
<PAGE>   1
 
                                                                  EXHIBIT (A)(1)
 
                           OFFER TO PURCHASE FOR CASH
 
                     ALL OUTSTANDING SHARES OF COMMON STOCK
            (INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
 
                                       OF
 
                 AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
                                       BY
 
                           HORIZON ACQUISITION, INC.
                     AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
 
                             DOREL INDUSTRIES INC.
                                       AT
 
                              $9.625 NET PER SHARE
 
         THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
 NEW YORK CITY TIME, ON THURSDAY, APRIL 30, 1998, UNLESS THE OFFER IS EXTENDED
 
     THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES WHICH, WHEN ADDED TO SHARES ALREADY OWNED BY HORIZON ACQUISITION, INC.
AND DOREL INDUSTRIES INC., REPRESENTS AT LEAST A MAJORITY OF THE SHARES
OUTSTANDING ON A FULLY DILUTED BASIS. THE OFFER IS ALSO SUBJECT TO OTHER TERMS
AND CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE SECTION 14.
 
     THE BOARD OF DIRECTORS OF AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
UNANIMOUSLY HAS DETERMINED THAT EACH OF THE OFFER AND THE MERGER IS FAIR TO, AND
IN THE BEST INTERESTS OF, THE SHAREHOLDERS OF AMERIWOOD INDUSTRIES INTERNATIONAL
CORPORATION, AND RECOMMENDS THAT SUCH SHAREHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
                            ------------------------
 
                                   IMPORTANT
 
     Any shareholder desiring to tender all or any portion of his Shares should
either (1) complete and sign the Letter of Transmittal (or a facsimile thereof)
in accordance with the instructions in the Letter of Transmittal and mail or
deliver it together with the certificate(s) evidencing tendered Shares, and any
other required documents, to the Depositary or tender such Shares pursuant to
the procedure for book-entry transfer set forth in Section 2 or (2) request his
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for him. Any shareholder whose Shares are registered in the name of
a broker, dealer, commercial bank, trust company or other nominee must contact
such broker, dealer, commercial bank, trust company or other nominee if he
desires to tender such Shares.
 
     A shareholder who desires to tender Shares and whose certificates
evidencing such Shares are not immediately available, or who cannot comply with
the procedure for book-entry transfer on a timely basis, may tender such Shares
by following the procedure for guaranteed delivery set forth in Section 2.
 
     Questions or requests for assistance may be directed to the Information
Agent at its address and telephone number set forth on the back cover of this
Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may also be obtained from the
Information Agent or from brokers, dealers, commercial banks or trust companies.
A shareholder may also contact brokers, dealers, commercial banks or trust
companies for assistance concerning the Offer.
                            ------------------------
 
                    The Information Agent for the Offer is:
 
                        Innisfree M&A Incorporated logo
April 3, 1998
<PAGE>   2
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
INTRODUCTION................................................    1
THE OFFER...................................................    3
      1. Terms of the Offer.................................    3
      2. Procedure for Tendering Shares.....................    5
      3. Withdrawal Rights..................................    7
      4. Acceptance for Payment and Payment.................    8
      5. Certain Federal Income Tax Consequences............    9
      6. Price Range of Shares; Dividends on the Shares.....   10
      7. Effect of the Offer on the Market for the Shares;
         Stock Quotation; Exchange Act Registration; Margin
         Regulations........................................   10
      8. Certain Information Concerning the Company.........   11
      9. Certain Information Concerning the Purchaser and
       Parent...............................................   13
     10. Source and Amount of Funds.........................   15
     11. Background of the Offer; Contacts with the Company;
         the Merger Agreement and Related Agreements........   15
     12. Purpose of the Offer and the Merger; Plans for the
      Company; Other Matters................................   28
     13. Dividends and Distributions........................   29
     14. Certain Conditions of the Offer....................   29
     15. Certain Legal Matters..............................   31
     16. Fees and Expenses..................................   32
     17. Miscellaneous......................................   33
SCHEDULE I.--Directors and Executive Officers of Parent and
  the Purchaser.............................................  I-1
</TABLE>
<PAGE>   3
 
To the Holders of Common Stock of
  Ameriwood Industries International Corporation:
 
                                  INTRODUCTION
 
     Horizon Acquisition, Inc., a Delaware corporation (the "Purchaser") and an
indirect wholly-owned subsidiary of Dorel Industries Inc., a Quebec, Canada
corporation ("Parent"), hereby offers to purchase all outstanding shares of
Common Stock, par value $1.00 per share (the "Common Stock"), including the
associated common share purchase rights (the "Rights", and together with the
Common Stock, the "Shares"), of Ameriwood Industries International Corporation,
a Michigan corporation (the "Company"), at a price of $9.625 per Share, net to
the seller in cash, upon the terms and subject to the conditions set forth in
this Offer to Purchase and in the related Letter of Transmittal (which together
constitute the "Offer").
 
     Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by the
Purchaser pursuant to the Offer. The Purchaser will pay all charges and expenses
of Harris Trust Company of New York (the "Depositary") and Innisfree M&A
Incorporated (the "Information Agent") incurred in connection with the Offer.
See Section 16.
 
     THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") UNANIMOUSLY HAS
DETERMINED THAT EACH OF THE OFFER AND THE MERGER (AS DEFINED BELOW) IS FAIR TO,
AND IN THE BEST INTERESTS OF, THE SHAREHOLDERS OF THE COMPANY, AND RECOMMENDS
THAT SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE
OFFER.
 
     ABN AMRO Incorporated ("ABN AMRO") has delivered to the Board its written
opinion that the consideration to be received by the shareholders of the Company
pursuant to each of the Offer and the Merger is fair to such shareholders from a
financial point of view. A copy of the opinion of ABN AMRO is contained in the
Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule
14D-9"), which is being mailed to shareholders herewith.
 
     THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES WHICH, WHEN ADDED TO ANY SHARES ALREADY OWNED BY THE PURCHASER AND
PARENT, REPRESENTS AT LEAST A MAJORITY OF THE SHARES THEN OUTSTANDING ON A FULLY
DILUTED BASIS (THE "MINIMUM CONDITION"). SEE SECTION 14, WHICH SETS FORTH IN
FULL THE CONDITIONS TO THE OFFER.
 
     The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of March 27, 1998 (the "Merger Agreement"), among Parent, the Purchaser and
the Company. The Merger Agreement provides that, among other things, as soon as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement, and in
accordance with the relevant provisions of the Michigan Business Corporation Act
(the "MBCA") and the General Corporation Law of the State of Delaware (the
"DGCL"), the Purchaser will be merged with and into the Company (the "Merger").
Following consummation of the Merger, the Company will continue as the surviving
corporation (the "Surviving Corporation") and will become an indirect
wholly-owned subsidiary of Parent. At the effective time of the Merger (the
"Effective Time"), each Share issued and outstanding immediately prior to the
Effective Time will be cancelled and converted automatically into the right to
receive $9.625 in cash, or any higher price that may be paid per Share in the
Offer, without interest (the "Offer Price"). The Merger Agreement is more fully
described in Section 11.
 
     The Merger Agreement provides that, promptly upon the purchase by the
Purchaser of Shares pursuant to the Offer and from time to time thereafter, the
Purchaser shall be entitled to designate up to such number of directors, rounded
up to the next whole number, on the Board as will give the Purchaser
representation on the Board equal to the product of the number of directors on
the Board multiplied by the percentage that the aggregate number of Shares then
beneficially owned by the Purchaser and its affiliates following such purchase
<PAGE>   4
 
bears to the total number of Shares then outstanding. In the Merger Agreement,
the Company has agreed to take all actions necessary to cause the Purchaser's
designees to be elected as directors of the Company, including increasing the
size of the Board or securing the resignations of incumbent directors or both.
 
     The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including the approval and adoption of the Merger Agreement
by the requisite vote of the shareholders of the Company. See Section 11. Under
the Company's Restated Articles of Incorporation and the MBCA, the affirmative
vote of the holders of a majority of the outstanding Shares is required to
approve and adopt the Merger Agreement and the Merger. Consequently, if the
Purchaser acquires (pursuant to the Offer or otherwise) at least a majority of
the outstanding Shares, the Purchaser will have sufficient voting power to
approve and adopt the Merger Agreement and the Merger without the vote of any
other shareholder.
 
     Under the MBCA, if the Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the then outstanding Shares, the Purchaser will be
able to approve and adopt the Merger Agreement and the transactions contemplated
thereby, including the Merger, without a vote of the Company's shareholders. In
such event, Parent, the Purchaser and the Company have agreed to take, at the
request of the Purchaser, all necessary and appropriate action to cause the
Merger to become effective as soon as reasonably practicable after such
acquisition, without a meeting of the Company's shareholders. If, however, the
Purchaser does not acquire at least 90% of the then outstanding Shares pursuant
to the Offer or otherwise and a vote of the Company's shareholders is required
under the MBCA, a significantly longer period of time will be required to effect
the Merger. See Section 15.
 
     The Purchaser presently intends to seek to cause the Company to make an
application for the termination of the registration of the Shares under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as soon as
possible after the purchase of all validly tendered Shares pursuant to the Offer
if the requirements for termination of registration are met. See Section 7.
 
     In connection with the execution of the Merger Agreement, Parent entered
into Tender and Option Agreements, each dated as of March 27, 1998 (the "Tender
Agreements"), with each of Neil L. Diver, Chairman of the Board, and Kevin C.
Coyne and Edwin Wachtel, each a member of the Board (collectively, the "Director
Shareholders"), who control an aggregate of 382,755 Shares, or approximately 10%
of the Shares outstanding on March 27, 1998, pursuant to which the Director
Shareholders agreed, among other things and upon the terms and conditions set
forth therein, to tender the Shares they own of record (255,717 Shares, or
approximately 5.88% of the outstanding Shares) in the Offer and grant an option
on such Shares to the Purchaser at the Offer Price, to vote such Shares in the
manner specified in the Tender Agreements with respect to certain matters and to
appoint Parent as the Director Shareholders' proxy to vote such Shares in
certain circumstances. The Tender Agreements are more fully described in Section
11.
 
     The Minimum Condition requires that the number of Shares validly tendered
and not withdrawn prior to the expiration of the Offer, when added to any Shares
already owned by the Purchaser and Parent, represent at least a majority of the
Shares outstanding on a fully diluted basis. According to the Company, as of
March 27, 1998, there were 4,349,606 Shares issued and outstanding, and there
were outstanding options to purchase an aggregate of 176,625 Shares. The Merger
Agreement provides, among other things, that the Company will not, without the
prior written consent of Parent, issue any additional Shares (except on the
exercise of outstanding options and as otherwise permitted under the Merger
Agreement). Based on the foregoing and assuming that all outstanding options are
exercised, the Minimum Condition will be satisfied if 2,263,116 Shares are
validly tendered and not withdrawn prior to the expiration of the Offer,
including those Shares already owned by the Purchaser and Parent. If the Minimum
Condition is satisfied, Parent would be able to effect the Merger without the
affirmative vote of any other shareholder of the Company.
 
     On April 4, 1996, the Board approved a Shareholder Protection Rights Plan
(the "Rights Plan"). The Rights Plan provides that one Right will attach to each
outstanding share of Common Stock. The purchase price payable upon exercise of a
Right is $80.00, subject to adjustment. The distribution was payable to the
shareholders of record at the close of business on May 21, 1996 (the "Record
Date") and with respect to all Common Stock issued after the Record Date and
prior to certain events set forth in the Rights Plan. The description of the
Rights Plan and terms of the Rights are set forth in a Rights Agreement, dated
as of April 4,
                                        2
<PAGE>   5
 
1996 (the "Rights Agreement"), by and between the Company and Harris Trust and
Savings Bank, as Rights Agent. The Rights are triggered when a person becomes a
beneficial owner of 20% or more of the outstanding Common Stock, or a tender or
exchange offer, the consummation of which would result in beneficial ownership
by a person of 20% or more of such outstanding Common Stock, is commenced. Based
on the information disclosed by the Company in connection with and prior to the
Company entering the Merger Agreement, the Company has amended the Rights
Agreement to provide that the execution of the Merger Agreement and any
amendments thereto and the Tender Agreements and the consummation of the
transactions contemplated by such agreements will not cause (i) Parent and/or
the Purchaser or their respective Affiliates or Associates to become an
Acquiring Person (as such terms are defined in the Rights Agreement) unless the
Merger Agreement and the Tender Agreements have been terminated in accordance
with their respective terms, or (ii) a Distribution Date or a Shares Acquisition
Date (as such terms are defined in the Rights Agreement) to occur, irrespective
of the number of Shares acquired pursuant to the Offer, the Merger or the
transactions contemplated by the Merger Agreement and the Tender Agreements.
 
     The Purchaser estimates that the total funds required to purchase all
Shares validly tendered pursuant to the Offer, consummate the Merger and pay all
related costs and expenses will be approximately $43.0 million. The Purchaser
will obtain such funds from Parent by means of capital contributions, loans or a
combination thereof. Parent plans to obtain the funds for such capital
contributions or loans from borrowings under Parent's credit facilities. See
Section 10.
 
     The information contained in this Offer to Purchase concerning the Company
was supplied by the Company, and Parent and the Purchaser take no responsibility
for the accuracy of such information. The information contained in this Offer to
Purchase concerning the Offer, the Merger, Parent and the Purchaser was supplied
by Parent and the Purchaser, and the Company takes no responsibility for the
accuracy of such information.
 
     THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
 
                                   THE OFFER
 
1. TERMS OF THE OFFER.
 
     Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and pay for all Shares validly tendered prior to the
Expiration Date and not theretofore withdrawn in accordance with Section 3 of
this Offer to Purchase. The term "Expiration Date" shall mean 12:00 Midnight,
New York City time, on Thursday, April 30, 1998, unless and until the Purchaser,
in accordance with the terms of the Merger Agreement, shall have extended the
period of time for which the Offer is open, in which event the term "Expiration
Date" shall mean the latest time and date at which the Offer, as so extended by
the Purchaser, shall expire.
 
     The Offer is conditioned upon, among other things, the satisfaction of the
Minimum Condition and the expiration or termination of all waiting periods
imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the regulations thereunder (the "HSR Act"). See Section 14. If such
conditions are not satisfied prior to the Expiration Date, the Purchaser
reserves the right (but shall not be obligated) to (i) decline to purchase any
of the Shares tendered and terminate the Offer, subject to the terms of the
Merger Agreement, (ii) waive any of the conditions to the Offer, to the extent
permitted by applicable law and the provisions of the Merger Agreement, and,
subject to complying with applicable rules and regulations of the Securities and
Exchange Commission (the "Commission"), purchase all Shares validly tendered or
(iii) extend the Offer and, subject to the right of shareholders to withdraw
Shares until the Expiration Date, retain the Shares which will have been
tendered during the period or periods for which the Offer is extended.
 
                                        3
<PAGE>   6
 
     Subject to the terms of the Merger Agreement, the Purchaser expressly
reserves the right, in its sole discretion, at any time or from time to time,
(i) to extend the Offer on one or more occasions beyond the then-scheduled
Expiration Date, if at the then-scheduled Expiration Date of the Offer any of
the conditions to Purchaser's obligation to accept for payment and pay for the
Shares have not been satisfied or waived, until such time as such conditions are
satisfied or waived, (ii) increase the Offer Price payable pursuant to the Offer
and extend the Offer for any period required by any rule, regulation,
interpretation or provision of the Commission or the staff thereof applicable to
the Offer, and (iii) extend the Offer on one occasion for a period of not more
than 20 business days beyond the latest Expiration Date that would otherwise be
permitted under clause (i) or (ii) of this sentence if there shall not have been
validly tendered and not withdrawn pursuant to the Offer at least 90% of the
then outstanding Shares. The rights reserved by the Purchaser in this paragraph
are in addition to the Purchaser's rights to terminate the Offer as described in
Section 14. Any extension, amendment or termination will be followed as promptly
as practicable by public announcement thereof, the announcement in the case of
an extension to be issued no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date in accordance
with the public announcement requirements of Rule 14d-4(c) under the Exchange
Act. Without limiting the obligation of the Purchaser under such Rule or the
manner in which the Purchaser may choose to make any public announcement, the
Purchaser currently intends to make announcements by issuing a release to the
Dow Jones News Service.
 
     The Merger Agreement provides that, without the prior written consent of
the Company, neither Parent nor the Purchaser will decrease the Offer Price or
change the form of consideration payable in the Offer, decrease the number of
Shares sought to be purchased pursuant to the Offer, change the conditions
described in Section 14, impose additional conditions to the Offer or amend any
other term of the Offer in any manner materially adverse to the holders of
Shares.
 
     If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its purchase of or
payment for Shares or is unable to pay for Shares pursuant to the Offer for any
reason, then, without prejudice to the Purchaser's rights under the Offer, the
Depositary may retain tendered Shares on behalf of the Purchaser, and such
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described in Section 3. However, the ability of
the Purchaser to delay the payment for Shares which the Purchaser has accepted
for payment is limited by Rule 14e-l(c) under the Exchange Act, which requires
that a bidder pay the consideration offered or return the securities deposited
by or on behalf of holders of securities promptly after the termination or
withdrawal of the Offer.
 
     If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the
Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in percentage of securities
sought, will depend upon the facts and circumstances then existing, including
the relative materiality of the changed terms or information. In a public
release, the Commission has stated that in its view an offer must remain open
for a minimum period of time following a material change in the terms of the
Offer and that waiver of a material condition, such as the Minimum Condition, is
a material change in the terms of the Offer. The release states that an offer
should remain open for a minimum of five business days from the date a material
change is first published, sent or given to security holders and that, if
material changes are made with respect to information not materially less
significant than the offer price and the number of shares being sought, a
minimum of ten business days may be required to allow adequate dissemination and
investor response. The requirement to extend the Offer will not apply to the
extent that the number of business days remaining between the occurrence of the
change and the then-scheduled Expiration Date equals or exceeds the minimum
extension period that would be required because of such amendment. As used in
this Offer to Purchase, "business day" has the meaning set forth in Rule 14d-1
under the Exchange Act.
 
     The Company has provided the Purchaser with the Company's shareholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related
                                        4
<PAGE>   7
 
Letter of Transmittal will be mailed by the Purchaser to record holders of
Shares and will be furnished by the Purchaser to brokers, dealers, banks and
similar persons whose names, or the names of whose nominees, appear on the
shareholder lists or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
 
2. PROCEDURE FOR TENDERING SHARES.
 
     Valid Tender. For Shares to be validly tendered pursuant to the Offer,
either (i) a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), together with any required signature guarantees, or in the
case of a book-entry transfer, an Agent's Message (as defined below), and any
other required documents, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date and either certificates for tendered Shares must be received by
the Depositary at one of such addresses or such Shares must be delivered
pursuant to the procedures for book-entry transfer set forth below (and a
Book-Entry Confirmation (as defined below) received by the Depositary), in each
case prior to the Expiration Date, or (ii) the tendering shareholder must comply
with the guaranteed delivery procedures set forth below.
 
     The Depositary will establish accounts with respect to the Shares at The
Depository Trust Company and the Philadelphia Depository Trust Company (each, a
"Book-Entry Transfer Facility" and, collectively, the "Book-Entry Transfer
Facilities") for purposes of the Offer within two business days after the date
of this Offer to Purchase. Any financial institution that is a participant in
any of the Book-Entry Transfer Facilities' systems may make book-entry delivery
of Shares by causing a Book-Entry Transfer Facility to transfer such Shares into
the Depositary's account in accordance with that Book-Entry Transfer Facility's
procedure for such transfer. However, although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message, and any other required documents must, in any case, be
transmitted to, and received by, the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
or the tendering shareholder must comply with the guaranteed delivery procedures
described below. The confirmation of a book-entry transfer of Shares into the
Depositary's account at a Book-Entry Transfer Facility as described above is
referred to herein as a "Book-Entry Confirmation." DELIVERY OF DOCUMENTS TO A
BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER
FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
 
     The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary 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 tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
 
     THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). 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.
 
     Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant in
any of the Book Entry Transfer Facilities' systems whose name appears on a
security position listing as the owner of the Shares) of Shares tendered
therewith and such registered holder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal or (ii) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature
 
                                        5
<PAGE>   8
 
Guarantee Program or the Stock Exchange Medallion Program (each, an "Eligible
Institution" and, collectively, "Eligible Institutions"). In all other cases,
all signatures on Letters of Transmittal must be guaranteed by an Eligible
Institution. See Instructions 1 and 5 to the Letter of Transmittal. If the
certificates for Shares are registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made or certificates
for Shares not tendered or not accepted for payment are to be returned to a
person other than the registered holder of the certificates surrendered, then
the tendered certificates for such Shares must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name or names of
the registered holders or owners appear on the certificates, with the signatures
on the certificates or stock powers guaranteed as aforesaid. See Instructions 1
and 5 to the Letter of Transmittal.
 
     Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's certificates for Shares are not immediately
available or the procedures for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such shareholder's tender may be
effected if all the following conditions are met:
 
          (i) such tender is made by or through an Eligible Institution;
 
          (ii) a properly completed and duly executed Notice of Guaranteed
     Delivery, substantially in the form provided by the Purchaser, is received
     by the Depositary, as provided below, prior to the Expiration Date; and
 
          (iii) the certificates for all physically tendered Shares, in proper
     form for transfer (or a Book-Entry Confirmation with respect to all such
     Shares), together with a properly completed and duly executed Letter of
     Transmittal (or facsimile thereof), with any required signature guarantees,
     or, in the case of a book-entry transfer, an Agent's Message, and any other
     required documents are received by the Depositary within three trading days
     after the date of execution of such Notice of Guaranteed Delivery. A
     "trading day" is any day on which The New York Stock Exchange, Inc. is open
     for business.
 
     The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
 
     Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for (or a timely Book-Entry
Confirmation with respect to) such Shares, (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message, and (iii) any other documents required by the Letter of Transmittal.
Accordingly, tendering shareholders may be paid at different times depending
upon when certificates for Shares or Book-Entry Confirmations with respect to
Shares are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE TO BE PAID BY THE PURCHASER FOR THE
SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
 
     The valid tender of Shares pursuant to one of the procedures described
above will constitute a binding agreement between the tendering shareholder and
the Purchaser upon the terms and subject to the conditions of the Offer.
 
     Appointment. By executing the Letter of Transmittal as set forth above, the
tendering shareholder will irrevocably appoint designees of the Purchaser, and
each of them, as such shareholder's attorneys-in-fact and proxies in the manner
set forth in the Letter of Transmittal, each with full power of substitution, to
the full extent of such shareholder's rights with respect to the Shares tendered
by such shareholder and accepted for payment by the Purchaser and with respect
to any and all other Shares or other securities or rights issued or issuable in
respect of such Shares on or after April 3, 1998. All such proxies will be
considered coupled with an interest in the tendered Shares. Such appointment
will be effective when, and only to the extent that, the Purchaser accepts for
payment Shares tendered by such shareholder as provided herein. Upon such
appointment, all prior powers of attorney, proxies and consents given by such
shareholder with respect to such Shares or other securities or rights will,
without further action, be revoked and no subsequent powers of attorney,
proxies, consents or revocations may be given by such shareholder (and, if
given, will not be deemed
                                        6
<PAGE>   9
 
effective). The designees of the Purchaser will thereby be empowered to exercise
all voting and other rights with respect to such Shares and other securities or
rights, including, without limitation, in respect of any annual, special or
adjourned meeting of the Company's shareholders, actions by written consent in
lieu of any such meeting or otherwise, as they in their sole discretion deem
proper. The Purchaser reserves the right to require that, in order for Shares to
be deemed validly tendered, immediately upon the Purchaser's acceptance for
payment of such Shares, the Purchaser must be able to exercise full voting,
consent and other rights with respect to such Shares and other related
securities or rights, including voting at any meeting of shareholders.
 
     Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser in its sole discretion, which determination
will be final and binding. The Purchaser reserves the absolute right to reject
any or all tenders of any Shares determined by it not to be in proper form or
the acceptance for payment of, or payment for which may, in the opinion of the
Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute
right, subject to the provisions of the Merger Agreement, to waive any of the
conditions of the Offer or any defect or irregularity in the tender of any
Shares of any particular shareholder, whether or not similar defects or
irregularities are waived in the case of other shareholders. No tender of Shares
will be deemed to have been validly made until all defects or irregularities
relating thereto have been cured or waived. None of the Purchaser, Parent, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification. The Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the instructions thereto) will be final and binding.
 
     Backup Withholding. In order to avoid "backup withholding" of U.S. federal
income tax on payments of cash pursuant to the Offer, a shareholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such shareholder's correct taxpayer identification number ("TIN") on a
Substitute Form W-9 and certify under penalties of perjury that such TIN is
correct and that such shareholder is not subject to backup withholding. If a
shareholder does not provide such shareholder's correct TIN or fails to provide
the certifications described above, the Internal Revenue Service (the "IRS") may
impose a penalty on such shareholder and payment of cash to such shareholder
pursuant to the Offer may be subject to backup withholding of 31%. All
shareholders surrendering Shares pursuant to the Offer should complete and sign
the main signature form and the Substitute Form W-9 included as part of the
Letter of Transmittal to provide the information and certification necessary to
avoid backup withholding (unless an applicable exemption exists and is proved in
a manner satisfactory to the Purchaser and the Depositary). Certain shareholders
(including, among others, all corporations and certain foreign individuals and
entities) are not subject to backup withholding. Foreign shareholders, if
exempt, should complete and sign the main signature form and a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 9 to the
Letter of Transmittal.
 
3. WITHDRAWAL RIGHTS.
 
     Except as otherwise provided in this Section 3, tenders of Shares are
irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant to
the procedures set forth below at any time prior to the Expiration Date and,
unless theretofore accepted for payment and paid for by the Purchaser pursuant
to the Offer, may also be withdrawn at any time after Tuesday, June 2, 1998.
 
     For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder of
the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates for Shares have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted to
the Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been delivered pursuant to the procedures
for book-entry transfer as set forth in Section 2, any notice of withdrawal must
also specify the name and number of the account at the appropriate Book-Entry
                                        7
<PAGE>   10
 
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with such Book-Entry Transfer Facility's procedures. Withdrawals of tenders of
Shares may not be rescinded, and any Shares properly withdrawn will thereafter
be deemed not validly tendered for purposes of the Offer. However, withdrawn
Shares may be retendered by again following one of the procedures described in
Section 2 any time on or prior to the Expiration Date.
 
     All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser in its sole
discretion, which determination will be final and binding. None of the
Purchaser, Parent, the Depositary, the Information Agent or any other person
will be under any duty to give notification of any defects or irregularities in
any notice of withdrawal or incur any liability for failure to give any such
notification.
 
4. ACCEPTANCE FOR PAYMENT AND PAYMENT.
 
     Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and will pay, promptly
after the Expiration Date, for all Shares validly tendered prior to the
Expiration Date and not properly withdrawn in accordance with Section 3. All
determinations concerning the satisfaction of such terms and conditions will be
within the Purchaser's discretion, which determinations will be final and
binding. See Sections 1 and 14. The Purchaser expressly reserves the right, in
its sole discretion, to delay acceptance for payment of or payment for Shares in
order to comply in whole or in part with any applicable law, including, without
limitation, the HSR Act. Any such delays will be effected in compliance with
Rule 14e-l(c) under the Exchange Act (relating to a bidder's obligation to pay
for or return tendered securities promptly after the termination or withdrawal
of such bidder's offer).
 
     In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates for
such Shares (or a timely Book-Entry Confirmation with respect thereto), (ii) a
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and (iii) any other documents required
by the Letter of Transmittal. The per Share consideration paid to any
shareholder pursuant to the Offer will be the highest per Share consideration
paid to any other shareholder pursuant to the Offer.
 
     For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares properly tendered to the Purchaser
and not withdrawn as, if and when the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance for payment of such Shares. Payment
for Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price therefor with the Depositary, which will act as agent for
tendering shareholders for the purpose of receiving payment from the Purchaser
and transmitting payment to tendering shareholders. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE TO BE PAID BY THE PURCHASER FOR THE
SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
 
     If the Purchaser is delayed in its acceptance for payment of, or payment
for, Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (including such rights as are set forth in Sections 1 and 14) (but
subject to compliance with Rule 14e-1(c) under the Exchange Act), the Depositary
may, nevertheless, on behalf of the Purchaser, retain tendered Shares, and such
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to exercise, and duly exercise, withdrawal rights as described in
Section 3.
 
     If any tendered Shares are not purchased pursuant to the Offer for any
reason, certificates for any such Shares will be returned, without expense to
the tendering shareholder (or, in the case of Shares delivered by book-entry
transfer of such Shares into the Depositary's account at a Book-Entry Transfer
Facility pursuant to the procedures set forth in Section 2, such Shares will be
credited to an account maintained at the appropriate Book-Entry Transfer
Facility), as promptly as practicable after the expiration or termination of the
Offer.
 
                                        8
<PAGE>   11
 
     Subject to the terms of the Merger Agreement, the Purchaser reserves the
right to transfer or assign, in whole or from time to time in part, to Parent,
or to one or more direct or indirect wholly-owned subsidiaries of Parent, the
right to purchase Shares tendered pursuant to the Offer, but any such transfer
or assignment will not relieve the Purchaser of its obligations under the Offer
and will in no way prejudice the rights of tendering shareholders to receive
payment for Shares validly tendered and accepted for payment pursuant to the
Offer.
 
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
 
     The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for U.S. federal income tax purposes and also may be a
taxable transaction under state, local or foreign tax laws. Accordingly, a
shareholder who tenders Shares in the Offer or receives cash in exchange for
Shares in the Merger will recognize gain or loss for federal income tax purposes
equal to the difference, if any, between the amount of cash received and the
shareholder's tax basis in the Shares sold. Gain or loss will be determined
separately for each block of Shares (i.e., Shares acquired at the same time and
price) exchanged pursuant to the Offer or the Merger. Such gain or loss
generally will be capital gain or loss if the Shares disposed of were held as
capital assets by the shareholder, and will be long-term capital gain or loss if
the Shares disposed of were held for more than one year at the date of sale or
the Expiration Date (in the case of the Offer) or on the date of the Merger (in
the case of the Merger), as the case may be. In addition, the Taxpayer Relief
Act of 1997 could affect the federal income tax consequences of the Offer and
Merger in that, among other things, it reduces the maximum rate of federal
income tax on capital gains of individual taxpayers for capital assets held more
than 18 months. Shares held less than one year may be subject to ordinary income
tax rates of up to 39.6% for individuals.
 
     The foregoing summary constitutes a general description of certain U.S.
federal income tax consequences of the Offer and the Merger without regard to
the particular facts and circumstances of each shareholder of the Company and is
based on the provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury Department Regulations issued pursuant thereto and published
rulings and court decisions in effect as of the date hereof, all of which are
subject to change, possibly with retroactive effect. Special tax consequences
not described herein may be applicable to certain shareholders subject to
special tax treatment (including insurance companies, tax-exempt organizations,
financial institutions or broker dealers, foreign shareholders and shareholders
who have acquired their Shares pursuant to the exercise of employee stock
options or otherwise as compensation). ALL SHAREHOLDERS SHOULD CONSULT THEIR TAX
ADVISORS WITH RESPECT TO SPECIFIC TAX EFFECTS APPLICABLE TO THEM OF THE OFFER
AND THE MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF THE ALTERNATIVE
MINIMUM TAX AND ANY STATE, LOCAL AND FOREIGN TAX LAWS.
 
                                        9
<PAGE>   12
 
6. PRICE RANGE OF SHARES; DIVIDENDS ON THE SHARES.
 
     The Shares are traded through the Nasdaq National Market under the symbol
"AWII". The following table sets forth, for each of the periods indicated, the
high and low sales prices per Share on the Nasdaq National Market.
 
<TABLE>
<CAPTION>
                                                                 HIGH      LOW
                                                                ------    -----
<S>                                                             <C>       <C>
1995:
  First Quarter.............................................    $ 9.50    $6.75
  Second Quarter............................................      7.75     6.00
  Third Quarter.............................................      7.00     6.13
  Fourth Quarter............................................      6.38     3.88
1996:
  First Quarter.............................................    $ 5.75    $3.88
  Second Quarter............................................      6.75     5.38
  Third Quarter.............................................      9.00     5.75
  Fourth Quarter............................................      9.75     8.13
1997:
  First Quarter.............................................    $10.75    $7.50
  Second Quarter............................................      8.75     6.63
  Third Quarter.............................................      7.38     5.50
  Fourth Quarter............................................      7.75     4.50
1998:
  First Quarter.............................................    $ 9.50    $4.63
  Second Quarter (through April 2)..........................      9.50     9.44
</TABLE>
 
     On March 27, 1998, the last full trading day prior to the announcement of
the execution of the Merger Agreement and of the Purchaser's intention to
commence the Offer, the closing sales price per Share as reported on the Nasdaq
National Market was $7.125. On April 2, 1998, the last full trading day prior to
the commencement of the Offer, the closing sales price per Share as reported on
the Nasdaq National Market was $9.44. SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT
MARKET QUOTATION FOR THE SHARES.
 
     The Company did not pay or declare any dividends for 1997, 1996 or 1995.
The Merger Agreement provides that, without the prior written consent of Parent,
the Company will not declare, set aside or pay any dividend on or make any other
distribution in respect of its capital stock. See Section 11.
 
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK QUOTATION; EXCHANGE
   ACT REGISTRATION;
   MARGIN REGULATIONS.
 
     Market for the Shares. The purchase of Shares pursuant to the Offer will
reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly and, depending upon the number of Shares so purchased,
could adversely effect the liquidity and market value of the remaining Shares
held by the public.
 
     Stock Quotation. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the requirements for continued
inclusion in the Nasdaq National Market, which requires that there be at least
200,000 shares publicly held, with a market value of at least $1,000,000, held
by at least 400 stockholders or 300 stockholders of round lots. Shares held
directly or indirectly by directors, officers or beneficial owners of more than
10% of the Shares are not considered as being publicly held for this purpose. If
the Nasdaq National Market were to cease to publish quotations for the Shares,
it is possible that the Shares would continue to trade in the over-the-counter
market and that prices or other quotations would be reported
 
                                       10
<PAGE>   13
 
by other sources. The extent of the public market for such Shares and the
availability of such quotations would depend, however, upon such factors as the
number of stockholders and/or the aggregate market value of such securities
remaining at such time, the interest in maintaining a market in the Shares on
the part of securities firms, the possible termination of registration under the
Exchange Act, as described below, and other factors.
 
     Margin Regulations. The Shares are presently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which status has the effect, among other things, of
allowing brokers to extend credit on the collateral of such securities.
Depending upon factors similar to those described above regarding listing and
market quotations, it is possible that, following the Offer, the Shares would no
longer constitute "margin securities" for the purposes of the margin regulations
of the Federal Reserve Board and therefore could no longer be used as collateral
for loans made by brokers.
 
     Exchange Act Registration. The Shares currently are registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
neither listed on a national securities exchange nor held by 300 or more holders
of record. Termination of registration of the Shares under the Exchange Act
would substantially reduce the information required to be furnished by the
Company to its shareholders and to the Commission and would make certain
provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b), the requirement of furnishing a proxy statement
pursuant to Section 14(a) in connection with shareholders' meetings and the
related requirement of furnishing an annual report to shareholders and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions, no longer applicable to the Company. Furthermore, the
ability of "affiliates" of the Company and persons holding "restricted
securities" of the Company to dispose of such securities pursuant to Rule 144 or
Rule 144A promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), may be impaired or eliminated. If registration of the Shares
under the Exchange Act were terminated, the Shares would no longer be "margin
securities" or be eligible for continued inclusion in the Nasdaq National
Market.
 
     If registration of the Shares is not terminated prior to the Merger, then
the Shares will cease to be reported on the Nasdaq National Market and the
registration of the Shares under the Exchange Act will be terminated following
the consummation of the Merger.
 
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
 
     Except as otherwise set forth herein, the information concerning the
Company contained in this Offer to Purchase, including financial information,
has been furnished by the Company or has been taken from or based upon publicly
available documents and records on file with the Commission and other public
sources. Neither the Purchaser nor Parent assumes any responsibility for the
accuracy or completeness of the information concerning the Company furnished by
the Company or contained in such documents and records or for any failure by the
Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information but which are unknown to the
Purchaser or Parent.
 
     General. The Company was originally incorporated in Michigan in 1915. It is
the successor to "Rose Patch and Label Company", and later "Rospatch
Corporation", which reflected the Company's original business, the production of
fabric patches and labels. In 1991, the name was changed to "Ameriwood
Industries International Corporation" which more closely identifies the Company
with its current core business, wood products. The Company's corporate offices
are located at 168 Louis Campau Promenade, Suite 400, Grand Rapids, Michigan,
49503, and its telephone number is (616) 336-9400.
 
     Principal Products. The Company manufacturers unassembled furniture, stereo
speaker cabinets and fully assembled speaker units, and is an original equipment
manufacturer of various laminated products used by other manufacturers for
incorporation into their own products. All Company-made products are
manufactured at two subsidiary facilities, both of which are located in the
United States. The Company sells its products through its own sales personnel
and through independent sales representatives who are assigned specific
territories or customers.
 
                                       11
<PAGE>   14
 
     The Company categorizes its furniture products as those of "Ameriwood
Furniture" and its stereo speaker cabinets and other products as those of
"Ameriwood Custom Solutions" (formerly "Ameriwood OEM").
 
     Ameriwood Furniture currently sells its unassembled furniture to office
superstores, mass merchant discount stores, home improvement centers, national
chains, catalog showrooms, home furnishings retailers, military exchanges and
warehouse clubs. Furniture products include office furniture, computer
furniture, wall units/organizers, storage units, wardrobes, bookcases, utility
carts, television and VCR stands, entertainment centers, home theater units and
kitchen and bedroom furniture.
 
     Ameriwood Custom Solutions produces stereo speaker cabinets and components.
These products are sold primarily to consumer electronics manufacturers,
including certain major audio component companies. In addition, Ameriwood Custom
Solutions sells custom products for the point of purchase and fixtures market,
for interactive kiosk cabinets, and for institutional uses. It also sells
Company-fabricated wood grain and opaque laminated particle board to a variety
of manufacturers for use in kitchen and bathroom cabinets, office partitions and
other furniture and building products.
 
     Selected Financial Information. Set forth below is certain selected
consolidated financial information relating to the Company and its subsidiaries
which has been excerpted or derived from the audited financial statements
contained in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 (the "Form 10-K"). More comprehensive financial information is
included in the Form 10-K and other documents filed by the Company with the
Commission. The financial information that follows is qualified in its entirety
by reference to such reports and other documents, including the financial
statements and related notes contained therein. Such reports and other documents
may be examined and copies may be obtained from the offices of the Commission in
the manner set forth below.
 
                 AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
 
                  SELECTED CONSOLIDATED FINANCIAL INFORMATION
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                                              FISCAL YEAR ENDED DECEMBER 31,
                                                             --------------------------------
                                                               1997        1996        1995
                                                             --------    --------    --------
<S>                                                          <C>         <C>         <C>
Income Statement Data:
  Net Sales..............................................    $ 94,553    $114,547    $105,998
  Operating Income (Loss)................................      (4,449)      1,549      (4,236)
  Net Income (Loss)......................................       2,524         480      (3,368)
  Basic Earnings (Loss) Per Share........................        0.59        0.11       (0.80)
  Weighted average shares outstanding....................       4,303       4,255       4,209
  Dividends per Share....................................          --          --          --
                                                             --------    --------    --------
</TABLE>
 
<TABLE>
<CAPTION>
                                                                  AT DECEMBER 31,
                                                                --------------------
                                                                  1997        1996
                                                                --------    --------
<S>                                                             <C>         <C>
Balance Sheet Data:
  Current Assets............................................    $ 33,515    $ 42,793
  Total Assets..............................................      57,800      66,506
  Current Liabilities.......................................       9,057      14,353
  Long-Term Debt............................................       5,000      11,600
  Shareholders' Equity......................................      41,103      37,969
</TABLE>
 
     The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Information as of particular
dates concerning the
 
                                       12
<PAGE>   15
 
Company's directors and officers, their remuneration, stock options granted to
them, the principal holders of the Company's securities and any material
interest of such persons in transactions with the Company is required to be
disclosed in proxy statements distributed to the Company's shareholders and
filed with the Commission. Such reports, proxy statements and other information
should be available for inspection at the public reference facilities maintained
by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and also should be available for inspection at the Commission's regional
offices located at Seven World Trade Center, 13th Floor, New York, New York
10048 and the Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such materials may also be obtained by mail, upon
payment of the Commission's customary fees, by writing to its principal office
at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. In addition,
such materials may be accessed electronically at the Commission's web site on
the internet at www.sec.gov.
 
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT.
 
     The Purchaser is a newly incorporated Delaware corporation organized in
connection with the Offer and the Merger and has not carried on any activities
other than in connection with the Offer and the Merger. The principal offices of
the Purchaser are located at 4750 Boulevard des Grandes Prairies, St. Leonard,
Quebec, Canada H1R 1A3. The Purchaser is an indirect wholly owned subsidiary of
Parent.
 
     Until immediately prior to the time that the Purchaser will purchase Shares
pursuant to the Offer, it is not anticipated that the Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions contemplated
by the Offer and the Merger. Because the Purchaser is newly formed and has
minimal assets and capitalization, no meaningful financial information regarding
the Purchaser is available.
 
     Parent is a Quebec, Canada corporation. Its principal offices are located
at 4750 Boulevard des Grandes Prairies, St. Leonard, Quebec, Canada H1R 1A3.
Parent is a vertically-integrated consumer products manufacturer and distributor
specializing in three product areas: ready-to-assemble ("RTA") furniture,
juvenile products, and home furnishings. Parent's products include a wide
variety of RTA furniture for home and office use; juvenile furniture and
accessories such as infant car seats, strollers, high chairs, toddler beds and
cribs; and home furnishings such as metal folding chairs, tables, bunk beds,
futons and step stools, as well as a mid-market line of case goods consisting of
bedroom sets, wall units and entertainment units.
 
     General Development of Parent's Business. Parent was founded in Montreal,
Quebec in 1962.
 
     In 1987, Parent completed an initial public offering in the Province of
Quebec and listed its common shares for trading on the Montreal Exchange.
 
     In 1988, Parent purchased Cosco, Inc. ("Cosco") of Columbus, Indiana, a
company involved in the production of children's furniture and accessories, as
well as the production of folding metal furniture.
 
     Dorel (U.K.) Ltd. ("Dorel (U.K.)") was established in 1988 to penetrate the
juvenile market in the United Kingdom and continental Europe. Parent originally
owned 75% of Dorel (U.K.) and acquired the remaining 25% interest in 1990 for
nominal consideration.
 
     In 1990, Parent acquired all of the shares of Charleswood Corporation
("Charleswood"), a manufacturer and distributor of RTA furniture located near
St. Louis, Missouri.
 
     Parent's common shares were listed on The Toronto Stock Exchange in 1990.
 
     In 1991, Cosco purchased the assets of Silgo International, a manufacturer
and distributor of children's wall hangings and decorative accessories based in
San Diego, California. The assets were used to establish Infantino, Inc.
("Infantino"), a subsidiary that manufactures and sells juvenile accessories.
 
     During 1993, Parent purchased the assets of Carol Ann Furniture of
Montreal, Quebec. The assets were used in 1994 to establish Leadra Design Inc.
("Leadra"), a subsidiary which manufactures and distributes a line of mid-priced
bedroom sets, wall units, tables and chairs.
 
                                       13
<PAGE>   16
 
     In 1994, Parent purchased Maxi-Miliaan B.V. ("Maxi-Miliaan"), an infant car
seat manufacturer and distributor based in the Netherlands. Maxi-Miliaan allows
Parent to more effectively penetrate the fragmented European market.
Maxi-Miliaan has established sales offices in France, Germany and Austria.
 
     Parent employs more than 2,900 people in nine countries. Major North
American facilities are located in Montreal, Quebec; Cornwall, Ontario;
Columbus, Indiana; Wright City, Missouri; Cartersville, Georgia; and San Diego,
California. Parent's major subsidiaries in the United States are Cosco and
Charleswood. European operations are carried out through Maxi-Miliaan in the
Netherlands and Dorel (U.K.) in the United Kingdom.
 
     Description of Parent's Business. RTA furniture is manufactured and
packaged as component parts and is assembled by the consumer. Parent's RTA
Furniture Segment produces office furniture, home office furniture, computer
tables, microwave stands, entertainment units and home theater units which are
marketed under the Charleswood and Ridgewood names. Parent's RTA Furniture
Segment accounted for 27.4% of Parent's sales in 1997.
 
     Parent's Juvenile Products Segment manufactures infant car seats,
strollers, high chairs, toddler beds, cribs, playpens, swings, infant carriers,
mobiles and accessories. These products are marketed under the brand names
Dorel, Cosco and Infantino in North America, and Maxi-Cosi in Europe. Although
Parent manufactures and sells juvenile products at all price levels, the primary
focus of its North American operations is on the development and marketing of
products at the entry and mid-range price points. Parent's products are designed
for middle-income family purchasers, whose priorities are safety and quality at
reasonable prices. Parent's largest customers, mass merchants Wal-Mart and
Kmart, sell primarily to this market. In Europe, Parent sells primarily high-end
juvenile products. Parent's Juvenile Products Segment accounted for 43.7% of
Parent's sales in 1997.
 
     Parent's Home Furnishings Segment produces metal folding furniture, bunk
beds and futons, step stools, metal and wood computer stands and case goods
furniture. These products are manufactured and distributed by Cosco, Leadra and
the Dorel Home Products division. In 1997, the Home Furnishings Segment
accounted for 28.9% of Parent's sales.
 
     In 1997, Parent effected 84% of its sales in the United States, 6% in
Canada and 10% in Europe and elsewhere.
 
     The name, citizenship, business address, principal occupation or
employment, and five-year employment history for each of the directors and
executive officers of the Purchaser and Parent and certain other information are
set forth in Schedule I hereto.
 
     Except as described in this Offer to Purchase, (i) none of the Purchaser,
Parent nor, to the best knowledge of the Purchaser and Parent, any of the
persons listed in Schedule I to this Offer to Purchase or any associate or
majority-owned subsidiary of the Purchaser, Parent or any of the persons so
listed, beneficially owns or has any right to acquire, directly or indirectly,
any Shares and (ii) none of the Purchaser, Parent nor, to the best knowledge of
the Purchaser and Parent, any of the persons or entities referred to above nor
any director, executive officer or subsidiary of any of the foregoing has
effected any transaction in the Shares during the past 60 days.
 
     Except as provided in the Merger Agreement and as otherwise described in
this Offer to Purchase, none of the Purchaser, Parent nor, to the best knowledge
of the Purchaser and Parent, any of the persons listed in Schedule I to this
Offer to Purchase, has any contract, arrangement, understanding or relationship
with any other person with respect to any securities of the Company, including,
but not limited to, any contract, arrangement, understanding or relationship
concerning the transfer or voting of such securities, joint ventures, loan or
option arrangements, puts or calls, guaranties of loans, guaranties against loss
or the giving or withholding of proxies. Except as set forth in this Offer to
Purchase, since December 31, 1994, neither the Purchaser nor Parent nor, to the
best knowledge of the Purchaser and Parent, any of the persons listed on
Schedule I hereto, has had any business relationship or transaction with the
Company or any of its executive officers, directors or affiliates that is
required to be reported under the rules and regulations of the Commission
applicable to the Offer. Except as set forth in this Offer to Purchase, since
December 31, 1994, there have
                                       14
<PAGE>   17
 
been no contacts, negotiations or transactions between any of the Purchaser,
Parent, or any of their respective subsidiaries or, to the best knowledge of The
Purchaser and Parent, any of the persons listed in Schedule I to this Offer to
Purchase, on the one hand, and the Company or its affiliates, on the other hand,
concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, an election of directors or a sale or other transfer
of a material amount of assets.
 
10. SOURCE AND AMOUNT OF FUNDS.
 
     The total amount of funds required by the Purchaser to consummate the Offer
and the Merger and to pay related fees and expenses is estimated to be
approximately $43.0 million. The Purchaser will obtain all of such funds from
working capital and available funds under new credit facilities of Parent.
Parent has definitive commitments for approximately $63,000,000 of financing
under two credit facilities. Parent has a definitive commitment for a
$33,000,000 unsecured guaranteed revolving credit facility among Dorel
Investment L.P., ("Dorel Investment") as borrower, Parent and its material
subsidiaries, as guarantors, and Royal Bank of Canada ("RBC"), as agent for a
syndicate of banks. The facility will have a term of two years. Loans under the
facility will bear interest at either (i) LIBOR plus a margin determined by a
ratio of indebtedness to EBITDA or (ii) the higher of RBC's Prime Rate and the
sum of (x) one half of one percent and (y) the effective federal funds rate.
Under the credit facility, Parent will be required to maintain certain financial
ratios and level of net worth, and future indebtedness and dividends, as well as
Parent's ability to secure future obligations, among other things, will be
restricted. Parent also has a definitive commitment from Teachers Insurance and
Annuity Association and Prudential Capital Corp. to purchase $30,000,000
aggregate principal amount of notes issued by Dorel Investment and guaranteed by
Parent and certain of its subsidiaries. The term of the notes will be 10 years
and they will bear interest at a rate of 115 basis points over 7-year U.S.
Treasury Bonds. Parent will be required to maintain certain financial ratios and
level of net worth, and, among other things, Parent's ability to incur secured
debt will be restricted. Purchaser also will obtain funds from Parent's lines of
credit and other short term borrowing arrangements. It is anticipated that any
borrowings under these facilities will be repaid by the Purchaser from
internally generated funds and/or public or private financings of Parent and the
Company.
 
11. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER AGREEMENT AND
    RELATED AGREEMENTS.
 
BACKGROUND OF THE OFFER
 
     The following description was prepared by Parent and the Company.
Information about the Company was provided by the Company and neither the
Purchaser nor Parent takes any responsibility for the accuracy or completeness
of any information regarding meetings or discussions in which the Purchaser,
Parent or their representatives did not participate.
 
     The RTA furniture industry, while exhibiting growth above the general
economy, is very competitive and in recent years has experienced intensified
competition. There has been consolidation of both industry participants and
customers, and in addition, there have been technological advances in production
allowing for greater production efficiencies and expanded capabilities. The
largest industry participants significantly influence the competitiveness of the
industry by their manufacturing capacity and efficiency as well as their
economies of scale in servicing customers. In view of this industry environment,
in September 1996, management of the Company began work on a three year
strategic plan (the "Plan") which was then presented to the Board in November
1996. Following review of the Plan, the Board decided that a further study of
the Company's capital expenditure needs was required and a consultant for such
study was retained. The consultant rendered a preliminary report in February
1997 and, at the meeting of the Board in April 1997, the final report was
submitted and reviewed. Also at the meeting, management of the Company reported
on recent developments in the industry and the Company's position in the
industry.
 
     From May 1997 through August 1997, management of the Company and the Board
commenced a thorough reexamination of the Company's Plan and its implementation.
The reexamination of the Plan indicated that while the Company had made progress
in increasing its manufacturing capabilities and raising productivity, the
Company's long-term competitive position was nonetheless subject to substantial
risks. In
 
                                       15
<PAGE>   18
 
particular, substantial capital expenditures would be required to keep the
Company competitive in an environment of significantly larger industry
participants, with greater financial resources than the Company, pursuing a
consolidating customer base. As a result, the Board and the Company's management
determined that the Company should conduct a systematic review of its strategic
alternatives, including alternatives to remaining an independent company, in
order to increase shareholder value.
 
     At the Board meeting held in August, the Board authorized senior management
to contact outside financial advisors with respect to the consideration and
implementation of possible strategic alternatives for the Company. In October
1997, ABN AMRO was retained. During the period from October through November
1997, ABN AMRO approached a number of companies on a confidential basis to
discuss their interest in entering into a strategic transaction with the
Company. Certain of these companies, including Parent, entered into
confidentiality and standstill agreements with the Company and received
financial and other information regarding the Company in order to conduct a due
diligence review.
 
     In December 1997, the Company's senior management and representatives of
ABN AMRO reported to the Board the results of their preliminary discussions with
potential strategic partners, including preliminary indications of interest in
pursuing a transaction from three of these potential strategic partners.
 
     From January through February 1998, these three potential strategic
partners continued to conduct their due diligence review, which included tours
of Company facilities and presentations by senior management of the Company.
During this period, ABN AMRO was notified by one of the parties that it no
longer was interested in pursuing a strategic relationship with the Company. On
February 12, 1998, the Board held a special meeting to explore further the
Company's strategic and financial alternatives. The Company's senior management
and representatives of ABN AMRO reported to the Board the status of discussions
with the remaining two potential strategic partners.
 
     During the last two weeks of February 1998 and the first two weeks of March
1998, the two potential strategic partners and their respective representatives
and legal advisors reviewed due diligence documents and had numerous discussions
with senior management of the Company.
 
     During the week of March 9, 1998, representatives of ABN AMRO indicated to
each of the potential strategic partners that, although no determination had
been made to sell the Company, the Company was willing to consider proposals
related to potential transactions with the Company and requested that proposals
be submitted on March 12, 1998. On March 12, 1998, the Company received and
initially evaluated proposals from the two parties. After the Company further
reviewed the proposals with its legal and financial advisors at a Board meeting
on March 13, 1998, the Company's financial and legal advisors contacted the
parties to clarify and discuss their proposals and resolve due diligence items
which remained open. On March 23, 1998, ABN AMRO contacted the two parties to
solicit revised proposals on March 24, 1998. After receiving and evaluating
revised proposals on March 24, 1998, ABN AMRO contacted the interested parties
to solicit their best proposals by March 26, 1998.
 
     On March 26, 1998, a meeting of the Board was held in Chicago. After a
presentation by ABN AMRO to the Board, the terms of the proposed transactions
and related merger agreements were presented to and reviewed by the Board. The
Board analyzed and discussed the proposed transactions and agreements. Following
the meeting, the Company's financial advisors contacted each of the interested
parties to confirm that both parties had submitted their best and final
proposals. Parent later submitted a revised proposal and the other interested
party advised representatives of ABN AMRO that its previous proposal constituted
its best and final proposal. Negotiations with Parent continued, culminating in
the Company and Parent agreeing upon a form of definitive agreement to be
presented for review by the Board at a meeting scheduled for March 27, 1998.
 
     On March 27, 1998, at a meeting of the Board, the terms of the proposed
transaction with Parent and the Merger Agreement were presented to and reviewed
by the Board. ABN AMRO made a presentation to the Board and delivered its
opinion as to the fairness of the $9.625 per Share cash consideration to be
received in the Offer and the Merger by the holders of outstanding Shares. The
Board analyzed and discussed the Offer, the Merger Agreement and the Merger and
reviewed proposed resolutions related to the transaction. After
 
                                       16
<PAGE>   19
 
discussion and further analysis, the Board unanimously recommended that all
holders of Shares accept the Offer and tender their Shares pursuant to the
Offer. With respect to the Merger, the Board unanimously recommended that, if a
shareholder vote is required by applicable law, the shareholders of the Company
vote in favor of approval and adoption of the Merger Agreement and the Merger. A
copy of a press release announcing the transaction has been filed with the
Commission as an exhibit to the Schedule 14D-1 and is incorporated herein by
reference.
 
     In approving the Merger Agreement and the transactions contemplated thereby
and recommending that all holders of Shares tender their Shares pursuant to the
Offer, the Board considered a number of factors including:
 
          (i) the terms of the Merger Agreement;
 
          (ii) presentations by the President and Chief Executive Officer of the
     Company and the Company's financial advisors (at such meeting and at
     previous Board meetings) regarding the financial condition, results of
     operations, capital expenditure needs and business and prospects of the
     Company, including the prospects if the Company were to remain independent;
 
          (iii) the results of the process undertaken to identify and solicit
     indications of interest from third parties to enter into a strategic
     transaction with the Company;
 
          (iv) the trading price of the Shares over the last three years and
     that the $9.625 per Share Offer price represents a premium of approximately
     50% over the closing sales price for the Shares on the Nasdaq National
     Market on March 26, 1998, the last trading day prior to the date of
     execution of the Merger Agreement;
 
          (v) the presentation of ABN AMRO at the March 26 and March 27, 1998
     Board meetings and the opinion of ABN AMRO to the effect that, as of the
     date of the opinion, the $9.625 per Share cash consideration to be received
     by the holders of the Shares in the Offer and the Merger is fair to such
     holders, from a financial point of view; a copy of the opinion of ABN AMRO
     is contained in the Schedule 14D-9;
 
          (vi) that the Merger Agreement permits the Company to furnish
     nonpublic information and access in response to unsolicited proposals by
     third parties pursuant to confidentiality agreements, and to participate in
     discussions and negotiations with any third party making a proposal to
     submit an Acquisition Proposal (as hereinafter defined) to the Company, if
     the Board determines in good faith, after consultation with ABN AMRO or
     another financial adviser of nationally recognized standing, that such
     third party is reasonably likely to submit an Acquisition Proposal which is
     a Superior Proposal (as hereinafter defined) and determines in good faith,
     based upon advice of outside legal counsel, that the failure to take any of
     such actions is reasonably likely to be inconsistent with the Board's
     fiduciary duties under applicable law;
 
          (vii) the termination provisions of the Merger Agreement, which were a
     condition to Parent's proposal, providing that Parent could be entitled to
     (x) a fee of $1.5 million and (y) reimbursement of expenses up to $1.5
     million upon the termination of the Merger Agreement under certain
     circumstances, including the modification or withdrawal of the Board's
     recommendation to the shareholders with respect to the Offer and the
     Merger; and
 
          (viii) the Board's belief, based in part on the factors referred to
     above, including the significant changes that have occurred in the RTA
     furniture industry, that the combined company would have the economies of
     scale to make the capital expenditures and achieve the operating
     efficiencies required to respond effectively to the needs of customers and
     markets and the increased competitiveness of the RTA furniture industry.
 
     The foregoing discussion of the information and factors considered and
given weight by the Board is not intended to be exhaustive. In view of the
variety of factors considered in connection with its evaluation of the Offer,
the Board did not find it practicable to and did not quantify or otherwise
assign relative weights to the specific factors considered in reaching its
determinations and recommendation. In addition, individual
                                       17
<PAGE>   20
 
members of the Board may have given different weight to different factors. The
Board viewed its position and recommendation as being based on the totality of
the information presented to and considered by it.
 
MERGER AGREEMENT
 
     The following is a summary of certain provisions of the Merger Agreement.
The summary is qualified in its entirety by reference to the Merger Agreement
which is incorporated herein by reference and a copy of which has been filed
with the Commission as an exhibit to the Schedule 14D-1. The Merger Agreement
may be examined and copies may be obtained at the places and in the manner set
forth in Section 8 of this Offer to Purchase. Capitalized terms used but not
defined in this summary of the Merger Agreement have the meanings given to such
terms in the Merger Agreement.
 
     The Offer. The Merger Agreement provides that the Purchaser will commence
the Offer and that, upon the terms and subject to the prior satisfaction or
waiver of the conditions of the Offer, the Purchaser will purchase all Shares
validly tendered and not properly withdrawn pursuant to the Offer as soon as
legally permitted after the expiration date of the Offer. The Merger Agreement
provides that, without the prior written consent of the Company, neither the
Purchaser nor Parent may decrease the price per Share, decrease the number of
Shares sought to be purchased in the Offer, or amend any other condition of the
Offer in any manner adverse to the holders of the Shares. The Purchaser shall,
on the terms and subject to the prior satisfaction or waiver of the conditions
of the Offer, accept for payment and pay for the Shares validly tendered as soon
as practicable after it is legally permitted to do so under applicable law;
provided, however, that if, immediately prior to the initial expiration date of
the Offer (as it may be extended), the Shares tendered and not withdrawn
pursuant to the Offer, when added to Shares already owned by the Purchaser and
Parent, equals less than 90% of the outstanding Shares, the Purchaser may extend
the Offer one time for a period not to exceed twenty business days,
notwithstanding that all conditions to the Offer are satisfied as of such
expiration date of the Offer.
 
     Board of Directors. Promptly upon the purchase of Shares by the Purchaser
and from time to time thereafter, the Purchaser shall be entitled to designate
up to such number of directors, rounded up to the next whole number, on the
Board as is equal to the number of directors which is the product of (i) the
total number of directors on the Board (giving effect to the directors
designated by the Purchaser pursuant to this sentence) multiplied by (ii) the
percentage that the aggregate number of Shares beneficially owned by the
Purchaser or any affiliate of the Purchaser following such purchase bears to the
total number of Shares then outstanding. In furtherance thereof, the Company
shall, at such time, promptly take all actions necessary to cause Purchaser's
designees to be elected as directors of the Company including increasing the
size of its Board or securing the resignations of such number of its incumbent
directors, or both. At such time, the Company shall use its best efforts to
cause persons designated by the Purchaser to constitute at least the same
percentage (rounded up to the next whole number) as is on the Board of each
committee of the Board, each board of directors of each of the Company's
subsidiaries and each committee of such board, in each case to the extent
permitted by law. Notwithstanding the foregoing, the Company shall have at least
one independent director until the Effective Time. In the Merger Agreement, the
Company has agreed to promptly take all actions required pursuant to Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order to
fulfill its obligations under the Merger Agreement, including mailing to
shareholders the information required by such Section 14(f) and Rule 14f-1 as is
necessary to enable the Purchaser's designees to be elected to the Board. The
Purchaser or Parent will supply the Company and be solely responsible for any
information with respect to either of them and their nominees, officers,
directors and affiliates required by such Section 14(f) and Rule 14f-1.
 
     The Merger. The Merger Agreement provides that, subject to the terms and
conditions thereof and in accordance with the MBCA and the DGCL, at the
Effective Time, the Purchaser will be merged with and into the Company.
Following the Merger, the separate corporate existence of the Purchaser will
cease and the Company will continue as the surviving corporation (the "Surviving
Corporation"). The Merger shall be effected by the filing at the time of Closing
of properly executed Articles of Merger or Certificate of Merger, as
appropriate, or other appropriate documents with the Corporation, Securities and
Land Development
 
                                       18
<PAGE>   21
 
Bureau of the Michigan Department of Corporations and Industries Services and
the Secretary of State of the State of Delaware.
 
     The Merger Agreement provides that, at the Effective Time, by virtue of the
Merger and without any action on the part of Parent, the Purchaser, the Company
or the holders thereof the Shares will be converted into the right to receive
the Offer Price in cash, without interest thereon, as soon as is reasonably
practicable upon surrender of the certificate(s) formerly representing such
Shares (other than any Shares owned by the Purchaser or by any affiliate of the
Purchaser or Shares in the treasury of the Company, or in the treasury of any
wholly-owned subsidiary of the Company, which Shares, by virtue of the Merger
and without any action on the part of the holder thereof, shall be cancelled and
retired and shall cease to exist with no payment being made with respect
thereto). At the Effective Time, each share of common stock, par value $.01 per
share, of the Purchaser issued and outstanding immediately prior to the
Effective Time will, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into and become one validly issued, fully
paid and nonassessable share of common stock, par value $1.00 per share, of the
Surviving Corporation.
 
     The Merger Agreement provides that the Articles of Incorporation of the
Purchaser, as in effect immediately prior to the Effective Time, will be the
Articles of Incorporation of the Surviving Corporation, until thereafter amended
in accordance with the provisions thereof and applicable law. The By-Laws of the
Purchaser in effect at the Effective Time will be the By-Laws of the Surviving
Corporation, until thereafter amended in accordance with the provisions thereof
and applicable law.
 
     Vote Required to Approve the Merger. Pursuant to the Merger Agreement, the
Company will, if required by applicable law in order to consummate the Merger,
duly call, give notice of, convene and hold a special meeting of its
shareholders (the "Special Meeting") as soon as practicable following the
acceptance for payment and purchase of Shares by Parent or its affiliates
pursuant to the Offer for the purpose of considering and taking action upon the
Merger Agreement. The Merger Agreement provides that the Company will, if
required by applicable law in order to consummate the Merger, prepare and file
with the Commission a definitive proxy statement (the "Proxy Statement")
relating to the Merger and the Merger Agreement and cause such Proxy Statement
to be mailed to its shareholders, provided that no amendment or supplement to
the Proxy Statement will be made by the Company without consultation with Parent
and its counsel. If the Purchaser acquires at least a majority of the
outstanding Shares, the Purchaser will have sufficient voting power to approve
the Merger, even if no other shareholder votes in favor of the Merger.
 
     The Merger Agreement provides that in the event that the Purchaser acquires
at least 90% of the outstanding Shares pursuant to the Offer, the Tender
Agreements or otherwise, the Purchaser and the Company will take all necessary
and appropriate action to cause the Merger to become effective as soon as
practicable after such acquisition, without a meeting of shareholders of the
Company, in accordance with the MBCA and the DGCL.
 
     Conditions to the Merger. The respective obligations of Parent, the
Purchaser and the Company to consummate the Merger and the transactions
contemplated thereby are subject to the satisfaction, at or before the Effective
Time, of certain conditions, including: (i) if required, the shareholders of the
Company shall have duly approved the transactions contemplated by the Merger
Agreement; (ii) any waiting period applicable to the Merger under the HSR Act
shall have expired or been terminated; (iii) the consummation of the Merger
shall not be restrained, enjoined or prohibited by any order, judgment, decree,
injunction or ruling of a court of competent jurisdiction or any governmental
entity and there shall not have been any statute, rule or regulation enacted,
promulgated or deemed applicable to the Merger by any governmental entity which
prevents the consummation of the Merger; (iv) all authorizations, approvals or
consents required to permit the Merger shall have been obtained; and (v) the
Purchaser or its permitted assignee shall have purchased all Shares validly
tendered and not withdrawn pursuant to the Offer (however, this condition is not
applicable to the obligations of Parent or the Purchaser if the Purchaser fails
to purchase Shares tendered pursuant to the Offer in violation of the terms of
the Merger Agreement or the Offer).
 
     Representations and Warranties. The Merger Agreement contains various
representations of the parties thereto, including representations by the Company
as to, among other things, (i) organization; (ii) capitalization; (iii)
authorization and validity of the Merger Agreement and necessary action;
                                       19
<PAGE>   22
 
(iv) consents and approvals; (v) SEC reports and financial statements; (vi)
undisclosed liabilities; (vii) absence of certain changes; (viii) disclosure
documents; (ix) employee benefit plans and ERISA; (x) litigation; (xi)
compliance with existing laws; (xii) taxes; (xiii) real property; (xiv)
intellectual property; (xv) contracts; (xvi) environmental laws and regulations;
(xvii) labor matters; (xviii) brokers or finders; (xix) opinion of financial
advisors; (xx) Board recommendation; (xxi) insurance; and (xxii) permits.
 
     Covenants. Pursuant to the Merger Agreement, the Company has covenanted and
agreed that unless Parent shall otherwise agree in writing, the Company shall,
and shall cause each of its subsidiaries to, conduct its operations in the
ordinary and usual course of business consistent with past practice and use all
reasonable efforts to preserve intact their respective business organizations'
goodwill, keep available the services of their respective present officers and
key employees, and preserve the goodwill and business relationships with
suppliers, distributors, customers and others having business relationships with
them. Without limiting the generality of the foregoing, and except as otherwise
permitted by the Merger Agreement or as required by applicable law, rule or
regulation prior to the Effective Time, without the consent of Parent, which
consent shall not be unreasonably withheld, the Company will not, and will cause
each of its subsidiaries not to: (a) amend or propose to amend their respective
charters or bylaws; or split, combine or reclassify their outstanding capital
stock or declare, set aside or pay any dividend or distribution in respect of
any capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for, shares of its
capital stock, except for cash dividends and cash distributions paid by
subsidiaries to other subsidiaries or to the Company; (b) (i) issue or authorize
or propose the issuance of, sell, pledge or dispose of, or agree to issue or
authorize or propose the issuance of, sell, pledge or dispose of, any additional
shares of, or any options, warrants or rights of any kind to acquire any shares
of, their capital stock of any class, any debt or equity securities convertible
into or exchangeable for such capital stock or any other equity related right
(including any phantom stock or stock appreciation rights ("SARs")), other than
any such issuance pursuant to options, warrants, rights or convertible
securities outstanding as of the date of the Merger Agreement; (ii) acquire or
agree to acquire by merging or consolidating with, or by purchasing a
substantial equity interest in or a substantial portion of the assets of, or by
any other manner, any business or any corporation, partnership, association or
other business organization or division thereof or otherwise acquire or agree to
acquire any assets, in each case which are material, individually or in the
aggregate, to the Company and its subsidiaries taken as a whole; (iii) sell
(including by sale-leaseback), lease, pledge, dispose of or encumber any assets
or interests therein, which are material, individually or in the aggregate, to
the Company and its subsidiaries taken as a whole, other than in the ordinary
course of business and consistent with past practice; (iv) incur or become
contingently liable with respect to any material indebtedness for borrowed money
or guarantee any such indebtedness or issue any debt securities or otherwise
incur any material obligation or liability (absolute or contingent) other than
short-term indebtedness in the ordinary course of business and consistent with
past practice; (v) redeem, purchase, acquire or offer to purchase or acquire any
(x) shares of its capital stock or (y) long-term debt other than as required by
governing instruments relating thereto; (vi) other than in the ordinary course
of business, neither the Company nor any Company subsidiary shall modify, amend
or terminate any material contract or agreement to which the Company or any
Company subsidiary is a party or waive, release or assign any material rights or
claims; or (vii) enter into any contract, agreement, commitment or arrangement
with respect to any of the foregoing; (c) enter into or amend any employment,
severance, special pay arrangement with respect to termination of employment or
other arrangements or agreements with any directors, officers or key employees
except for (i) normal salary increases and merit bonuses, (ii) arrangements in
connection with employee transfers or (iii) agreements with new employees, in
each case, in the ordinary course of business and consistent with past practice;
(d) adopt, enter into or amend any, or become obligated under any new bonus,
profit sharing, compensation, stock option, pension, retirement, deferred
compensation, healthcare, employment or other employee benefit plan, agreement,
trust, fund or arrangement for the benefit or welfare of any employee or
retiree, except as required to comply with changes in applicable law occurring
after the date hereof; (e) except as may be required as a result of a change in
law or in generally accepted accounting principles after the date hereof, change
any of the accounting principles or practices used by it; (f) pay, discharge or
satisfy any material claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction in the ordinary course of business of liabilities
reflected or reserved against in, or contemplated by,
 
                                       20
<PAGE>   23
 
the financial statements (or the notes thereto) of the Company incurred in the
ordinary course of business consistent with past practice; (g) authorize, commit
to or make any equipment purchases or capital expenditures other than in the
ordinary course of business and consistent with past practice (provided, that
such purchases and/or expenditures shall, in the aggregate, be no more than
$250,000) or as set forth in the Merger Agreement; or (h) take or agree to take
any of the foregoing actions or any action that would, or is reasonably likely
to, result in any of its representations and warranties set forth in the Merger
Agreement becoming untrue, or in any of the conditions to the Merger Agreement
set forth in the Merger Agreement not being satisfied.
 
     No Solicitations. The Company has agreed that it will not, and will cause
any officers, directors, employees and investment bankers, attorneys or other
agents retained by the Company or any of its subsidiaries not to, (i) directly
or indirectly solicit, initiate or knowingly encourage (including by way of
furnishing non-public information), or take any other action knowingly to
facilitate any inquiries or the making of any Acquisition Proposal (as
hereinafter defined), or (ii) except as permitted below, engage in negotiations
or discussions with, or furnish any information or data to any third party
relating to, or that may be reasonably be expected to lead to, an Acquisition
Proposal (other than the transactions contemplated hereby). Notwithstanding
anything to the contrary contained in the Merger Agreement, the Company, and its
officers, directors, investment bankers, attorneys or agents, may: (a)
participate in discussions or negotiations (including, as a part thereof, making
any counterproposal) with or furnish information to any third party making an
unsolicited Acquisition Proposal (a "Potential Acquiror") if: (1) the Board
determines in good faith, after consultation with ABN AMRO or another financial
advisor of nationally recognized standing, that such third party is reasonably
likely to submit an Acquisition Proposal, which is a Superior Proposal (as
hereinafter defined), and (2) the Board determines in good faith, based upon
advice of outside legal counsel, that the failure to participate in such
discussions or negotiations or to furnish such information is reasonably likely
to be inconsistent with the Board's fiduciary duties under applicable law, or
(b) following receipt of an Acquisition Proposal, disclose to its shareholders
the Company's position contemplated by Rules 14d-9 and 14e-2 under the Exchange
Act or otherwise make any other necessary disclosure to its shareholders related
to an Acquisition Proposal.
 
     The Company has agreed that, as of March 27, 1998, it shall immediately
cease and cause to be terminated any existing activities, discussions or
negotiations with any parties (other than the Purchaser and Parent conducted
heretofore with respect to any of the foregoing). The Company has agreed not to
release any third party from any confidentiality or standstill agreement to
which the Company is a party. The Company also has agreed that any non-public
information furnished to a Potential Acquiror will be pursuant to a
confidentiality agreement substantially similar to the confidentiality
provisions of the confidentiality agreement entered into between the Company and
Parent. The Company further has agreed that in the event that the Company shall
receive any Acquisition Proposal, it shall promptly inform Parent in writing as
to the terms of such Acquisition Proposal, and if the Acquisition Proposal is in
writing the Company shall provide the Parent a true and complete copy thereof,
and will keep Parent reasonably informed of the status (including amendments or
proposed amendments) of any such Acquisition Proposal, except to the extent that
the Board determines in good faith, after consultation with its outside legal
counsel, that any such action with respect to a Superior Proposal that by its
terms expressly prohibits any disclosure of the terms of such Superior Proposal
and described in this sentence is reasonably likely to be inconsistent with the
Board's fiduciary duties under applicable law. As used herein, "Acquisition
Proposal" shall mean any bona fide proposal made by a third party to acquire (i)
beneficial ownership (as defined under Rule 13(d) of the Exchange Act) of a 15%
or greater equity interest in the Company pursuant to a merger, consolidation or
other business combination, sale of shares of capital stock, tender offer or
exchange offer or similar transaction involving the Company including, without
limitation, any single or multi-step transaction or series of related
transactions which is structured in good faith to permit such third party to
acquire beneficial ownership of a 15% or greater equity interest in the Company
or (ii) all or a substantial part of the business or assets or any equity
interest in, or voting securities of, of the Company (other than the
transactions contemplated by the Merger Agreement). As used herein, "Superior
Proposal" means any Acquisition Proposal which the Board determines in good
faith, after consultation with ABN AMRO or another financial advisor of
nationally recognized standing, to be
 
                                       21
<PAGE>   24
 
more favorable to such party and its shareholders than the transactions
contemplated by the Merger Agreement.
 
     Termination; Fees and Expenses. The Merger Agreement provides that it may
be terminated and the Merger and the other transactions contemplated thereby may
be abandoned at any time prior to the Effective Time, notwithstanding any
requisite approval and adoption of the Merger Agreement and the transactions
contemplated thereby by the shareholders of the Company: (a) by mutual written
consent of the Company, Parent and the Purchaser; (b) by either of the Company,
on the one hand, or Parent and the Purchaser, on the other hand: (i) if the
Effective Time shall not have occurred on or prior to September 30, 1998;
provided, however, that the right to terminate the Merger Agreement under
Section 8.1(b)(i) of the Merger Agreement shall not be available to any party
whose failure to fulfill any obligation under the Merger Agreement has been the
cause of, or resulted in, the failure of the Merger to occur on or prior to such
date; (ii) if there shall have been issued an order, decree or ruling or taken
any other action (which order, decree ruling or other action the parties hereto
shall use their respective best efforts to lift), in each case permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
the Merger Agreement and such order, decree, ruling or other action shall have
become final and non-appealable; provided, however, if the party seeking
termination is Parent, Parent shall have complied fully with its obligations
under Section 6.9 of the Merger Agreement, or (iii) if, at the Special Meeting
(including any adjournment or postponement thereof) called pursuant to the
Merger Agreement, the requisite vote of the shareholders of the Company for the
Merger shall not have been obtained; (c) by the Company: (i) upon two days prior
written notice if the Board shall have (A) withdrawn, modified or changed in a
manner adverse to Parent its approval or recommendation of the Merger Agreement,
the Offer or the Merger or resolved to do any of the foregoing and (B) (x)
determined in good faith, after consultation with a ABN AMRO or another
financial advisor of nationally recognized standing, that a third party has
submitted to the Company an Acquisition Proposal which is a Superior Proposal,
and (y) determined in good faith, upon the advice of outside legal counsel, that
the failure to take such action as set forth in the preceding clause (A) is
reasonably likely to be inconsistent with the Board's fiduciary duties under
applicable law; (ii) if Parent or the Purchaser (x) breaches or fails in any
material respect to perform or comply with any of its material covenants and
agreements contained herein or (y) breaches its representations and warranties
in any material respect and such breach would have a Parent Material Adverse
Effect (as hereinafter defined), in each case such that the conditions set forth
in the Merger Agreement would not be satisfied; provided, however, that if any
such breach is curable by Parent or the Purchaser through the exercise of
Parent's or the Purchaser's best efforts and for so long as Parent or the
Purchaser shall be so using its best efforts to cure such breach, the Company
may not terminate the Merger Agreement pursuant to the Merger Agreement; (iii)
upon approval of the Board, if due to an occurrence or circumstance that would
result in a failure to satisfy any of the conditions set forth in Annex A to the
Merger Agreement, Merger Sub shall have failed to commence the Offer on or prior
to five days following the date of initial public announcement of the Merger
Agreement; provided, however, the Company may not terminate the Merger Agreement
if the Company is at such time in breach of its obligations under the Merger
Agreement; (d) by Parent and the Purchaser: (i) if the Company (x) breaches or
fails in any material respect to perform or comply with any of its material
covenants and agreements contained in the Merger Agreement or (y) breaches its
representations and warranties in any material respect and such breach would
have a Company Material Adverse Effect (as hereinafter defined), in each case
such that the conditions set forth in the Merger Agreement would not be
satisfied; provided, however, that if any such breach is curable by the Company
through the exercise of the Company's best efforts and for so long as the
Company shall be so using its best efforts to cure such breach, Parent and the
Purchaser may not terminate the Merger Agreement pursuant to the Merger
Agreement; (ii) if the Board shall have withdrawn, modified or changed in a
manner adverse to Parent its approval or recommendation of the Merger Agreement,
the Offer or the Merger or shall have recommended an Acquisition Proposal
involving the Company or shall have executed an agreement in principal or
definitive agreement relating to an Acquisition Proposal involving the Company
or similar business combination with a person or entity other than Parent or its
affiliates (or the Board resolves to do any of the foregoing); or (iii) if due
to an occurrence or circumstance that would result in a failure to satisfy any
condition set forth in Annex A to the Merger Agreement, the Purchaser shall have
failed to commence the Offer on or prior to five days following the initial
public announcement of the Merger Agreement; provided,
 
                                       22
<PAGE>   25
 
however, Parent and the Purchaser may not terminate the Merger Agreement
pursuant to the Merger Agreement if Parent or the Purchaser is at such time in
breach of its obligations under the Merger Agreement. As used herein, "Company
Material Adverse Effect" and "Parent Material Adverse Effect" mean any material
adverse change in or effect on the business, financial condition or results of
operations of the Company and its subsidiaries taken as a whole, with respect to
"Company Adverse Material Effect", or of Parent and its subsidiaries taken as a
whole, with respect to "Parent Material Adverse Effect"; provided, however, that
the effects of changes that are generally applicable to (i) the North American
RTA furniture industry, (ii) the United States economy, or (iii) the United
States securities markets shall in each case be excluded from such
determination; and provided, further that any adverse effect on the Company and
its subsidiaries, or Parent and its subsidiaries, as the case may be, resulting
from the execution of the Merger Agreement and the announcement of the Merger
Agreement and the transactions contemplated thereby shall also be excluded from
such determination.
 
     In the event of the termination of the Merger Agreement, written notice
thereof shall forthwith be given to the other party or parties specifying the
provision thereof pursuant to which such termination is made, and the Merger
Agreement shall forthwith become null and void, and there shall be no liability
on the part of Parent, the Purchaser or the Company or their respective
directors, officers, employees, shareholders, representatives, agents or
advisors other than, with respect to Parent, the Purchaser and the Company, the
obligations pursuant to the Merger Agreement. Nothing contained in the Merger
Agreement shall relieve Parent, the Purchaser or the Company from liability for
willful breach of the Merger Agreement.
 
     If the Merger Agreement is terminated: (A) by either Parent and the
Purchaser or the Company pursuant to clause (b)(iii) above or by Parent and the
Purchaser pursuant to clause (d)(i) above and any person (other than Parent or
any of its affiliates) shall have made a bona fide Acquisition Proposal to the
Company that becomes disclosed to the public prior to the Special Meeting, and
within one year after the effective date of such termination the Company is the
subject of a Third Party Acquisition Event (as defined below) with such person,
(B) by the Company pursuant to clause (c)(i) above or (C) by Parent and the
Purchaser pursuant to clause (d)(ii) above, then at the time of termination with
respect to (B) or (C) above or the time of execution of a definitive agreement
regarding such a Third Party Acquisition Event with respect to (A) above, the
Company shall pay to Parent a fee of $1,500,000 in cash (the "Fee") and
reimburse Parent for reasonable out-of-pocket costs incurred by Parent or on
behalf of Parent in connection with the Merger Agreement and the transactions
contemplated hereby up to an amount not to exceed $1,500,000. The Company has
agreed not to enter into any agreement with respect to any Third Party
Acquisition Event which does not, as a condition precedent to the execution of
such agreement, require such reimbursement of expenses and the Fee to be paid to
Parent upon such execution. As used herein, the term "Third Party Acquisition
Event" means either of the following: (A) the Company shall agree to,
consummate, or announce its intention to enter into any agreement relating to,
an Acquisition Proposal; or (B) any person (other than the Company, Parent or
the Purchaser or any affiliate thereof) shall have acquired beneficial ownership
(as such term is defined in Rule 13d-3 under the Exchange Act) or the right to
acquire beneficial ownership of, or a new group has been formed which
beneficially owns or has the right to acquire beneficial ownership of, 15% or
more of the outstanding Shares.
 
     Employee Benefits. The Merger Agreement provides that as of the Effective
Time, the Company's Employee Stock Ownership and Savings Plan and Trust
Agreement (the "Company ESOP") will be amended to provide that the Company ESOP
will be frozen with respect to participation and benefit accrual in the part of
the Company ESOP that is an employee stock ownership plan and that no further
contributions will be made to or distributions will be made from such portion of
the Company ESOP; provided, however, that immediately prior to the Effective
Time, the Company shall make a pro rata contribution to the Company ESOP in
respect of the plan year, which plan year shall be deemed to have ended at the
Effective Time, in accordance with the terms of the Company ESOP and applicable
law. The amendment to the Company ESOP will further provide that following the
Effective Time, each participant in the Company ESOP will be entitled to direct
the investment of the balance in his or her Company ESOP account into one or
more of the investment alternatives provided under the 401(k) portion of the
Company ESOP (other than Shares), in accordance with the terms of the Company
ESOP and applicable law.
 
                                       23
<PAGE>   26
 
     The Merger Agreement further provides that as of the Effective Time and for
a two-year period thereafter, the Company and any of its subsidiaries and
successors shall provide their employees with employment benefits substantially
similar in the aggregate to the benefits they received prior to the Effective
Time. Any employment agreements between the Company, its subsidiaries and their
employees will continue to be honored after the Effective Time.
 
     Indemnification; Directors' and Officers' Insurance. From and after the
Effective Time, the Surviving Corporation shall indemnify, defend and hold
harmless any person who is now, or has been at any time prior to the date
hereof, or who becomes prior to the Effective Time, an officer, director,
employee and agent (the "Indemnified Party") of the Company and its subsidiaries
against all losses, claims, damages, liabilities, costs and expenses (including
attorney's fees and expenses), judgments, fines, losses, and amounts paid in
settlement in connection with any actual or threatened action, suit, claim,
proceeding or investigation (each a "Claim") to the extent that any such Claim
is based on, or arises out of, (i) the fact that such person is or was a
director, officer, employee or agent of the Company or any of its subsidiaries
or is or was serving at the request of the Company or any of its subsidiaries as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, or (ii) the Merger Agreement, or any
of the transactions contemplated thereby, in each case to the extent that any
such Claim pertains to any matter or fact arising, existing, or occurring prior
to or at the Effective Time, regardless of whether such Claim is asserted or
claimed prior to, at or after the Effective Time, to the full extent permitted
under Michigan law or the Company's Articles of Incorporation, By-laws or
indemnification agreements in effect at the date hereof, including provisions
relating to advancement of expenses incurred in the defense of any action or
suit; provided, however, that the Surviving Corporation shall not be liable for
any settlement effected without its written consent (which consent shall not be
unreasonably withheld). Without limiting the foregoing, in the event any
Indemnified Party becomes involved in any capacity in any Claim, then from and
after the Effective Time, the Surviving Corporation shall periodically advance
to such Indemnified Party its legal and other expenses (including the cost of
any investigation and preparation incurred in connection therewith), subject to
the provision by such Indemnified Party of an undertaking to reimburse the
amounts so advanced in the event of a final non-appealable determination by a
court of competent jurisdiction that such Indemnified Party is not entitled
thereto. The Indemnified Parties as a group may retain only one law firm with
respect to each related matter except to the extent there is or is reasonably
likely to be, in the opinion of counsel to the Indemnified Party, under
applicable standards of professional conduct, a conflict on any significant
issue between positions of any two or more Indemnified Parties.
 
     The Merger Agreement provides that the Surviving Corporation shall maintain
the Company's existing officers' and directors' liability insurance policy ("D&O
Insurance") for a period of not less than six years after the Effective Time;
provided, however, that in no event shall the Surviving Corporation be required
to expend in any one year an amount in excess of 150% of the last annual premium
paid by the Company for such insurance and if the annual premiums exceed such
amount, the Surviving Corporation shall be obligated to obtain a policy with the
greatest coverages available for a cost not exceeding such amount; provided,
further, the Surviving Corporation may substitute therefor policies of
substantially similar coverage and amounts containing terms no less advantageous
to such former directors or officers with respect to acts or omissions occurring
prior to the Effective Time or individual coverage and provided, that such
substitution shall not result in any gaps or lapses in coverage with respect to
acts or omissions occurring prior to the Effective Time; provided, further, if
the existing D&O Insurance expires, is terminated or cancelled during such
period, the Surviving Corporation will use its best efforts to obtain
substantially similar D&O Insurance.
 
     Parent, the Purchaser and the Company have also agreed that in the event
the Company or the Surviving Corporation or any of their respective successors
or assigns (i) consolidates with or merges into any other person and shall not
be the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers or conveys all or substantially all of its properties
and assets to any person, then and in each such case, proper provision shall be
made so that the successors and assigns of the Company, shall assume the
foregoing indemnity obligations and none of the actions described in clauses (i)
or (ii) shall be taken until such provision is made.
 
                                       24
<PAGE>   27
 
     Access to Information. The Company has agreed that, upon reasonable notice,
the Company shall (and shall cause each of its subsidiaries to) afford to Parent
and its officers, employees, accountants, counsel, financing sources and other
representatives, access, during normal business hours during the period prior to
the earlier of the Effective Time or the date of termination of the Merger
Agreement, to all its properties, books, contracts, commitments and records and,
during such period, the Company shall (and shall cause each of its subsidiaries
to) furnish promptly to Parent (a) a copy of each report, schedule, registration
statement and other documents filed or received by it during such period
pursuant to the requirements of federal securities laws and (b) all other
information concerning its business, properties and personnel as Parent may
reasonably request; provided, however, that nothing herein shall require the
Company or any of its subsidiaries to disclose any information to Parent if such
disclosure would be in violation of applicable laws or regulations of any
Governmental Entity or the provisions of any confidentiality agreement to which
the Company is a party.
 
     Options; Stock Plans. The Merger Agreement provides that the Company will
not issue any additional options or SARs. Each option held by an employee,
officer or director of the Company and other eligible holders to acquire Shares
that is outstanding immediately prior to the Merger, whether or not then vested
or exercisable, shall, simultaneously with the Merger, be cancelled in exchange
for a single lump sum cash payment equal to the product of (1) the number of
Shares subject to such Option and (2) the excess, if any, of the Offer Price
over the exercise price per share of such Option, subject to any required
withholding of taxes. Each SAR held by an employee, officer or director of the
Company that is outstanding immediately prior to the Merger, whether or not then
vested or exercisable, shall, simultaneously with the Merger, shall be cancelled
in exchange for a single lump sum cash payment equal to the product of (1) the
number of SARs held by such employee, officer or director and (2) the excess, if
any, of the Offer Price over $4.00, the fair market value on the date the SARs
were granted. Prior to the Effective Time, if necessary, the Company has agreed
to use all reasonable efforts to (i) obtain consents from appropriate holders of
Options and SARs and (ii) make any amendments to the terms of such Options,
SARs, or the compensation plans or arrangements related thereto that are
necessary to give effect to the transactions contemplated above. Notwithstanding
any foregoing provision, payment may be withheld in respect of any Option or SAR
until necessary or appropriate consents are obtained.
 
TENDER AGREEMENTS
 
     The following is a summary of the material terms of the Tender Agreements.
This summary is qualified in its entirety by reference to the Tender Agreements,
each of which is incorporated herein by reference and a form of which has been
filed with the Commission as an exhibit to the Schedule 14D-1. The Tender
Agreements may be examined and a copy of each may be obtained at the place and
in the manner set forth in Section 8 of this Offer to Purchase.
 
     Tender of Shares.  On the terms and subject to the conditions set forth in
the Tender Agreements, each of the Director Shareholders will (i) tender the
Shares owned by him into the Offer promptly, and in any event no later than the
fifth business day following the commencement of the Offer, or, if the
Shareholder has not received the offer documents by such time, within two
business days following receipt of such documents, and (ii) not withdraw any
Shares so tendered (except in the event the Stock Option (as hereinafter
defined) is exercised). The Director Shareholders will receive the same price
per Share received by other shareholders of the Company in the Offer with
respect to Shares tendered by them in the Offer.
 
     Grant of Stock Option.  On the terms and subject to the conditions set
forth in the Tender Agreements, each Director Shareholder has granted to Parent
an irrevocable option (the "Stock Option") to purchase the Shares owned by such
Director Shareholder at a price per Share equal to the Offer Price (subject to
additional payments in certain limited circumstances as described below),
exercisable at any time, in whole only, if on or after March 27, 1998: (i) any
corporation, partnership, individual, trust, unincorporated association, or
other entity or "person" (as defined in Section 13(d)(3) of the Exchange Act)
other than Parent or any of its "affiliates" (as defined in the Exchange Act) (a
"Third Party"), will have (A) commenced or announced an intention to commence a
bona fide tender offer or exchange offer for any shares of Common Stock, the
consummation of which would result in "beneficial ownership" (as defined in the
Exchange Act) by such Third Party (together with all such Third Party's
affiliates and "associates" (as defined in the Exchange Act))
                                       25
<PAGE>   28
 
of 35% or more of the then outstanding voting equity of the Company (either on a
primary or a fully diluted basis), (B) acquired beneficial ownership of shares
of Common Stock that, when aggregated with any shares of Common Stock already
owned by such Third Party, its affiliates and associates, would result in the
aggregate beneficial ownership by such Third Party, its affiliates and
associates of 15% or more of the then outstanding voting equity of the Company
(either on a primary or a fully diluted basis), provided, however, that "Third
Party" for purposes of this clause (B) does not include any corporation,
partnership, person, other entity or group that beneficially owns more than 15%
of the outstanding voting equity of the Company (either on a primary or a fully
diluted basis) as of the date hereof and that does not, after the date hereof,
increase such ownership percentage by more than an additional 1% of the
outstanding voting equity of the Company (either on a primary or a fully diluted
basis), (C) acquired assets constituting 15% or more of the total assets or
earning power of the Company taken as a whole or (D) entered into an agreement
with the Company that contemplates the acquisition of (1) assets constituting
15% or more of the total assets or earning power of the Company taken as a whole
or (2) beneficial ownership of 15% or more of the outstanding voting equity of
the Company; or (ii) the Board shall have withdrawn, or modified or changed in a
manner adverse to Parent its approval or recommendation of the Merger Agreement
under certain circumstances that would allow the Company to terminate the Merger
Agreement (after the passage of the applicable notice period but without the
necessity of the Company having terminated the Merger Agreement).
 
     In the event that Parent or the Purchaser exercises the Stock Option and
subsequent to such exercise either (i) Parent or the Purchaser pays
consideration in excess of the Offer Price for the Shares pursuant to the Merger
(a "Higher Price"), or (ii) (A) a third party commences a bona-fide tender offer
or exchange offer for Shares for consideration in excess of the Offer Price (the
"Excess Consideration"), (B) the Company terminates the Merger Agreement under
certain circumstances where the Board shall have withdrawn, or modified or
changed in a manner adverse to Parent its approval or recommendation of the
Merger Agreement, (C) prior to such termination, but after receiving notice of
the Company's intention to so terminate, Parent or the Purchaser exercises the
Stock Option and (D) Parent or the Purchaser tenders the Shares it received upon
the exercise of the Stock Option in such tender offer or exchange offer and
receives Excess Consideration with respect to such Shares, then, in the case of
clause (i) above, Parent or the Purchaser shall pay to each Director Shareholder
in cash, within five days after Parent or the Purchaser pays the Higher Price to
holders of Shares, an amount equal to the applicable number of Shares multiplied
by the difference between the Higher Price and the Offer Price, and, in the case
of clause (ii) above, Parent or the Purchaser shall pay to each Director
Shareholder in cash, within five days after Parent or the Purchaser receives the
Excess Consideration, an amount equal to the applicable number of Shares
multiplied by the difference between the Excess Consideration and the Offer
Price.
 
     Conditions to Closing. Each Director Shareholder's obligation to sell the
Shares owned by him upon exercise of the Stock Option and such Shareholder's
obligations under the provisions described in the following paragraph are
subject (at such Director Shareholder's election) to the further conditions that
there will have been no material breach of the representations, warranties,
covenants or agreements of Parent or the Purchaser contained in the applicable
Tender Agreement or contained in the Merger Agreement, which breach has not been
cured within ten business days of the receipt of written notice thereof from the
Director Shareholder.
 
     Voting Agreement; Proxy. Pursuant to the Tender Agreements, each of the
Director Shareholders agreed that, so long as such Tender Agreements are in
effect, at any meeting (whether annual or special and whether or not an
adjourned or postponed meeting) of the holders of Common Stock, however called,
or in connection with any written consent of the holders of Common Stock, such
Director Shareholder will appear at the meeting or otherwise cause the Shares
owned by such Director Shareholder to be counted as present thereat for purposes
of establishing a quorum and vote or consent (or cause to be voted or consented)
such Shares (i) in favor of the Merger and (ii) against any action or agreement
that would impede, interfere with or prevent the Merger, including any other
extraordinary corporate transaction, such as a merger, reorganization or
liquidation involving the Company and a third party or any other proposal of a
third party to acquire the Company and (iii) if requested by Parent, in favor of
a shareholder resolution proposed by Parent in accordance with applicable
provisions of the MBCA the purpose of which is to cause the Offer and the Merger
 
                                       26
<PAGE>   29
 
to be consummated and which does not relate to the election of directors. Each
of the Director Shareholders irrevocably granted to, and appointed, Parent and
any nominee thereof, his proxy and attorney-in-fact (with full power of
substitution) during the term of the applicable Tender Agreement, for and in the
name, place and stead of such Director Shareholder, to vote the Shares owned by
such Director Shareholder, or grant a consent or approval in respect of such
Shares, in connection with any meeting of the shareholders of the Company (i) in
favor of the Merger and (ii) against any action or agreement that would impede,
interfere with or prevent the Merger, including any other extraordinary
corporate transaction, such as a merger, reorganization or liquidation involving
the Company and a third party or any other proposal of a third party to acquire
the Company. Such proxy and power of attorney is irrevocable and coupled with an
interest and is intended to be irrevocable in accordance with the provisions of
Section 422 of the MBCA and Section 212 of the DGCL. Pursuant to the applicable
Tender Agreement, each Director Shareholder also represented that all proxies
theretofore given by such Director Shareholder in respect of the Director
Shareholder's Shares, if any, are not irrevocable, and revoked all such proxies
given with respect to such Shares.
 
     Certain Representations and Warranties. In connection with the Tender
Agreements, the Director Shareholders each made certain customary
representations and warranties, including with respect to (i) ownership of the
Director Shareholder's Shares and the absence of encumbrances on and in respect
of such Shares, (ii) the Director Shareholder's authority to enter into and
perform his obligations under the applicable Tender Agreement, (iii) the absence
of conflicts and requisite governmental consents and approvals, and (iv) the
absence of any broker, finder or investment banker relationship with respect to
the transactions contemplated by the applicable Tender Agreement. In connection
with the Tender Agreements, each of Parent and the Purchaser made certain
customary representations and warranties to the Director Shareholders, including
with respect to (i) authority to enter into and perform its obligations under
the applicable Tender Agreement, (ii) absence of conflicts and requisite
governmental consents and approvals, and (iii) the absence of any broker, finder
or investment banker relationship with respect to the transactions contemplated
by the Tender Agreements.
 
     Certain Covenants. Pursuant to the Tender Agreements, each Director
Shareholder covenanted and agreed that, except as contemplated by such Agreement
and except pursuant to the Offer, the Director Shareholder will not offer to
sell, sell, pledge or otherwise dispose of or transfer any interest in or
encumber with any lien any of the Shares owned by such Director Shareholder, and
will not (i) enter into any contract, option or other agreement or understanding
with respect to any transfer of any or all of such Shares or any interest
therein, (ii) grant any proxy, power-of-attorney or other authorization or
consent in or with respect to such Shares, (iii) deposit such Shares into a
voting trust or enter into a voting agreement or arrangement with respect to
such Shares or (iv) take any other action with respect to such Shares that would
in any way restrict, limit or interfere with the performance of the Director
Shareholder's obligations under the applicable Tender Agreement. Pursuant to the
Tender Agreements, each Director Shareholder also agreed that he will notify
Parent immediately if any proposals are received by, any information is
requested from, or any negotiations or discussions are sought to be initiated or
continued with the Director Shareholder or his attorneys, accountants or other
agents (each of such actions, an "Interest"), in each case in connection with
any Acquisition Proposal indicating, in connection with such notice, the name of
the person indicating such Interest and the terms and conditions of any related
proposals or offers. The Director Shareholders also agreed to cease immediately
and cause to be terminated immediately any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal. In addition, each Director Shareholder agreed to keep
Parent informed, on a current basis, of the status and terms of any Acquisition
Proposal and to use his best efforts to ensure that his attorneys, accountants
and other agents do not, directly or indirectly: (i) initiate, solicit or
encourage, or take any action to facilitate the making of, any offer or proposal
that constitutes or is reasonably likely to lead to any Acquisition Proposal,
(ii) enter into any agreement with respect to any Acquisition Proposal or (iii)
in the event of an unsolicited written proposal in respect of an Acquisition
Proposal, engage in negotiations or discussions with, or provide any information
or data to, any person (other than Parent, any of its affiliates or
representatives and except for information that has been previously publicly
disseminated by the Company) relating to any Acquisition Proposal. Nothing in
the Tender Agreements shall be construed to prohibit any Director Shareholder
from taking any action solely in his capacity as a member of the Board to the
extent specifically permitted by the Merger Agreement or as required by
applicable law.
                                       27
<PAGE>   30
 
     Termination. Except as otherwise specifically provided therein, all
obligations under the Tender Agreements terminate on the earliest of (a) the
date the Merger Agreement is terminated in accordance with its terms or the date
the Offer is terminated by Parent or the Purchaser as a result of any failure of
a condition of the Offer; provided, however, that the provisions relating to the
Stock Option shall not terminate until 60 days thereafter (or such later time as
permitted by such provisions) if the Merger Agreement was terminated pursuant to
Section 8.1(c)(i) thereof, (b) the purchase of all the Shares subject to the
Stock Option pursuant to the Offer or pursuant to the Stock Option, or (c) on
September 30, 1998.
 
     Except as described herein or incorporated herein by reference, to the
knowledge of the Company as of the date hereof, there are no material contracts,
agreements, arrangements or understandings or any actual or potential conflicts
of interest between the Company or its affiliates and the Purchaser, its
executive officers, directors or affiliates.
 
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY; OTHER MATTERS.
 
     The purpose of the Offer, the Merger, the Merger Agreement and the Tender
Agreements is for Parent to acquire control of, and the entire equity interest
in, the Company. Upon consummation of the Merger, the Company will become an
indirect wholly-owned subsidiary of Parent. The Offer is intended to increase
the likelihood that the Merger will be effected.
 
  Plans for the Company
 
     Parent is conducting a detailed review of the Company and its assets,
corporate structure, capitalization, operations, properties, policies,
management and personnel and will consider, subject to the terms of the Merger
Agreement, what, if any, changes would be desirable in light of the
circumstances which exist upon completion of the Offer. Such changes could
include changes in the Company's business, corporate structure, charter, bylaws,
capitalization, Board, management or dividend policy, although, except as noted
in this Offer to Purchase, Parent has no current plans with respect to any of
such matters.
 
     Except as described in this Offer to Purchase, neither Parent nor the
Purchaser has any present plans or proposals that would result in an
extraordinary corporate transaction, such as a merger, reorganization,
liquidation, relocation of operations, or sale or transfer of assets, involving
the Company or any material changes in the Company's corporate structure,
business or composition of its management and personnel.
 
  Other Matters
 
     Shareholder Approval. Under the MBCA and the Company's Restated Articles of
Incorporation, the approval of the Board, and the affirmative vote of the
holders of a majority of the outstanding Shares, including the Shares held by
Purchaser and its affiliates, are required to approve and adopt the Merger
Agreement and the transactions contemplated thereby, including the Merger.
 
     The Board has unanimously approved the Offer, the Merger and the Merger
Agreement and the transactions contemplated thereby. Unless the Merger is
consummated pursuant to the short-form merger provisions under the MBCA
described below (in which case no further corporate action by the shareholders
of the Company will be required to complete the Merger), the only remaining
required corporate action of the Company will be the approval and adoption of
the Merger Agreement and the transactions contemplated thereby by the
affirmative vote of the holders of a majority of the Shares.
 
     Short Form Merger. Under Section 711 of the MBCA, if the Purchaser acquires
at least 90% of the outstanding Shares, the Purchaser will be able to approve
the Merger without a vote of the Company's shareholders. In such event, the
Purchaser anticipates that it will take all necessary and appropriate action to
cause the Merger to become effective as soon as reasonably practicable after
such acquisition without a meeting of the Company's shareholders. If the
Purchaser does not acquire at least 90% of the outstanding Shares pursuant to
the Offer or otherwise, a significantly longer period of time may be required to
effect the Merger, because a vote or the consent of the Company's shareholders
would be required under the MBCA.
 
                                       28
<PAGE>   31
 
     Pursuant to the Merger Agreement, the Company has agreed to take all action
necessary under the MBCA and its Restated Articles of Incorporation and Bylaws
to convene a meeting of its shareholders promptly following consummation of the
Offer to consider and vote on the Merger, if a shareholders' vote is required.
If the Purchaser owns a majority of the outstanding Shares, approval of the
Merger can be obtained without the affirmative vote of any other shareholder of
the Company.
 
     Appraisal Rights. No appraisal rights are available in connection with the
Offer.
 
     Rule 13e-3. The Merger would have to comply with any applicable federal law
operative at the time. Rule 13e-3 under the Exchange Act is applicable to
certain "going private" transactions. The Purchaser does not believe that Rule
13e-3 will be applicable to the Merger. Rule 13e-3 requires, among other things,
that certain financial information concerning the Company, and certain
information relating to the fairness of the proposed transaction and the
consideration offered to minority shareholders in such a transaction, be filed
with the Commission and disclosed to minority shareholders prior to consummation
of the transaction.
 
13. DIVIDENDS AND DISTRIBUTIONS.
 
     As described above, the Merger Agreement provides that the Company shall
not, between the date of the Merger Agreement and the Effective Time, without
the prior written consent of Parent, (a) issue or authorize or propose the
issuance of, sell, pledge or dispose of, or agree to issue or authorize or
propose the issuance of, sell, pledge or dispose of, any additional shares of,
or any options, warrants or rights of any kind to acquire any shares of, its
capital stock of any class, any debt or equity securities convertible into or
exchangeable for such capital stock or any other equity related right (including
any phantom stock or SARs), other than any such issuance pursuant to options,
warrants, rights or convertible securities outstanding as of the date of the
Merger Agreement; or (b) redeem, purchase, acquire or offer to purchase or
acquire any (x) shares of its capital stock or (y) long-term debt other than as
required by governing instruments relating thereto.
 
14. CERTAIN CONDITIONS OF THE OFFER.
 
     Notwithstanding any other provision of the Offer, the Purchaser shall not
be required to accept for payment or pay for any Shares tendered pursuant to the
Offer, and may terminate or amend the Offer and may postpone the acceptance for
payment of and payment for, Shares tendered, if (i) the Minimum Condition shall
not have been satisfied, (ii) any applicable waiting period under the HSR Act
shall not have expired or been terminated prior to the expiration of the Offer
or (iii) at any time on or after the date of the Merger Agreement, and prior to
the acceptance for payment of Shares, any of the following conditions shall
exist:
 
          (a) there shall have been instituted or be pending any action or
     proceeding before any court or governmental, administrative or regulatory
     authority or agency, domestic or foreign, (i) challenging or seeking to
     make illegal, materially delay or otherwise directly or indirectly restrain
     or prohibit or make materially more costly the making of the Offer, the
     acceptance for payment of, or payment for, any Shares by Parent, the
     Purchaser or any other affiliate of Parent, or the consummation of any
     other transaction contemplated by the Merger Agreement, or seeking to
     obtain material damages in connection with any transaction contemplated by
     the Merger Agreement; (ii) seeking to prohibit or limit materially the
     ownership or operation by the Company, Parent or any of their subsidiaries
     of all or any material portion of the business or assets of the Company,
     Parent or any of their subsidiaries, or to compel the Company, Parent or
     any of their subsidiaries to dispose of or hold separate all or any
     material portion of the business or assets of the Company, Parent or any of
     their subsidiaries, as a result of the transactions contemplated by the
     Merger Agreement; (iii) seeking to impose or confirm limitations on the
     ability of Parent, the Purchaser or any other affiliate of Parent to
     exercise effectively full rights of ownership of any Shares, including,
     without limitation, the right to vote any Shares acquired by the Purchaser
     pursuant to the Offer or otherwise on all matters properly presented to the
     Company's shareholders, including, without limitation, the approval and
     adoption of the Merger Agreement and the transactions contemplated thereby;
     (iv) seeking to require divestiture by Parent, the Purchaser or any other
     affiliate of Parent of any Shares; or (v) which otherwise has a Parent
     Material Adverse Effect;
 
                                       29
<PAGE>   32
 
          (b) there shall have been any action taken, or any statute, rule,
     regulation, legislation, interpretation, judgment, order or injunction
     enacted, entered, enforced, promulgated, amended, issued or deemed
     applicable to (i) Parent, the Company or any subsidiary or affiliate of
     Parent or the Company or (ii) any transaction contemplated by the Merger
     Agreement, by any legislative body, court, government or governmental,
     administrative or regulatory authority or agency, domestic or foreign,
     other than the routine application of the waiting period provisions of the
     HSR Act to the Offer or the Merger, which is reasonably likely to result,
     directly or indirectly, in any of the consequences referred to in clauses
     (i) through (v) of paragraph (a) above;
 
          (c) there shall have occurred any change, condition, event or
     development that has a Company Material Adverse Effect; provided, however,
     that no event, change or effect that primarily results from the Merger
     Agreement, the Merger, the Offer and the transactions contemplated thereby
     with the announcement thereof shall be deemed individually or in the
     aggregate a Company Material Adverse Effect;
 
          (d) there shall have occurred (i) any general suspension of, or
     limitation on prices for, trading in securities on the Nasdaq National
     Market for the Company for a period in excess of 24 hours (excluding
     suspensions or limitations resulting solely from physical damage or
     interference with such exchange not related to market conditions), (ii) a
     declaration of a banking moratorium or any suspension of payments in
     respect of banks in the United States or Canada, (iii) any limitation
     (whether or not mandatory) by any government or governmental,
     administrative or regulatory authority or agency, domestic or foreign, on,
     or other event that, in the reasonable judgment of the Purchaser, might
     affect, the extension of credit by banks or other lending institutions,
     (iv) a commencement of a war or armed hostilities or other national or
     international calamity directly or indirectly involving the United States
     or Canada or (v) in the case of any of the foregoing existing on the date
     of the Merger Agreement, a material acceleration or worsening thereof;
 
          (e) (i) it shall have been publicly disclosed or the Purchaser shall
     have otherwise learned that beneficial ownership (determined for the
     purposes of this paragraph as set forth in Rule 13d-3 promulgated under the
     Exchange Act) of 15% or more of the then outstanding Shares has been
     acquired by any person, other than Parent or any of its affiliates or (ii)
     the Board or any committee thereof shall have withdrawn or modified in a
     manner adverse to Parent or the Purchaser the approval or recommendation of
     the Offer, the Merger or the Merger Agreement, or approved or recommended
     any takeover proposal or any other acquisition of Shares other than the
     Offer and the Merger;
 
          (f) any representation or warranty of the Company in the Merger
     Agreement which is qualified as to materiality shall not be true and
     correct or any such representation or warranty that is not so qualified
     shall not be true and correct in any material respect, in each case as if
     such representation or warranty was made as of such time on or after the
     date of the Merger Agreement (except for a representation or warranty which
     references a particular date);
 
          (g) the Company shall have failed to perform in any material respect
     any obligation or to comply in any material respect with any agreement or
     covenant of the Company to be performed or complied with by it under the
     Merger Agreement;
 
          (h) the Merger Agreement shall have been terminated in accordance with
     its terms; or
 
          (i) the Purchaser and the Company shall have agreed in writing that
     the Purchaser shall terminate the Offer or postpone the payment for Shares
     thereunder;
 
which, in the sole judgment of the Purchaser in any such case, and regardless of
the circumstances (including any action or inaction by Parent or any of its
affiliates) giving rise to any such condition, makes it inadvisable to proceed
with such acceptance for payment or payment.
 
     The foregoing conditions are for the sole benefit of the Purchaser and
Parent and may be asserted by the Purchaser or Parent regardless of the
circumstances giving rise to any such condition or may be waived by the
Purchaser or Parent in whole or in part at any time and from time to time in
their sole discretion. The failure
 
                                       30
<PAGE>   33
 
by Parent or the Purchaser at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right; the waiver of any such right
with respect to particular facts and other circumstances shall not be deemed a
waiver with respect to any other facts and circumstances; and each such right
shall be deemed an ongoing right that may be asserted at any time and from time
to time.
 
15. CERTAIN LEGAL MATTERS.
 
     Except as described in this Section 15, based on information provided by
the Company, none of the Company, the Purchaser or Parent is aware of any
license or regulatory permit that appears to be material to the business of the
Company and its subsidiaries, taken as a whole, that might be adversely affected
by the Purchaser's acquisition of Shares as contemplated herein or of any
approval or other action by a domestic or foreign governmental, administrative
or regulatory agency or authority that would be required or desirable for the
acquisition and ownership of the Shares by the Purchaser as contemplated herein.
Should any such approval or other action be required or desirable, the Purchaser
and Parent presently contemplate that such approval or other action will be
sought, except as described below under "State Takeover Laws." While, except as
otherwise described in this Offer to Purchase, the Purchaser does not presently
intend to delay the acceptance for payment of or payment for Shares tendered
pursuant to the Offer pending the outcome of any such matter, there can be no
assurance that any such approval or other action, if needed, would be obtained
or would be obtained without substantial conditions or that failure to obtain
any such approval or other action might not result in consequences adverse to
the Company's business or that certain parts of the Company's business might not
have to be disposed of or other substantial conditions complied with in the
event that such approvals were not obtained or such other actions were not taken
or in order to obtain any such approval or other action. If certain types of
adverse action are taken with respect to the matters discussed below, the
Purchaser could decline to accept for payment or pay for any Shares tendered.
See Section 14 for certain conditions to the Offer, including conditions with
respect to governmental actions.
 
     (a) State Takeover Laws. The Company is incorporated under the laws of the
State of Michigan. No Michigan takeover statute or similar statute or
regulation, including without limitation Sections 775 to 784 and Sections 790 to
799 of the MBCA, imposes restrictions materially adversely affecting (or
materially delaying) the consummation of the Offer or the Merger or would, as a
result of the Offer, the Merger, the transactions contemplated thereby or the
acquisition of securities of the Company or the Surviving Corporation by Parent
or the Purchaser, (A) restrict or impair the ability of Parent to vote, or
otherwise to exercise the rights of a shareholder with respect to, securities of
the Company or the Surviving Corporation that may be acquired or controlled by
Parent or (B) entitle any shareholder to acquire securities of the Company or
the Surviving Corporation on a basis not available to Parent.
 
     A number of other states throughout the United States have enacted takeover
statutes that purport, in varying degrees, to be applicable to attempts to
acquire securities of corporations that are incorporated or have assets,
shareholders, executive offices or places of business in such states. In Edgar
v. MITE Corp., the Supreme Court of the United States held that the Illinois
Business Takeover Act, which involved state securities laws that made the
takeover of certain corporations more difficult, imposed a substantial burden on
interstate commerce and therefore was unconstitutional. In CTS Corp. v. Dynamics
Corp. of America, however, the Supreme Court of the United States held that a
state may, as a matter of corporate law and, in particular, with respect to
those aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without prior approval of the remaining shareholders, provided that
such laws were applicable only under certain conditions.
 
     (b) Antitrust. The Offer and the Merger are subject to the HSR Act, which
provides that certain acquisition transactions may not be consummated unless
certain information has been furnished to the Antitrust Division of the
Department of Justice (the "Antitrust Division") and the Federal Trade
Commission (the "FTC") and certain waiting period requirements have been
satisfied.
 
     Parent and the Company expect to file their Notification and Report Forms
with respect to the Offer under the HSR Act on or about April 7, 1998. The
waiting period under the HSR Act with respect to the Offer will expire at 11:59
p.m., New York City time, on the 15th day after the date Parent's form is filed
unless
 
                                       31
<PAGE>   34
 
early termination of the waiting period is granted. However, the Antitrust
Division or the FTC may extend the waiting period by requesting additional
information or documentary material from Parent. If such a request is made, such
waiting period will expire at 11:59 p.m., New York City time, on the tenth day
after substantial compliance by Parent with such request. Only one extension of
the waiting period pursuant to a request for additional information is
authorized by the HSR Act. Thereafter, such waiting period may be extended only
by court order or with the consent of Parent. In practice, complying with a
request for additional information or material can take a significant amount of
time. In addition, if the Antitrust Division or the FTC raises substantive
issues in connection with a proposed transaction, the parties frequently engage
in negotiations with the relevant governmental agency concerning possible means
of addressing those issues and may agree to delay consummation of the
transaction while such negotiations continue. The Purchaser will not accept for
payment Shares tendered pursuant to the Offer unless and until the waiting
period requirements imposed by the HSR Act with respect to the Offer have been
satisfied. See Section 14.
 
     As discussed below, the HSR Act requirements with respect to the Merger
will not apply if certain conditions are met. In particular, the Merger may not
be consummated until 30 calendar days after receipt by the Antitrust Division
and the FTC of the Notification and Report Forms of both Parent and the Company
unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to
the Offer (which would be the case if the Minimum Condition were satisfied) or
the 30-day period is earlier terminated by the Antitrust Division and the FTC.
Within such 30-day period, the Antitrust Division or the FTC may request
additional information or documentary materials from Parent and/or the Company.
The Merger may not be consummated until 20 days after such requests are
substantially complied with by both Parent and the Company. Thereafter, the
waiting periods may be extended only by court order or with the consent of
Parent and the Company.
 
     The FTC and the Antitrust Division periodically review the legality under
the antitrust laws of transactions such as the Purchaser's acquisition of Shares
pursuant to the Offer and the Merger. At any time before or after the
Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take
such action under the antitrust laws as it deems necessary or desirable in the
public interest, including seeking to enjoin the acquisition of Shares pursuant
to the Offer or otherwise or seeking divestiture of Shares acquired by the
Purchaser or divestiture of substantial assets of Parent or its subsidiaries.
Private parties, as well as state governments, may also bring legal action under
the antitrust laws under certain circumstances. Based upon an examination of
publicly available information relating to the businesses in which Parent and
the Company are engaged, Parent and the Purchaser believe that the acquisition
of Shares by the Purchaser will not violate the antitrust laws. Nevertheless,
there can be no assurance that a challenge to the Offer or other acquisition of
Shares by the Purchaser on antitrust grounds will not be made or, if such a
challenge is made, of the result. See Section 14 for certain conditions to the
Offer, including conditions with respect to litigation and certain governmental
actions.
 
     (c) Federal Reserve Board Regulations. Regulations U and X (the "Margin
Regulations") of the Federal Reserve Board restrict the extension or maintenance
of credit for the purpose of buying or carrying margin stock, including the
Shares, if the credit is secured directly or indirectly by margin stock. Such
secured credit may not be extended or maintained in an amount that exceeds the
maximum loan value of all the direct and indirect collateral securing the
credit, including margin stock and other collateral. All financing for the Offer
will be in full compliance with the Margin Regulations.
 
16. FEES AND EXPENSES.
 
     The Purchaser has retained Innisfree M&A Incorporated to act as the
Information Agent and Harris Trust Company of New York to act as the Depositary
in connection with the Offer. Such firms each will receive reasonable and
customary compensation for their services. The Purchaser has also agreed to
reimburse each such firm for certain reasonable out-of-pocket expenses and to
indemnify each such firm against certain liabilities and expenses in connection
with their services, including certain liabilities under the federal securities
laws.
 
                                       32
<PAGE>   35
 
     The Purchaser will not pay any fees or commissions to any broker or dealer
or other person (other than the Information Agent) for soliciting tenders of
Shares pursuant to the Offer. Brokers, dealers, banks and trust companies will
be reimbursed by the Purchaser for customary mailing and handling expenses
incurred by them in forwarding material to their customers.
 
17. MISCELLANEOUS.
 
     The Offer is being made to all holders of Shares other than the Company.
The Purchaser is not aware of any jurisdiction in which the making of the Offer
or the tender of Shares in connection therewith would not be in compliance with
the laws of such jurisdiction. If the Purchaser becomes aware of any
jurisdiction in which the making of the Offer would not be in compliance with
applicable law, the Purchaser will make a good faith effort to comply with any
such law. If, after such good faith effort, the Purchaser cannot comply with any
such law, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of Shares residing in such jurisdiction. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of the Purchaser by one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
 
     No person has been authorized to give any information or to make any
representation on behalf of Parent or the Purchaser not contained herein or in
the Letter of Transmittal and, if given or made, such information or
representation must not be relied upon as having been authorized.
 
     The Purchaser and Parent have filed with the Commission the Schedule 14D-1
pursuant to Rule 14d-3 under the Exchange Act furnishing certain additional
information with respect to the Offer. The Schedule 14D-1 and any amendments
thereto, including exhibits, may be examined and copies may be obtained from the
offices of the Commission in the manner set forth in Section 8 of this Offer to
Purchase (except that they will not be available at the regional offices of the
Commission).
 
                                          HORIZON ACQUISITION, INC.
 
April 3, 1998
 
                                       33
<PAGE>   36
 
                                   SCHEDULE I
 
                      DIRECTORS AND EXECUTIVE OFFICERS OF
                            PARENT AND THE PURCHASER
 
     1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment, and material occupations, positions, offices or
employments and business addresses thereof for the past five years of each
director and executive officer of Parent. Unless otherwise indicated, the
current business address of each person is 4750 Boulevard des Grandes Prairies,
St. Leonard, Quebec, Canada H1R 2A3. Unless otherwise indicated, each such
person is a citizen of Canada and has held his or her present position as set
forth below, or has been an executive officer at Parent, for the past five
years. Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to employment with Parent.
 
<TABLE>
<CAPTION>
                                               PRESENT PRINCIPAL OCCUPATION AND
             NAME                                FIVE YEAR EMPLOYMENT HISTORY
             ----                              --------------------------------
<S>                              <C>
Martin Schwartz................  President of Parent
Jeff Segel.....................  Vice-President, Sales and Marketing of Parent
Alan Schwartz..................  Vice-President, Operations of Parent
Jeffrey Schwartz...............  Vice-President, Finance of Parent
Frank Rana.....................  Treasurer of Parent
Nick Costides..................  President of Cosco
(United States citizen)
Richard Jackson................  President of Charleswood
(United States Citizen)
Robert Klassen.................  Chief Operating Officer of Ridgewood since 1995 Prior to
                                 1995, Mr. Klassen spent over sixteen years in operations at
                                 various retail industry corporations.
Douglas Crozier................  Chief Operating Officer of Dorel Home Products division
                                 since 1994. Prior to 1994, Mr. Crozier was Division
                                 President at BPCO, a division of EMCO Limited, a distributor
                                 of home building products.
David Cytrynbaum...............  President of Leadra since 1993. Prior to 1993, Mr.
                                 Cytrynbaum was owner and manager of Carol Ann Furniture Ltd.
Kees Spreeuwenberg.............  Managing Director of Maxi-Miliaan. Prior to 1993, Mr
(Citizen of the Netherlands)     Spreeuwenberg spent 13 years with Rothman's, a tobacco
                                 company.
Michael Silberstein............  President of Infantino
(United States citizen)
Michael Caplan.................  Managing Director of Dorel U.K. (since 1996). Prior to 1996,
(Citizen of United Kingdom)      Mr. Caplan was managing director of Write On Demand and
                                 Stylus Music Limited.
Dr. Laurent Picard.............  Director of Parent, Retired Professor of McGill University
                                 and a director of The Jean Coutu Group (PJC) Inc.
Bruce Kaufman..................  Director of Parent and President of Kaufel Group Ltd.
Maurice Tousson................  Director of Parent and President of Medi-Trust Pharamacy
                                 Inc.
</TABLE>
 
                                       I-1
<PAGE>   37
 
     2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment, and material occupations, positions, offices or
employments and business addresses thereof for the past five years of each
director and executive officer of the Purchaser. Unless otherwise indicated, the
current business address of each person is 4750 Boulevard des Grandes Prairies,
St. Leonard, Quebec, Canada H1R 2A3. Unless otherwise indicated, each such
person is a citizen of Canada, and each occupation set forth opposite an
individual's name refers to employment with the Purchaser.
 
<TABLE>
<CAPTION>
                                               PRESENT PRINCIPAL OCCUPATION AND
             NAME                                FIVE YEAR EMPLOYMENT HISTORY
             ----                              --------------------------------
<S>                              <C>
Martin Schwartz................  President of the Purchaser. President of Parent.
Jeffrey Schwartz...............  Treasurer of the Purchaser. Vice President, Finance of
                                 Parent.
</TABLE>
 
                                       I-2
<PAGE>   38
 
     Facsimile copies of the Letter of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal, certificates for Shares and
any other required documents should be sent or delivered by each shareholder of
the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary, at one of the addresses set forth below:
 
                        The Depositary for the Offer is:
 
                        HARRIS TRUST COMPANY OF NEW YORK
 
<TABLE>
<S>                                            <C>
                   By Mail:                             By Hand/Overnight Delivery:
             Wall Street Station                               Receive Window
                P.O. Box 1023                                Wall Street Plaza
           New York, NY 10268-1023                       88 Pine Street, 19th Floor
                                                             New York, NY 10005
                                 By Facsimile Transmission:
                                       (212) 701-7636
                                 For Information Telephone:
                                       (212) 701-7624
</TABLE>
 
     Questions or requests for assistance or additional copies of this Offer to
Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may be
directed to the Information Agent at its location and telephone numbers set
forth below. Shareholders may also contact their broker, dealer, commercial bank
or trust company for assistance concerning the Offer.
 
                    The Information Agent for the Offer is:
 
                        INNISFREE M&A INCORPORATED LOGO
 
                         501 Madison Avenue, 20th Floor
                            New York, New York 10022
                            Telephone (212) 750-5833
                                       or
                         CALL TOLL FREE: (888) 750-5834
