLUDED WITH THIS FORM OF ELECTION/LETTER OF
     TRANSMITTAL AND COMPLETE THE FOLLOWING:
 
  Name(s) of Registered Owner(s): __________________________________________
 
  Date of Execution of Notice of Guaranteed Delivery: ______________________
 
  Name of Eligible Institution that Guaranteed Delivery: ___________________
 
  If Shares are to be delivered by Book-Entry Transfer, check box of Book-
  Entry Transfer Facility: _________________________________________________
 
  [_]The Depository Trust Company        [_]Philadelphia Depository Trust
                                            Company
 
  Account Number _____________________   Transaction Code Number ____________
 
       PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
 
                                ---------------
 
   List below the Share Certificates to which this Form of Election/Letter
 of Transmittal relates. If the space provided below is inadequate, the
 information shown in the space below with respect to the Share Certificates
 and the type of election should be listed on a separate signed schedule
 affixed hereto.
 
 
                                       3
<PAGE>
 
     NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE INSTRUCTIONS
      SET FORTH IN THIS FORM OF ELECTION/LETTER OF TRANSMITTAL CAREFULLY.
 
Ladies and Gentlemen:
 
  In connection with the proposed Merger of MergerCo with and into XTRA, the
undersigned hereby submits the Share Certificates evidencing the Shares listed
above, or hereby transfers ownership of such Share Certificates on the account
books maintained by a Book-Entry Transfer Facility, and elects, subject to the
proration and other limitations set forth below and as more fully described in
the Recapitalization Merger Agreement (the "Election"), to either retain the
XTRA Common Stock or convert each share of XTRA Common Stock represented by
such Share Certificates into the right to receive $65.00 in cash, without any
interest thereon (the "Cash Consideration"). Pursuant to this Election 500,000
shares of XTRA Common Stock, which amounts to 10% ownership of XTRA, will be
retained by the existing shareholders and Apollo and Interpool will hold the
remaining ownership interest. It is understood that the following Election is
subject to (a) the terms, conditions and limitations set forth in the Proxy
Statement/Prospectus, receipt of which is hereby acknowledged by the
undersigned, (b) the terms, conditions and limitations set forth in the
Recapitalization Merger Agreement and (c) the instructions herein. XTRA's
acceptance of Shares delivered pursuant to this Form of Election/Letter of
Transmittal will constitute a binding agreement between the undersigned and
XTRA upon the terms and subject to the conditions of (a), (b) and (c) listed
above.
 
  The total number of shares of XTRA Common Stock to be retained by XTRA
stockholders is limited to 500,000 Shares. Accordingly, there can be no
assurance that a holder of Shares making an Election will retain all of such
holder's Shares. Stockholders who do not return a properly completed and
validly executed Form of Election/Letter of Transmittal prior to the Election
Deadline or who make no election will retain their Shares and will be deemed
to have made an Election to receive the Cash Consideration for all of their
Shares. However, because of proration, such stockholders may retain some of
their Shares. None of MergerCo, Apollo and Interpool, XTRA, the managers of
MergerCo, the XTRA Board of Directors or the Apollo and Interpool Board of
Directors makes any recommendation as to whether holders of XTRA Common Stock
should elect either to retain their Shares or to receive the Cash
Consideration in the Merger. Each stockholder must make his or her own
decision with respect to any such Election.
 
  The undersigned authorizes and instructs you, as Exchange Agent, to deliver
the Share Certificates listed above and to receive on behalf of the
undersigned, in exchange for the Shares represented thereby, any check for the
cash issuable in the Merger.
 
  The undersigned represents and warrants that the undersigned has full power
and authority to surrender the Share Certificate(s) surrendered herewith or
covered by a guarantee of delivery, free and clear of any liens, claims,
charges or encumbrances whatsoever. The undersigned understands and
acknowledges that the method of delivery of the Share Certificate(s) and all
other required documents is at the option and risk of the undersigned and that
the risk of loss and title to such Share Certificate(s) shall pass only after
the Exchange Agent has actually received the Share Certificate(s). All
questions as to the Election revocation, change and form of any Election and
surrender of Share Certificates hereunder shall be determined by the Exchange
Agent in its reasonable discretion and in accordance with the Recapitalization
Agreement, and such determination shall be binding and conclusive. The
undersigned, upon request, shall execute and deliver all additional documents
deemed by the Exchange Agent, XTRA or MergerCo to be necessary or desirable to
complete the sale, assignment, transfer, cancellation and retirement of the
Shares delivered herewith. No authority hereby conferred or agreed to be
conferred hereby shall be affected by, and all such authority shall survive,
the death or incapacity of the undersigned. All obligations of the undersigned
hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
 
  Subject to the proration and other limitations described below and as more
fully described in Article 2 of the Recapitalization Merger Agreement, the
Exchange Agent will honor the Cash Elections made by holders of Shares when it
issues the Cash Consideration after the Effective Time (as defined in the
Recapitalization Merger Agreement).
 
                                       4
<PAGE>
 
 
-----------------------------------        ---------------------------------
  SPECIAL PAYMENT INSTRUCTIONS              SPECIAL DELIVERY INSTRUCTIONS
       (SEE INSTRUCTIONS)                         (SEE INSTRUCTIONS)
 
 
  To be completed ONLY if the               To be completed ONLY if the
 check is to be made payable to,           check or the certificates for
 or the certificates for shares of         shares of XTRA Common Stock are
 XTRA Common Stock are to be reg-          to be mailed to someone other
 istered in, the name of someone           than the undersigned or to the
 other than the undersigned.               undersigned at an address other
                                           than that shown under "Type of
                                           Election."
 
 Name _____________________________        Mail check and/or certificates to:  
           (PLEASE PRINT)                                                      
                                           Name _____________________________  
 Address __________________________                                            
                                           __________________________________  
 __________________________________                  (PLEASE PRINT)            
             (ZIP CODE)                    Address __________________________  
 __________________________________                                            
    (TAXPAYER IDENTIFICATION OR            __________________________________  
      SOCIAL SECURITY NUMBER)                          (ZIP CODE)               
  (SEE SUBSTITUTE FORM W-9 BELOW)          
-----------------------------------        ----------------------------------

-----------------------------------------------------------------------------
                                   SIGN HERE
          IMPORTANT: COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 BELOW

 ____________________________________      Name(s): _________________________

 ____________________________________      __________________________________
     (SIGNATURE(S) OF HOLDER(S))                     (PLEASE PRINT)
 
                                           Capacity (full title): ___________
 Must be signed by registered
 owner(s) exactly as name(s)               Address: _________________________
 appear(s) on stock certificate(s)                                           
 or by person(s) authorized to             __________________________________
 become registered holder(s) by                        (ZIP CODE)            
 certificates and documents                                                  
 transmitted herewith. If signature        __________________________________
 is by attorney, executor,                  (AREA CODE AND TELEPHONE NUMBER) 
 administrator, trustee or guardian                                          
 or others acting in a fiduciary           __________________________________
 capacity, set forth full title and          (TAX IDENTIFICATION OR SOCIAL   
 see Instructions.                                   SECURITY NO.)           
                                                                             
                                           Dated: ___________________________ 
 
                           GUARANTEE OF SIGNATURES(S)
 
 If you have filled out the
 Special Payment Instructions              Authorized Signature: ____________
 above, you must have your
 signature(s) guaranteed. (See             Name: ____________________________ 
 Instructions)                                       (PLEASE PRINT)           
                                                                              
 Dated: _____________________, 1998        Firm: ____________________________ 
                                                                              
                                           Address: _________________________ 
                                         
                                           __________________________________ 
                                                       (ZIP CODE)             
                                                                              
                                           __________________________________ 
                                            (AREA CODE AND TELEPHONE NUMBER)   
                                           
 (Also complete enclosed Form W-9 and return with this Form of Election/Letter
                     of Transmittal to the Exchange Agent)
-----------------------------------------------------------------------------

                                       5
<PAGE>
 
  The undersigned understands that in lieu of any fractional share of XTRA
Common Stock retained after the Merger, there will be paid to each existing
shareholder of XTRA who otherwise would be entitled to receive a fractional
share of XTRA Common Stock an amount in cash determined by multiplying such
fraction by the Cash Consideration amount.
 
  Unless otherwise indicated in the box entitled "Special Payment
Instructions," the undersigned understands and agrees that the Exchange Agent
will issue any check and register any certificate for shares of XTRA Common
Stock in the name of the registered holder(s) of the Shares appearing above
under "Type of Election." Similarly, unless otherwise indicated in the box
entitled "Special Delivery Instructions," the undersigned understands and
agrees that the Exchange Agent will mail any check and any certificate for
shares of XTRA Common Stock to the registered holder(s) of the Shares at the
address(es) of the registered holder(s) appearing above under "Type of
Election." In the event that the boxes entitled "Special Payment Instructions"
and "Special Delivery Instructions" are both completed, the undersigned
understands and agrees that the Exchange Agent will issue any check and any
certificate for shares of XTRA Common Stock in the name(s) of, and mail such
check and such certificate to, the person(s) so indicated.
 
 
                                       6
<PAGE>
 
                           IMPORTANT TAX INFORMATION
 
  In order to ensure compliance with federal income tax requirements, each
holder of Shares is requested to provide the Exchange Agent with his or her
correct Taxpayer Identification Number and to certify whether he or she is
subject to backup federal income tax withholding by completing and signing the
Substitute Form W-9 below. See Instruction C6 and accompanying Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9.
 
                      PAYER'S NAME: ________________________

------------------------------------------------------------------------------- 
 SUBSTITUTE         PART IX--Please provide        
 FORM W-9           your TIN in box at right       --------------------------- 
                    and certify by signing and        Social Security Number    
 DEPARTMENT OF      dating below. For              
 THE TREASURY       individuals, this is your                   OR             
 INTERNAL           social security number.                                    
 REVENUE                                           ---------------------------  
 SERVICE            PART 2X--Awaiting TIN [_]        Employer Identification 
                                                              Number          
                   ------------------------------------------------------------
 PAYER'S REQUEST   CERTIFICATION--Under penalties of perjury, I certify that: 
 FOR TAXPAYER                                                                 
 IDENTIFICATION    (1) the number shown on this form is my correct taxpayer   
 NUMBER (TIN)          identification number (or I am waiting for a number     
                       to be issued to me) and                                 
                                                                               
                   (2) I am not subject to backup withholding either because   
                       (a) I am exempt from backup withholding, (b) I have     
                       not been notified by the Internal Revenue Service       
                       (IRS) that I am subject to backup withholding as a      
                       result of the failure to report all interest or         
                       dividends, or (c) the IRS has notified me that I am     
                       no longer subject to backup withholding.                 
                   ------------------------------------------------------------
                    You must cross out item (2) above if you have been noti-
                    fied by the IRS that you are currently subject to backup
                    withholding because of under reporting interest or divi-
                    dends on your tax return. However, if after being noti-
                    fied by the IRS that you were subject to backup withhold-
                    ing, you receive another notification from the IRS that
                    you are no longer subject to backup withholding, do not
                    cross out such item (2).
 
                   Signature __________________  Date  ______________________
------------------------------------------------------------------------------- 
 NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY
       IMPOSED BY THE IRS AND BACKUP WITHHOLDING OF 31% OF ANY CASH PAYMENTS
       MADE TO YOU PURSUANT TO THE MERGER. PLEASE REVIEW THE ENCLOSED
       GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
       SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
 
          YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
                 THE BOX IN PART 2 OF THE SUBSTITUTE FORM W-9.
 
------------------------------------------------------------------------------- 
            CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
 
   I CERTIFY UNDER PENALTIES OF PERJURY THAT A TIN HAS NOT BEEN ISSUED TO
 ME, AND EITHER THAT (I) I HAVE MAILED OR DELIVERED AN APPLICATION TO
 RECEIVE A TIN TO THE APPROPRIATE IRS CENTER OR SOCIAL SECURITY
 ADMINISTRATION OFFICE OR (II) I INTEND TO MAIL OR DELIVER AN APPLICATION IN
 THE NEAR FUTURE. I UNDERSTAND THAT IF I DO NOT PROVIDE A TIN BY THE TIME OF
 PAYMENT, 31% OF ALL REPORTABLE PAYMENTS MADE TO ME WILL BE WITHHELD, BUT
 THAT SUCH AMOUNTS WILL BE REFUNDED TO ME IF I THEN PROVIDE A TIN WITHIN
 SIXTY (60) DAYS.
 
 Signature __________________________    Date _______________________________
------------------------------------------------------------------------------- 
 
 
                                       7
<PAGE>
 
                                 INSTRUCTIONS
 
            FORMING PART OF THE TERMS AND CONDITIONS OF THE MERGER
 
A. FORM OF ELECTION/LETTER OF TRANSMITTAL
 
  1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Form of Election/Letter of Transmittal must be guaranteed
by a firm which is a recognized member of a Medallion Signature Guarantee
Program, which members include any registered national securities exchange or
a member of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company in the United States (each, an "Eligible
Institution"). No signature guarantee is required on this Form of
Election/Letter of Transmittal if (a) this Form of Election/Letter of
Transmittal is signed by the registered holder(s) (which term, for purposes of
this document, shall include any participant in a Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Shares) of
Shares delivered herewith, unless such holder(s) has completed either the box
entitled "Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the above hereof. If a Share Certificate is registered in the
name of a person other than the signer of this Form of Election/Letter of
Transmittal, or if checks or certificates are to be payable to the order of or
registered in the name of a person other than the registered holder(s), then
the Share Certificate must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name(s) of the registered
holder(s) appear(s) on the Share Certificate, with the signature(s) on such
Share Certificate or stock powers guaranteed as described above.
 
  2. Delivery of Form of Election/Letter of Transmittal and Share
Certificates; Notice of Guaranteed Delivery. This Form of Election/Letter of
Transmittal is to be used either if Share Certificates are to be forwarded
herewith, if Shares are to be delivered by book-entry transfer pursuant to
book-entry transfer procedures, or if delivery of Shares is to be guaranteed.
Share Certificates evidencing all delivered Shares, or confirmation of a book-
entry transfer of such Shares, if such procedure is available, into the
Exchange Agent's account at one of the Book-Entry Transfer Facilities pursuant
to book-entry transfer procedures together with a properly completed and duly
executed Form of Election/Letter of Transmittal (or facsimile thereof) with
any required signature guarantees (or, in the case of a book-entry transfer,
an Agent's Message, as defined below) and any other documents required by this
Form of Election/Letter of Transmittal, must be received by the Exchange Agent
at its address set forth on the reverse hereof prior to the Election Deadline.
If Share Certificates are forwarded to the Exchange Agent in multiple
deliveries, a properly completed and duly executed Form of Election/Letter of
Transmittal must accompany each such delivery. XTRA stockholders whose Share
Certificates are not immediately available and who cannot deliver their Share
Certificates and all other required documents to the Exchange Agent prior to
the Election Deadline or who cannot complete the procedure for delivery by
book-entry transfer on a timely basis may deliver their Shares pursuant to the
guaranteed delivery procedure. Pursuant to such procedures: (i) any such
delivery must be made by or through an Eligible Institution; (ii) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in
the form provided herewith, must be received by the Exchange Agent prior to
the Election Deadline; and (iii) in the case of a guarantee of Shares, the
Share Certificate, in proper form for transfer, or a confirmation of a book-
entry transfer of such Shares, if such procedure is available, into the
Exchange Agent's account at one of the Book-Entry Transfer Facilities,
together with a properly completed and duly executed Form of Election/Letter
of Transmittal (or manually signed facsimile thereof) with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message), and any other documents required by this Form of Election/Letter of
Transmittal, must be received by the Exchange Agent within three trading days
after the date of execution of such Notice of Guaranteed Delivery. The term
"Agent's Message" means a message, transmitted by a Book-Entry Transfer
Facility to, and received by, the Exchange Agent and forming a part of a book-
entry confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility delivering the Shares, that such participant has received
and agrees to be bound by the terms of this Form of Election/Letter of
Transmittal and that XTRA and MergerCo may enforce such agreement against the
participant.
 
  Registered holders of Shares who are nominees only may submit a separate
Form of Election/Letter of Transmittal for each beneficial owner for whom such
registered holder is a nominee; provided, however, that at the request of the
Exchange Agent, such registered holder shall certify to the satisfaction of
the Exchange Agent that such registered holder holds such XTRA Common Stock as
a nominee for the beneficial owner thereof. Each beneficial owner for which a
Form of Election/Letter of Transmittal is submitted will be treated as a
separate holder of XTRA Common Stock.
 
                                       8
<PAGE>
 
  XTRA stockholders who do not submit an effective Form of Election/Letter of
Transmittal or whose Forms of Election/Letters of Transmittal and Share
Certificates (or appropriate Notices of Guaranteed Delivery), are not received
prior to the Election Deadline or who cannot complete the procedure for
delivery by book-entry transfer on a timely basis will be, under conditions
set forth in Section B1and B2 of Instructions, deemed to have made a "Non-
Election" with respect to their Shares (each such Share, a "Non-Electing
Share") and will not be entitled to make an Election and may retain some of
such holders XTRA Common Stock or receive the Cash Consideration for all of
their Shares.
 
  THE METHOD OF DELIVERY OF THIS FORM OF ELECTION/LETTER OF TRANSMITTAL, SHARE
CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE
STOCKHOLDER, INCLUDING DELIVERY THROUGH A BOOK-ENTRY TRANSFER FACILITY, AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ENSURE TIMELY DELIVERY.
 
  3. Inadequate Space. If the space provided herein under "Type of Election"
is inadequate, the Share Certificate numbers, the number of Shares evidenced
by such Share Certificates and the number of Shares delivered should be listed
on a separate signed schedule and attached hereto.
 
  4. Change or Revocation of Election. Any holder of Shares may at any time up
to and immediately prior to the Election Date revoke or change his or her
Election by written notice received by the Exchange Agent prior to the
Election Date accompanied by a properly completed and signed, revised Form of
Election/Letter of Transmittal or by withdrawal of his or her Share
Certificates or of the Notice of Guaranteed Delivery of such certificates,
previously deposited with the Exchange Agent. Such revocation can also be made
after the Election Date if the Exchange Agent is legally required to do so,
provided that the Effective Time shall not have occurred prior to the
revocation. Once a revocation is made, the Exchange Agent will return all
Share Certificates that pertain to such revocation to the stockholder.
 
  5. Automatic Revocations of Elections. All Elections will be revoked
automatically if the Exchange Agent is notified in writing by XTRA and
MergerCo that the Merger has been abandoned, and Share Certificates
represented by Forms of Election/Letters of Transmittal will be promptly
returned without charge to the persons who have submitted this Form of
Election/Letter of Transmittal upon written request to that effect from each
holder of XTRA Common Stock who has submitted this Form of Election/Letter of
Transmittal.
 
B. ELECTION AND ALLOCATION PROCEDURES
 
  1. Elections. By completing the appropriate box above and completing this
Form of Election/Letter of Transmittal in accordance with the instructions
herein and delivering the Share Certificates and any other required documents,
an XTRA stockholder will be entitled to make either an Election to retain the
Shares or receive the Cash Consideration with respect to all or any portion of
the Shares held by such holder.
 
  For each Share with respect to which an Election to retain such Share has
been made and not revoked (the "Potential Election Shares") and which is to be
retained in accordance with the proration provisions of the Recapitalization
Merger Agreement, the holder of such Share will receive a right to retain such
fully paid and nonassessable Share (an "Election Share"). For each Share which
was not a Potential Election Share, but which is to be retained in accordance
with the proration provisions of the Recapitalization Agreement, the holder of
such Share will receive the right to retain such fully paid and nonassessable
Share (a "Non--Election Share"). The sum of the Non-Election Shares and
Election Shares, which will equal 500,000 Shares, is called herein the
"Retained Shares." For each Share other than Retained Shares and Dissenting
Shares (herein defined), the holder of such Share will receive in the Merger
the right to the Cash Consideration equal to $65.00 upon surrender of such
Share Certificate.
 
  Each XTRA stockholder should consult such stockholder's own financial
advisor and tax advisor as to the specific consequences of the Merger and
Election to such stockholder.
 
  No alternative, conditional or contingent Elections will be accepted.
 
  2. Proration. The "Retained Shares Number" will be 500,000. If the number of
Potential Election Shares is greater than the Retained Share Number, (i) a
proration factor shall be determined by dividing the Retained Share Number by
the
 
                                       9
<PAGE>
 
total number of Potential Election Shares, (ii) the number of Potential
Election Shares covered by each Election to be retained as Election Shares
shall be determined by multiplying the proration factor by the total number of
Potential Election Shares covered by such Election, and (iii) all Potential
Election Shares other than those retained in (ii) will be converted into the
Cash Consideration.
 
  If the Number of Potential Election Shares is less than or equal to the
Retained Share Number, (i) a proration factor shall be determined by dividing
(x) the difference between the Retained Share Number and the number of
Potential Election Shares, by (y) the number of the Common Shares other than
the Potential Election Shares and the Dissenting Shares (the "Potential Cash
Shares"), (ii) the number of Potential Cash Shares held by each stockholder to
be retained as Non-Election Shares shall be determined by multiplying the
proration factor by the total number of Potential Cash Shares, and (iii) all
Potential Cash Shares other than those retained in (ii) shall be converted
into the Cash Consideration.
 
  3. Election Deadline. The Election Deadline for submitting this Form of
Election/Letter of Transmittal to the Exchange Agent is 5:00 p.m., Eastern
Standard time, on November 25, 1998, unless extended. MergerCo and XTRA may
jointly extend the Election Deadline to a later date so long as such later
date is no later than the date on which the Merger is consummated. If the
Election Deadline is extended, MergerCo and XTRA will announce such extension
in a news release delivered to the Dow Jones News Service.
 
                                     * * *
 
  A more complete description of the election and allocation procedures is set
forth in the Proxy Statement/Prospectus under "The Merger--Procedures for
Exchange of Certificates" and in Article 2 of the Recapitalization Merger
Agreement. All Elections are subject to compliance with the election
procedures provided for in the Recapitalization Merger Agreement. In
connection with making any Election, each XTRA stockholder should read
carefully, among other matters, the description and statement of the
information contained in the Proxy Statement/Prospectus under "The Merger--
Material Federal Income Tax Consequences."
 
C. RECEIPT OF MERGER CONSIDERATION, SIGNATURES, SPECIAL INSTRUCTIONS, TAXES
AND ADDITIONAL COPIES
 
  1. Receipt of Merger Consideration. After the Effective Time and upon the
surrender of Share Certificates by the shareholders, the Exchange Agent will
pay the holder of such Certificates, who elected to receive the Cash
Consideration, the Cash Consideration multiplied by the number of cashed
Shares. The Exchange Agent will also deliver to the holders of Share
Certificates, who elected to retain XTRA Common Stock or who because of
proration will receive Retained Shares, a certificate representing the number
of Retained Shares which such holders have the right to receive and cash in
lieu of fractional retained Shares. Upon such exchange the Certificates that
the holders had surrendered will be cancelled.
 
  Promptly following the date which is 180 days after the Effective Time the
Exchange Agent will deliver to XTRA all cash, Share Certificates and other
documents related to the transaction set forth in this Form of Election.
Thereafter the Exchange Agent's duty will be terminated.
 
  2. Signatures on Form of Election/Letter of Transmittal; Stock Powers and
Endorsements. (a) If this Form of Election/Letter of Transmittal is signed by
the registered holder(s) of the Shares delivered herewith, the signature(s)
must correspond with the name(s) as written on the face of the Share
Certificates evidencing such Shares without alteration, enlargement or any
other change whatsoever.
 
  (b) If any Share delivered herewith is owned of record by two or more
persons, all such persons must sign this Form of Election/Letter of
Transmittal.
 
  (c) If any of the Shares delivered herewith are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Forms of Election/Letters of Transmittal as there are different
registrations of such Shares.
 
  (d) If this Form of Election/Letter of Transmittal is signed by the
registered holder(s) of the Shares delivered herewith, no endorsements of
Share Certificates or separate stock powers are required, unless checks are to
be payable to the order of
 
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<PAGE>
 
or certificates evidencing shares of XTRA Common Stock are to be registered in
the name of, a person other than the registered holder(s), in which case, the
Share Certificate(s) evidencing the Shares delivered herewith must be endorsed
or accompanied by appropriate stock powers, in either case signed exactly as
the name(s) of the registered holder(s) appear(s) on such Share
Certificate(s). Signatures on such Share Certificate(s) and stock powers must
be guaranteed by an Eligible Institution (unless signed by an Eligible
Institution).
 
  (e) If this Form of Election/Letter of Transmittal is signed by a person
other than the registered holder(s) of the Shares delivered herewith, the
Share Certificate(s) evidencing the Shares delivered herewith must be endorsed
or accompanied by appropriate stock powers, in either case signed exactly as
the name(s) of the registered holder(s) appear(s) on such Share
Certificate(s). Signatures on such Share Certificate(s) and stock powers must
be guaranteed by an Eligible Institution (unless signed by an Eligible
Institution).
 
  (f) If this Form of Election/Letter of Transmittal or any Share Certificate
or stock power is signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person should so indicate when
signing, and proper evidence satisfactory to XTRA and MergerCo of such
person's authority so to act must be submitted.
 
  3. Special Payment and Delivery Instructions. If any check or certificates
evidencing shares of XTRA Common Stock are to be payable to the order of, or
registered in the name of, a person other than the person(s) signing this Form
of Election/Letter of Transmittal or if such checks or such certificates are
to be sent to someone other than the person(s) signing this Form of
Election/Letter of Transmittal or to the person(s) signing this Form of
Election/Letter of Transmittal but at an address other than that shown in the
box entitled "Type of Election," the appropriate boxes on this Form of
Election/Letter of Transmittal must be completed.
 
  4. Withholding. XTRA and the Exchange Agent will be entitled to deduct and
withhold from the Merger Consideration such amounts as XTRA and the Exchange
Agent are required to deduct and withhold pursuant to the Internal Revenue
Code of 1986, as amended (the "Code") or any state, local or foreign tax law.
To the extent that amounts are so withheld by XTRA or the Exchange Agent, as
the case may be, such withheld amounts shall be treated for all purposes of
the Recapitalization Merger Agreement as having been paid to the holder of the
Shares in respect of which such deduction and withholding was made by XTRA or
the Exchange Agent, as the case may be.
 
  5. Stock Transfer Taxes. XTRA will bear the liability for any state stock
transfer taxes applicable to the issuance and delivery of checks and
certificates in connection with the Merger, provided, however, that if any
such check or certificate is to be issued in a name other than that in which
the Shares Certificates surrendered in exchange therefor are registered, it
shall be a condition of such exchange that the person requesting such exchange
shall pay the amount of any stock transfer taxes (whether imposed on the
registered holder or such person), payable on the account of the transfer to
such person, to the Exchange Agent or satisfactory evidence of the payment of
such taxes, or exemption therefrom, shall be submitted to the Exchange Agent
before any such check or certificate is issued. Except as provided in this
instruction C5, it will not be necessary for transfer tax stamps to be affixed
to the Share Certificates evidencing the Shares delivered herewith.
 
  6. Requests for Assistance or Additional Copies. Requests for assistance or
additional copies of the Proxy Statement/Prospectus may be directed to Boston
EquiServe at (800) 736-3001.
 
  7. Form W-9. Under the federal income tax law, a stockholder who delivers
Shares is required by law to provide the Exchange Agent (as payor) with such
stockholder's correct Taxpayer Identification Number ("TIN") on Form W-9. If
such stockholder is an individual, the TIN is such stockholder's social
security number. If the Exchange Agent is not provided with the correct TIN,
the stockholder may be subject to a $50 penalty imposed by the IRS. In
addition, payments of Cash Consideration that are made to such stockholder
with respect to Shares purchased pursuant to the Merger may be subject to
backup withholding 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 for a foreign individual to
qualify as an exempt recipient, such individual must submit a statement,
signed under penalties of perjury, attesting to such individual's exempt
status. Forms of such statements can be obtained from the Exchange Agent. See
the instructions on the enclosed Form W-9 for additional information. If
backup withholding applies with respect to a stockholder, the Exchange Agent
is
 
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<PAGE>
 
required to withhold 31% of any cash payments made to such stockholder. Backup
withholding is not an additional tax. Rather, the tax liability of persons
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
form the Internal Revenue Service (the "IRS").
 
  To prevent backup withholding on payments of Cash Consideration that are
made to a stockholder with respect to Shares delivered herewith, the
stockholder is required to notify the Exchange Agent of such stockholder's
correct TIN by completing the enclosed Form W-9 certifying (a) that the TIN
provided on Form W-9 is correct (or that such stockholder is awaiting a TIN)
and (b) that (i) such stockholder has not been notified by the IRS that such
stockholder is subject to backup withholding as a result of a failure to
report all interest or dividends or (ii) the IRS has notified such stockholder
that such stockholder is no longer subject to backup withholding.
 
  The stockholder is required to give the Exchange Agent the TIN of the
registered holder of the Shares tendered hereby. If the Shares are in more
than one name or are not in the name of the actual owner, consult the enclosed
Form W-9 for additional guidance on which TIN to report. If the stockholder
has not been issued a TIN and has applied for a TIN or intends to apply for a
TIN in the near future, the stockholder should check the box in Part 2,
complete Part III (the "Certification") and sign and date the Form W-9.
Notwithstanding that the Certification is completed, the Exchange Agent will
withhold 31% of all payments of Cash Consideration to such stockholder until a
properly certified TIN is provided to the Exchange Agent.
 
  8. Cancellation. Each Share held in the treasury of XTRA and each Share
owned by any subsidiary of XTRA will, by the virtue of the Merger and without
any action on the holders of those Shares, cease to be outstanding, be
canceled and retired without payment of any consideration.
 
  9. Dissenter's Rights. Shares that have not been voted for adoption of the
Merger and the Recapitalization Agreement and with respect to which appraisal
had been properly demanded ("Dissenting Shares") shall not be converted into
the right to receive the Merger Consideration unless the holder of such Shares
withdraws the demand of appraisal or becomes ineligible for such appraisal.
 
  10. Lost, Destroyed or Stolen Share Certificates. If any XTRA stockholder's
Share Certificate(s) representing Shares have been mutilated, lost, destroyed
or stolen prior to the Effective Time, such stockholder should promptly notify
Boston EquiServe, L.P. (the "Transfer Agent") for XTRA. The XTRA stockholder
will then be instructed as to the steps that must be taken in order to replace
the Share Certificate(s). In such an event, XTRA or the Exchange Agent will
issue in exchange of such lost, stolen or destroyed Certificates, upon the
making of an affidavit from the holder, such Merger Consideration set forth in
this Form of Election. However, XTRA may in its discretion require the owner
of such lost, stolen and destroyed Certificates to deliver a bond in such sum
as it may reasonably direct as indemnity against any claim that may be made
against MergerCo or the Exchange Agent with respect to the Certificates.
 
  ANY XTRA STOCKHOLDER WHOSE SHARE CERTIFICATES HAVE BEEN LOST, DESTROYED OR
STOLEN SHOULD ALLOW FOR SUFFICIENT TIME TO REPLACE SUCH SHARE CERTIFICATES AND
ARE URGED TO CONTACT THE TRANSFER AGENT AS PROMPTLY AS POSSIBLE AFTER
RECEIVING THIS FORM OF ELECTION/LETTER OF TRANSMITTAL.
 
 
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