
<PAGE>

   This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares (as defined below). The Offer (as defined below) is made
only by the Offer to Purchase, dated January 28, 2000 and the related Letter
of Transmittal and any amendments or supplements thereto, and is being made to
all holders of Shares. The Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of Shares in any jurisdiction in which
the making of the Offer or the acceptance thereof would not be in compliance
with the securities, blue sky or other laws of such jurisdiction. However, the
Purchaser (as defined below) may, in its discretion, take such action as it
may deem necessary to make the Offer in any jurisdiction and extend the Offer
to holders of Shares in such jurisdiction. In those jurisdictions where
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 Credit Suisse First Boston Corporation ("Credit Suisse First
Boston" or the "Dealer Manager") or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.

                     Notice of Offer to Purchase for Cash
                 All of the Outstanding Shares of Common Stock
                                      of
                              Balance Bar Company
                                      at
                             $19.40 Net Per Share
                                      by
                             BB Acquisition, Inc.
                         a wholly owned subsidiary of
                               Kraft Foods, Inc.

   BB Acquisition, Inc., a Delaware corporation (the "Purchaser") and a wholly
owned subsidiary of Kraft Foods, Inc., a Delaware corporation ("Parent"), is
offering to purchase all of the outstanding shares of common stock, par value
$0.01 per share (the "Shares"), of Balance Bar Company, a Delaware corporation
(the "Company"), at a price of $19.40 per Share, net to the seller in cash
(less any required withholding taxes), without interest thereon, on the terms
and subject to the conditions set forth in the Offer to Purchase, dated
January 28, 2000 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"). Tendering shareholders who have Shares
registered in their names and who tender directly to American Stock Transfer &
Trust Company (the "Depositary") will not be charged brokerage fees or
commissions or, subject to Instruction 6 of the Letter of Transmittal,
transfer taxes on the purchase of Shares pursuant to the Offer. Shareholders
who hold their Shares through a broker or bank should consult such institution
as to whether it charges any service fees. Purchaser will pay all charges and
expenses of the Dealer Manager, the Depositary, and D.F. King & Co., Inc.,
which is acting as the information agent (the "Information Agent"), incurred
in connection with the Offer. Following the consummation of the Offer, the
Purchaser intends to effect the Merger described below.

 THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
           TIME, ON FEBRUARY 25, 2000, UNLESS THE OFFER IS EXTENDED.

   The Offer is conditioned upon, among other things, the satisfaction or
waiver of certain conditions, including (1) there being validly tendered in
accordance with the terms of the Offer and not withdrawn prior to the
expiration date of the Offer a number of Shares which, together with the
Shares then owned by Parent or the Purchaser, represents more than 50% of the
Shares outstanding (the "Minimum Condition") and (2) the expiration or
termination of any waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended. The Offer is also subject to the
satisfaction of certain other conditions. See Section 17 of the Offer to
Purchase.

<PAGE>

   The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of January 21, 2000 (the "Merger Agreement"), among Parent, the Purchaser
and the Company. The purpose of the Offer is for Parent, through the
Purchaser, to acquire a majority voting interest in the Company as the first
step in a business combination. The Merger Agreement provides that, among
other things, the Purchaser will make the Offer and that as promptly as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction or waiver of the other conditions set forth in the Merger
Agreement and in accordance with relevant provisions of the General
Corporation Law of the State of Delaware (the "DGCL"), the Purchaser will be
merged with and into the Company, with the Company continuing as the surviving
corporation (the "Merger"). At the effective time of the Merger (the
"Effective Time"), each Share issued and outstanding immediately prior to the
Effective Time (other than Shares owned beneficially or of record by Parent or
any subsidiary of Parent or held in the treasury of the Company, all of which
shall be cancelled, and other than Shares which are held by shareholders, if
any, who properly exercise their appraisal rights under the DGCL) will be
cancelled and converted into the right to receive $19.40 in cash, or any
higher price that is paid in the Offer (less any required withholding taxes),
without interest thereon.

   Certain shareholders of the Company have entered into Support Agreements
pursuant to which such shareholders have agreed, among other things, to tender
pursuant to the Offer, and not to withdraw, all of their Shares, which
together represent approximately 54% of all outstanding Shares (approximately
51% on a fully-diluted basis). The Board of Directors of the Company has
unanimously approved the Merger Agreement, the Offer and the Merger and
determined that the Offer and the Merger are fair to and in the best interests
of the Company and its shareholders. The Board of Directors of the Company
recommends that the Company's shareholders tender their Shares pursuant to the
Offer and approve and adopt the Merger Agreement.

   For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not properly
withdrawn as, if and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance of such Shares for payment pursuant
to the Offer. In all cases, on the terms and subject to the conditions of the
Offer, payment for Shares purchased pursuant to the Offer will be made by
deposit of the purchase price with the Depositary, which will act as agent for
tendering shareholders for the purpose of receiving payment from the Purchaser
and transmitting such payment to tendering shareholders. Under no
circumstances will interest on the purchase price of Shares be paid by the
Purchaser because of any delay in making any payment. Payment for Shares
tendered and accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of (i) certificates for such Shares or
timely confirmation of a book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility (as defined in the
Offer to Purchase), pursuant to the procedures set forth in the Offer to
Purchase, (ii) a properly completed and duly executed Letter of Transmittal
(or manually signed facsimile thereof) with all required signature guarantees
or, in the case of a book-entry transfer, an Agent's Message (as defined in
the Offer to Purchase), and (iii) any other documents required by the Letter
of Transmittal.

   If any of the conditions set forth in the Offer to Purchase that relate to
the Purchaser's obligations to purchase the Shares are not satisfied by 12:00
Midnight, New York City time, on February 25, 2000 (or any other time then set
as the Expiration Date), the Purchaser may, subject to the Merger Agreement as
described below, elect to, (i) extend the Offer and, subject to applicable
withdrawal rights, retain all tendered Shares until the expiration of the
Offer, as extended, (ii) subject to complying with applicable rules and
regulations of the Securities and Exchange Commission, accept for payment all
Shares so tendered and not extend the Offer, or (iii) terminate the Offer and
not accept for payment any Shares and return all tendered Shares to tendering
shareholders. The term "Expiration Date" means 12:00 Midnight, New York City
time, on February 25, 2000, unless the Purchaser 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 Purchaser does not expect to
make a subsequent offering period available following the Expiration Date
pursuant to Rule 14d-11 of the Securities

                                       2
<PAGE>

Exchange Act of 1934, as amended (the "Exchange Act"), although it reserves
the right to do so in its sole discretion.

   Subject to the terms and conditions set forth in the Offer to Purchase and
the Merger Agreement and the applicable rules and regulations of the
Securities and Exchange Commission, the Purchaser reserves the right (but will
not be obligated), at any time or from time to time in its sole discretion,
(i) to extend the period during which the Offer is open or (ii) to amend the
Offer in any other respect by giving oral or written notice of such extension
or amendment to the Depositary and by making a public announcement of such
extension or amendment. Except to the extent required by the Merger Agreement,
there can be no assurance that the Purchaser will exercise its right to extend
or amend the Offer. Any extension of the period during which the Offer is open
and will be followed, as promptly as practicable, by public announcement
thereof, such announcement to be issued not later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date. During any such extension, all Shares previously tendered and not
withdrawn will remain subject to the Offer, subject to the rights of a
tendering shareholder to withdraw such shareholder's Shares.

   Shares tendered pursuant to the Offer may be withdrawn at any time prior to
the Expiration Date and, unless theretofore accepted for payment pursuant to
the Offer, also may be withdrawn at any time after March 27, 2000. Except as
otherwise provided in Section 4 of the Offer to Purchase, tenders of Shares
made pursuant to the Offer are irrevocable. For a withdrawal of Shares
tendered pursuant to the Offer to be effective, a written, telegraphic, telex
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 the Offer to
Purchase. Any notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name in which the certificates representing such shares are registered if
different from that of the person who tendered the Shares. If certificates for
Shares to be withdrawn 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 certificates have been tendered by an Eligible Institution
(as defined in the Offer to Purchase), the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution. If Shares have been
tendered pursuant to the procedures for book-entry transfer as set forth in
the Offer to Purchase, any notice of withdrawal must also specify the name and
number of the account of the Book-Entry Transfer Facility to be credited with
the withdrawn Shares. All questions as to the form and validity (including
time of receipt) of notices of withdrawal will be determined by the Purchaser,
in the sole discretion, and its determination will be final and binding on all
parties.

   The receipt of cash in exchange for Shares pursuant to the Offer (or the
Merger) will be a taxable transaction for U.S. federal income tax purposes and
may also be a taxable transaction under applicable state, local or foreign tax
laws. Generally, a shareholder who receives cash in exchange for Shares
pursuant to the Offer (or the Merger) will recognize gain or loss for U.S.
federal income tax purposes equal to the difference between the amount of cash
received and such shareholder's adjusted tax basis in the Shares exchanged
therefor. Provided that such Shares constitute capital assets in the hands of
the shareholder, such gain or loss will be capital gain or loss, and will be
long-term capital gain or loss if the holder has held the Shares for more than
one year at the time of sale. The maximum U.S. federal income tax rate
applicable to individual taxpayers on long-term capital gain is 20%, and the
deductibility of capital losses is subject to limitations. All shareholders
should consult with their own tax advisors as to the particular tax
consequences of the Offer and the Merger to them, including the applicability
and effect of the alternative minimum tax and any state, local or foreign
income and other tax laws and of changes in such tax laws. For a more complete
description of certain U.S. federal income tax consequences of the Offer and
the Merger see Section 5 of the Offer to Purchase. The information required to
be disclosed by Paragraph (d)(1) of Rule 14d-6 of the General Rules and
Regulations under the Exchange Act, is contained in the Offer to Purchase and
is incorporated herein by reference.

   The Company has provided to the Purchaser its list of shareholders and
security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase, the related Letter of

                                       3
<PAGE>

Transmittal and other related materials are being mailed to record holders of
Shares and will be mailed to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the shareholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares.

   The Offer to Purchase and the related Letter of Transmittal contain
important information that should be read carefully before any decision is
made with respect to the Offer.

   Questions and requests for assistance and copies of the Offer to Purchase,
the Letter of Transmittal and all other tender offer materials may be directed
to the Information Agent or the Dealer Manager at their respective addresses
and telephone numbers set forth below, and will be furnished promptly at the
Purchaser's expense. The Purchaser will not pay any fees or commissions to any
broker or dealer or any other person (other than the Dealer Manager and the
Information Agent) for soliciting tenders of Shares pursuant to the Offer.

                    The Information Agent for the Offer is:

                             D.F. King & Co., Inc.
                          77 Water Street, 20th Floor
                           New York, New York 10005

                Banks and Brokers Call Collect: (212) 269-5550
                   All Others Call Toll Free: (800) 549-6650

                     The Dealer Manager for the Offer is:

                          Credit Suisse First Boston

                             Eleven Madison Avenue
                         New York, New York 10010-3629
                        Call Toll Free: (800) 646-4543

                               January 28, 2000


                                       4
<PAGE>

                          Offer To Purchase For Cash
                    All Outstanding Shares of Common Stock
                                      of
                              Balance Bar Company
                                      at
                             $19.40 Net Per Share
                                      by
                             BB Acquisition, Inc.
                         a wholly owned subsidiary of
                               Kraft Foods, Inc.

 THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
       TIME, ON FRIDAY, FEBRUARY 25, 2000, UNLESS THE OFFER IS EXTENDED.


   THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED IN ACCORDANCE WITH THE TERMS OF THE OFFER AND NOT WITHDRAWN PRIOR TO
THE EXPIRATION DATE OF THE OFFER A NUMBER OF SHARES OF COMMON STOCK, PAR VALUE
$0.01 PER SHARE (THE "SHARES"), OF BALANCE BAR COMPANY (THE "COMPANY") WHICH,
TOGETHER WITH THE SHARES OWNED BY KRAFT FOODS, INC. ("PARENT") OR BB
ACQUISITION, INC. ("PURCHASER") REPRESENTS MORE THAN 50% OF THE SHARES
OUTSTANDING AND (II) THE EXPIRATION OR TERMINATION OF ANY APPLICABLE WAITING
PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS
AMENDED, BEFORE THE EXPIRATION DATE OF THE OFFER. THE OFFER IS ALSO SUBJECT TO
THE SATISFACTION OF CERTAIN OTHER CONDITIONS. SEE SECTION 17--"CERTAIN
CONDITIONS OF THE OFFER."

   THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
AGREEMENT AND PLAN OF MERGER DATED AS OF JANUARY 21, 2000 AMONG PARENT,
PURCHASER AND THE COMPANY, THE OFFER AND THE MERGER, AND DETERMINED THAT THE
OFFER AND THE MERGER DESCRIBED HEREIN ARE FAIR TO, AND IN THE BEST INTERESTS
OF, THE COMPANY AND ITS SHAREHOLDERS. THE BOARD OF DIRECTORS OF THE COMPANY
RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS TENDER THEIR SHARES PURSUANT TO THE
OFFER AND APPROVE AND ADOPT THE MERGER AGREEMENT.

   CERTAIN SHAREHOLDERS OF THE COMPANY HAVE ENTERED INTO SUPPORT AGREEMENTS
PURSUANT TO WHICH SUCH SHAREHOLDERS HAVE AGREED, AMONG OTHER THINGS, TO TENDER
PURSUANT TO THE OFFER, AND NOT TO WITHDRAW, ALL OF THEIR SHARES, WHICH
TOGETHER REPRESENT APPROXIMATELY 54% OF ALL OUTSTANDING SHARES (APPROXIMATELY
51% ON A FULLY-DILUTED BASIS).

                                   IMPORTANT

   Any shareholder of the Company wishing to tender Shares in the Offer must
(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 the Letter of Transmittal and all other required documents to the
Depositary (as defined herein) together with certificates representing the
Shares tendered or follow the procedure for book-entry transfer set forth in
Section 3 or (2) request such shareholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for the shareholder.
A shareholder having Shares registered in the name of a broker, dealer,
commercial bank, trust company, or other nominee must contact such person if
such shareholder wishes to tender such Shares.

   Any shareholder of the Company who wishes to tender Shares and cannot
deliver certificates representing such Shares and all other required documents
to the Depositary on or prior to the Expiration Date or who cannot comply with
the procedures for book-entry transfer on a timely basis may tender such
Shares pursuant to the guaranteed delivery procedure set forth in Section 3--
"Procedures for Accepting the Offer and Tendering Shares."

   Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Additional
copies of this Offer to Purchase, the Letter of Transmittal, the Notice of
Guaranteed Delivery and other related materials may be obtained from the
Information Agent or the Dealer Manager. Shareholders may also contact their
broker, dealer, commercial bank and trust companies or other nominee.

                     The Dealer Manager for the Offer is:
[CREDIT SUISSEX LOGO]
January 28, 2000
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
<S>                                                                        <C>
SUMMARY TERM SHEET........................................................   1

INTRODUCTION..............................................................   5

THE TENDER OFFER..........................................................   7

   1. Terms of the Offer..................................................   7

   2. Acceptance for Payment and Payment for Shares.......................   8

   3. Procedures for Accepting the Offer and Tendering Shares.............   9

   4. Withdrawal Rights...................................................  12

   5. Certain United States Federal Income Tax Considerations.............  12

   6. Price Range of Shares; Dividends....................................  13

   7. Certain Information Concerning the Company..........................  14

   8. Selected Financial Information......................................  14

   9. Certain Information Concerning Parent and Purchaser.................  16

  10. Source and Amount of Funds..........................................  17

  11. Background of the Offer; Past Contacts or Negotiations with the
   Company................................................................  17

  12. The Merger Agreement; Other Arrangements............................  19

  13. Purpose of the Offer; Plans for the Company.........................  25

  14. Certain Effects of the Offer........................................  27

  15. Dividends and Distributions.........................................  28

  16. Extension of Tender Period; Termination; Amendment..................  28

  17. Certain Conditions of the Offer.....................................  29

  18. Certain Legal Matters; Regulatory Approvals.........................  30

  19. Appraisal Rights....................................................  32

  20. Fees and Expenses...................................................  32

  21. Miscellaneous.......................................................  33

SCHEDULE I

  Directors and Executive Officers of Parent, Purchaser, Philip Morris
   Companies Inc. and Parent's Designees..................................  34
</TABLE>

                                       ii
<PAGE>

                              SUMMARY TERM SHEET

   BB Acquisition, Inc. is offering to purchase all of the outstanding common
stock of Balance Bar Company for $19.40 per share in cash. The following are
some of the questions you, as a shareholder of Balance Bar Company, may have
and answers to those questions. We urge you to read carefully the remainder of
this offer to purchase and the letter of transmittal because the information
in this summary term sheet is not complete. Additional important information
is contained in the remainder of this offer to purchase and the letter of
transmittal.

 .WHO IS OFFERING TO BUY MY SECURITIES?

   Our name is BB Acquisition, Inc. We are a Delaware corporation formed for
the purpose of making a tender offer for all of the common stock of Balance
Bar Company. We are a wholly owned subsidiary of Kraft Foods, Inc., a Delaware
corporation. Kraft Foods, Inc. is a wholly owned subsidiary of Philip Morris
Companies Inc., a Virginia corporation. See the "Introduction" to this Offer
to Purchase.

 .WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?

   We are seeking to purchase all of the outstanding common stock of Balance
Bar Company. See the "Introduction" to this Offer to Purchase.

 .HOW MUCH ARE YOU OFFERING TO PAY, WHAT IS THE FORM OF PAYMENT AND WILL I HAVE
TO PAY ANY FEES OR COMMISSIONS?

   We are offering to pay $19.40 per share, net to you, in cash. If you are
the record owner of your shares and you tender your shares to us in the offer,
you will not have to pay brokerage fees or similar expenses. If you own your
shares through a broker or other nominee, and your broker tenders your shares
on your behalf, your broker or nominee may charge you a fee for doing so. You
should consult your broker or nominee to determine whether any charges will
apply. See the "Introduction" to this Offer to Purchase.

 .DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?

   Kraft Foods, Inc. will be provided with approximately $268 million, by its
parent company, Philip Morris Companies Inc., which will be used to purchase
all shares validly tendered and not withdrawn in the offer and to provide
funding for the merger which is expected to follow the successful completion
of the offer in accordance with the terms and conditions of the merger
agreement among Balance Bar Company, BB Acquisition, Inc. and Kraft Foods,
Inc. We anticipate that all of these funds will be obtained from the existing
resources and internally generated funds of Philip Morris Companies Inc. See
Section 10--"Source and Amount of Funds" of this Offer to Purchase.

 .IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?

   The form of payment consists solely of cash. We have arranged for all of
our funding to come from the existing resources and internally generated funds
of Philip Morris Companies Inc. Therefore, we do not think our financial
condition is relevant to your decision whether to tender in the offer. See
Section 10--"Source and Amount of Funds" of this Offer to Purchase.

 .HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?

   You will have at least until 12:00 midnight, New York City time, on
February 25, 2000, assuming commencement on January 28, to decide whether to
tender your shares in the offer. Further, if you cannot deliver everything
that is required in order to make a valid tender by that time, you may be able
to use a guaranteed delivery procedure, which is described later in this offer
to purchase. See Section 1--"Terms of the Offer" of this Offer to Purchase.

                                       1
<PAGE>

 .CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?

   Subject to the terms of the merger agreement, we can extend the offer. We
have agreed in the merger agreement that:

  --we can extend the offer for up to 10 business days after April 30, 2000,
    if as of that date at least 90% of the outstanding shares have not been
    tendered; and

  --we will extend the offer, without the approval of Balance Bar Company, if
    on a scheduled expiration date any of the conditions to our offer are not
    satisfied but are capable of being satisfied, however, we are not
    required to extend the offer beyond April 30, 2000; and

  --we may extend the initial expiration date of the offer to include a
    subsequent offering period any time after April 30, 2000. A subsequent
    offering period, if one is included, will be an additional opportunity
    for shareholders to tender their shares and receive the offer
    consideration following the expiration of the offer. However, we do not
    currently intend to include a subsequent offering period although we
    reserve the right to do so.

   See Section 1--"Terms of the Offer" of this Offer to Purchase.

 .HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?

   If we extend the offer, we will inform American Stock Transfer & Trust
Company (which is the depositary for the offer) of that fact and will make a
public announcement of the extension, not later than 9:00 a.m., New York City
time, on the next business day after the day on which the offer was scheduled
to expire. See Section 1--"Terms of the Offer" of this Offer to Purchase.

 .WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?

  --We are not obligated to purchase any shares which are validly tendered
    unless the number of shares validly tendered and not withdrawn before the
    expiration date of the offer, together with the shares then owned by us
    and Kraft Foods, Inc., represents more than 50% of the shares of Balance
    Bar Company outstanding. We may, however, decide to purchase all shares
    tendered, even though such number may be 50% or less of the outstanding
    shares, in our sole discretion.

  --We are not obligated to purchase shares which are validly tendered if,
    among other things, there is a material adverse change in Balance Bar
    Company or its business or if the applicable waiting period under the
    Hart-Scott Rodino Antitrust Improvements Act of 1976 has not expired or
    been waived before we accept the shares which have been validly tendered.

   See Section 17--"Certain Conditions of the Offer" of this Offer to
Purchase.

 .HOW DO I TENDER MY SHARES?

   To tender shares, you must deliver the certificates representing your
shares, together with a completed letter of transmittal, to American Stock
Transfer & Trust Company, the depositary for the offer, not later than the
time the tender offer expires. If your shares are held in street name, the
shares can be tendered by your nominee through The Depositary Trust Company.
If you cannot get any document or instrument that is required to be delivered
to the depositary by the expiration of the tender offer, you may get a little
extra time to do so by having a broker, a bank or other fiduciary which is a
member of the Securities Transfer Agents Medallion Program or other eligible
institution guarantee that the missing items will be received by the
depositary within three Nasdaq National Market trading days. For the tender to
be valid, however, the depositary must receive the missing items within that
three trading day period. See Section 3--"Procedure for Accepting the Offer
and Tendering Shares" of this Offer to Purchase.


                                       2
<PAGE>

 .UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?

   You can withdraw shares at any time until the offer has expired and, if we
have not by March 27, 2000, agreed to accept your shares for payment, you can
withdraw them at any time after such time until we accept shares for payment.
This right to withdraw will not apply to any subsequent offering period
discussed in Section 1, if one is included. See Section 4--"Withdrawal Rights"
of this Offer to Purchase.

 .HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?

   To withdraw shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to the depositary while you
still have the right to withdraw the shares. See Section 4--"Withdrawal
Rights" of this Offer to Purchase.

 .WHAT DOES THE BALANCE BAR COMPANY BOARD OF DIRECTORS THINK OF THE OFFER?

   We are making the offer pursuant to an agreement and plan of merger among
us, Kraft Foods, Inc. and Balance Bar Company, which has been approved
unanimously by the Balance Bar Company board of directors. Balance Bar Company
approved the merger agreement, our tender offer and the proposed merger of us
with and into Balance Bar Company, with Balance Bar Company as the surviving
corporation and a wholly owned subsidiary of Kraft Foods, Inc. The Balance Bar
Company board of directors has determined that the offer and the merger are
fair to, and in the best interests of the shareholders of Balance Bar Company.
The Balance Bar Company board of directors recommends that you tender your
shares in the offer. See the "Introduction" to this Offer to Purchase.

 .HAVE ANY SHAREHOLDERS AGREED TO TENDER THEIR SHARES?

   Yes. Shareholders who own shares representing approximately 54% of the
outstanding common stock of Balance Bar Company (approximately 51% after
taking into consideration unexercised shares and other securities convertible
into common stock) have agreed to tender their shares in the offer.

 .IF A MAJORITY OF THE SHARES ARE TENDERED AND ACCEPTED FOR PAYMENT, WILL
BALANCE BAR COMPANY CONTINUE AS A PUBLIC COMPANY?

   No. If the merger takes place, Balance Bar Company no longer will be
publicly owned. Even if the merger does not take place, if we purchase all the
tendered shares, there may be so few remaining shareholders and publicly held
shares that Balance Bar Company common stock will no longer be eligible to be
traded through the Nasdaq National Market or on a securities exchange, there
may not be a public trading market for Balance Bar Company stock, and Balance
Bar Company may cease making filings with the Securities and Exchange
Commission or otherwise cease being required to comply with the SEC rules
relating to publicly held companies. See Section 14--"Certain Effects of the
Offer" of this Offer to Purchase.

 .WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL THE BALANCE BAR COMPANY
SHARES ARE NOT TENDERED IN THE OFFER?

   Yes. If we accept for payment and pay for at least a majority of the
outstanding shares of Balance Bar Company, BB Acquisition, Inc. will be merged
with and into Balance Bar Company. If that merger takes place, Kraft Foods,
Inc. will own all of the shares of Balance Bar Company and all remaining
shareholders of Balance Bar Company (other than Kraft Foods, Inc.) will
receive $19.40 per share in cash (or any other higher price per share which is
paid in the offer). See the "Introduction" to this Offer to Purchase.

                                       3
<PAGE>

 .IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?

   If the merger described above takes place, shareholders not tendering in
the offer will receive the same amount of cash per share that they would have
received had they tendered their shares in the offer. Therefore, if the merger
takes place, the only difference to you between tendering your shares and not
tendering your shares is that you will be paid earlier if you tender your
shares. However, if the merger does not take place, the number of shareholders
and of shares of Balance Bar Company which are still in the hands of the
public may be so small that there no longer will be an active public trading
market (or, possibly, there may not be any public trading market) for the
Balance Bar Company common stock. Also, as described above, Balance Bar
Company may cease making filings with the SEC or otherwise being required to
comply with the SEC rules relating to publicly held companies. See the
"Introduction" and Section 14--"Certain Effects of the Offer" of this Offer to
Purchase.

 .WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?

   On January 20, 2000, the last trading day before we announced the tender
offer and the possible subsequent merger, the last sale price of Balance Bar
Company common stock reported on the Nasdaq National Market was $14.13 per
share. Between December 31, 1999 and January 20, 2000, the price of a share of
Balance Bar Company common stock ranged between $14.94 and $11.88. We advise
you to obtain a recent quotation for shares of Balance Bar Company common
stock in deciding whether to tender your shares. See Section 6--"Price Range
of Shares; Dividends" of this Offer to Purchase.

 .WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?

   You can call D.F. King & Co., Inc. at (800) 628-8510 (toll free) or Credit
Suisse First Boston Corporation at (800) 646-4543 (toll free). D.F. King &
Co., Inc. is acting as the information agent and Credit Suisse First Boston
Corporation is acting as the dealer manager for our tender offer. See the back
cover of this Offer to Purchase.

                                       4
<PAGE>

To the Holders of Shares of Common Stock
of Balance Bar Company:

                                 INTRODUCTION

   BB Acquisition, Inc. ("Purchaser"), a Delaware corporation and a wholly
owned subsidiary of Kraft Foods, Inc. ("Parent"), hereby offers to purchase
all outstanding shares of common stock, par value $0.01 per share (the
"Shares"), of Balance Bar Company (the "Company") at a price of $19.40 per
Share, net to the seller in cash (the "Offer Price"), upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the
related Letter of Transmittal (which, together with any amendments or
supplements hereto or thereto, collectively constitute the "Offer").

   The Offer is being made pursuant to the Agreement and Plan of Merger dated
as of January 21, 2000 (the "Merger Agreement") among the Company, Purchaser
and Parent. The Merger Agreement provides that Purchaser will be merged with
and into the Company (the "Merger") as soon as practicable following the
satisfaction or waiver of each of the conditions to the Merger set forth in
the Merger Agreement. Following the Merger, the Company will continue as the
surviving corporation (the "Surviving Company"), wholly owned by Parent, and
the separate corporate existence of Purchaser will cease. Pursuant to the
Merger, each Share outstanding immediately prior to the effective time of the
Merger (the "Effective Time") (other than Shares owned beneficially or of
record by Parent or any subsidiary of Parent or held in the treasury of the
Company, all of which will be cancelled, and other than Shares which are held
by shareholders, if any, who properly exercise their appraisal rights under
the Delaware General Corporation Law (the "DGCL")), shall be converted into
the right to receive the per Share price paid in the Offer in cash, without
interest (the "Merger Consideration"). The Merger Agreement is more fully
described in Section 12--"The Merger Agreement; Other Arrangements," which
also contains a discussion of the treatment of stock options.

   Tendering shareholders who are record owners of their Shares and tender
directly to the Depositary (as defined below) 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 Purchaser pursuant to the Offer. Shareholders who hold
their Shares through a broker or bank should consult such institution as to
whether it charges any service fees. Parent or Purchaser will pay all charges
and expenses of Credit Suisse First Boston Corporation, as dealer manager
("Credit Suisse First Boston" or the "Dealer Manager"), American Stock
Transfer & Trust Company, as depositary (the "Depositary"), and D.F. King &
Co., Inc., as information agent (the "Information Agent"), incurred in
connection with the Offer. See Section 20--"Fees and Expenses."

   The Board of Directors of the Company (the "Company Board") has unanimously
approved the Merger Agreement, the Offer and the Merger, and determined that
the Offer and the Merger are fair to, and in the best interests of, the
Company and its shareholders. The Company Board recommends that the Company's
shareholders tender their Shares pursuant to the Offer and approve and adopt
the Merger Agreement.

   Salomon Smith Barney Inc., financial advisor to the Company ("Salomon Smith
Barney"), has delivered to the Company Board a written opinion dated January
21, 2000, to the effect that, as of such date and based on and subject to the
matters stated in such opinion, the $19.40 per Share cash consideration to be
received in the Offer and the Merger by the holders of Shares was fair from a
financial point of view to such holders (other than Parent and its
affiliates). The full text of Salomon Smith Barney's written opinion, which
describes the assumptions made, procedures followed, matters considered and
limitations on the review undertaken, is included as an annex to the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
under the Securities Exchange Act of 1934 (the "Exchange Act"), which is being
mailed to shareholders concurrently herewith. Shareholders are urged to read
the full text of such opinion carefully in its entirety.

                                       5
<PAGE>

   The Offer is conditioned upon, among other things, (1) there being validly
tendered in accordance with the terms of the Offer and not withdrawn prior to
the expiration date of the Offer a number of Shares which, together with the
Shares then owned by Parent or Purchaser, represents more than 50% of the
outstanding Shares (the "Minimum Condition") and (2) the expiration or
termination of any applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), before the
expiration date of the Offer. The Offer is also subject to the satisfaction of
certain other conditions. See Section 17--"Certain Conditions of the Offer."

   Pursuant to the Merger Agreement, the Company, as of the close of business
on January 21, 2000, there were outstanding 12,646,276 Shares. Neither Parent,
Purchaser nor any person listed on Schedule I hereto beneficially owns any
Shares. Accordingly, Purchaser believes that the Minimum Condition would be
satisfied if approximately 6,323,139 Shares are validly tendered and not
withdrawn prior to the expiration date of the Offer.

   Each of Thomas R. Davidson, James A. Wolfe and Richard G. Lamb have entered
into Support Agreements with the Parent dated as of January 21, 2000 (the
"Support Agreements") relating to an aggregate of 6,999,718 Shares
(approximately 54% of the outstanding Shares and approximately 51% on a fully
diluted basis) over which Messrs. Davidson, Wolfe and Lamb have represented to
Parent that they have voting and dispositive power. Pursuant to the Support
Agreements, among other things, Messrs. Davidson, Wolfe and Lamb have agreed
to tender all such Shares pursuant to the Offer and not withdraw such Shares
as long as the Support Agreements remain in effect. The Support Agreements are
subject to limited termination provisions. See Section 11--"The Merger
Agreement; Other Arrangements--The Support Agreements." As a result of the
Support Agreements, Parent and Purchaser expect the Minimum Condition to be
satisfied at the Expiration Date.

   The Merger Agreement provides that upon the acceptance for payment of
Shares pursuant to the Offer, Parent shall be entitled to designate at least
such number of directors, rounded up to the next whole number, on the Company
Board that equals the product of (1) the total number of directors on the
Company Board and (2) the percentage that the aggregate number of Shares
beneficially owned by Parent or its affiliates bears to the total number of
Shares then outstanding, and the Company will, upon request of Parent, take
all actions necessary to cause Parent's designees to be so elected including,
if necessary, seeking the resignations of one or more existing directors;
provided, however, that before the Effective Time, the Company Board will
always have at least two directors who are neither officers, directors,
shareholders or designees of Parent or any of its affiliates. See Section 12--
"The Merger Agreement; Other Arrangements."

   The Merger is subject to the satisfaction or waiver of certain conditions,
including, if required, the approval and adoption of the Merger Agreement by a
majority of the shareholders of the Company. If the Minimum Condition is
satisfied, Purchaser would have sufficient voting power to approve the Merger
without the affirmative vote of any other shareholder of the Company. The
Company has agreed, if required, to cause a meeting of its shareholders to be
held as promptly as practicable following consummation of the Offer for the
purpose of voting on the approval and adoption of the Merger and the Merger
Agreement. Parent and Purchaser have agreed to vote their Shares in favor of
the Merger. See Section 12--"The Merger Agreement; Other Arrangements."

   This Offer to Purchase and the related Letter of Transmittal contain
important information that should be read carefully before any decision is
made with respect to the Offer.

                                       6
<PAGE>

                               THE TENDER OFFER

1. Terms of the Offer

   Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension
or amendment), Purchaser will accept for payment and pay for all Shares
validly tendered prior to the Expiration Date and not properly withdrawn as
permitted under Section 4--"Withdrawal Rights." The term "Expiration Date"
means 12:00 midnight, New York City time, on February 25, 2000, unless
Purchaser, in accordance with the Merger Agreement, extends the period during
which the Offer is open, in which event the term "Expiration Date" means the
latest time and date on which the Offer, as so extended, expires.

   Purchaser expressly reserves the right, in its sole discretion (but subject
to the terms and conditions of the Merger Agreement and the applicable rules
and regulations of the Securities and Exchange Commission (the "Commission")),
at any time and from time to time, to extend the period of time during which
the Offer is open by giving oral or written notice of such extension to the
Depositary. During any such extension, all Shares previously tendered and not
withdrawn will remain subject to the Offer, subject to the rights of a
tendering shareholder to withdraw such shareholder's Shares. See Section 4--
"Withdrawal Rights."

   Notwithstanding the foregoing, Purchaser cannot, without the Company's
consent, extend the Offer beyond April 30, 2000, except that Parent can extend
the Offer for up to 10 business days if, as of such date, there have not been
tendered at least 90% of the outstanding Shares. In addition, if at any
scheduled expiration date any of the conditions of the Offer has not been
satisfied or waived by Parent, but are capable of being satisfied, Parent will
from time to time extend the Offer until such conditions are satisfied or
waived, provided that Parent will not be required to extend the Offer beyond
April 30, 2000. Subject to the foregoing restrictions, Parent has the right
(but is not obligated), in its sole discretion, to extend the period during
which the Offer is open by giving oral or written notices of extension to the
depositary in such offer and by making a public announcement of such
extension.

   Neither Purchaser nor Parent will, without the prior consent of the
Company, decrease the Offer Price or the number of Shares sought pursuant to
the Offer, or otherwise amend or add any term or condition of or to the Offer,
except as otherwise expressly permitted in or contemplated by the Merger
Agreement. The Company will not unreasonably withhold consent to a change in
the Expiration Date. Purchaser can waive any other condition to the Offer in
its discretion.

   Any extension, delay, termination, waiver or amendment will be followed as
promptly as practicable by public announcement thereof, such announcement in
the case of an extension to be made no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration Date.
Subject to applicable law (including Rules 14d-4(d), and 14e-1 under the
Exchange Act, which require that material changes be promptly disseminated to
shareholders in a manner reasonably designed to inform them of such changes)
and without limiting the manner in which Purchaser may choose to make any
public announcement, Purchaser shall have no obligation to publish, advertise
or otherwise communicate any such public announcement other than by issuing a
press release to the Dow Jones News Service.

   If Purchaser extends the Offer or if Purchaser is delayed in its acceptance
for payment of or payment (whether before or after its acceptance for payment
of Shares) for Shares or it is unable to pay for Shares pursuant to the Offer
for any reason, then, without prejudice to Purchaser's rights under the Offer,
the Depositary may retain tendered Shares on behalf of Purchaser, and such
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described herein under Section 4--"Withdrawal
Rights." However, the ability of Purchaser to delay the payment for Shares
that Purchaser has accepted for payment is limited by Rule 14e-1(c) under the
Exchange Act, which requires that a bidder pay the consideration offered or
return the securities deposited by or on behalf of shareholders promptly after
the termination or withdrawal of such bidder's offer, unless such bidder
elects to offer a subsequent offering period (a "Subsequent

                                       7
<PAGE>

Offering Period") under Rule 14d-11 under the Exchange Act and pays for Shares
tendered during the Subsequent Offering Period in accordance with that
section, and by the terms of the Merger Agreement, which require that
Purchaser pay for Shares that are tendered pursuant to the Offer as soon as
permitted after the Offer.

   If 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,
Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(d) and 14e-1 under the Exchange
Act. The minimum period during which an offer must remain open following
material changes in the terms of such offer or information concerning such
offer, other than a change in price or a change in the percentage of
securities sought, will depend upon the facts and circumstances then existing,
including the relative materiality of the changed terms or information. With
respect to a change in price or a change in the percentage of securities
sought, a minimum period of 10 business days is generally required to allow
for adequate dissemination to shareholders.

   Pursuant to Rule 14d-11 under the Exchange Act, Purchaser may, subject to
certain conditions, include a Subsequent Offering Period following the
expiration of the Offer on the Expiration Date. Rule 14d-11 provides that
Purchaser may include a Subsequent Offering Period so long as, among other
things, (1) the Offer remains open for a minimum of 20 business days and has
expired, (2) the Offer is for all outstanding Shares, (3) Purchaser accepts
and promptly pays for all Shares tendered during the Offer, (4) Purchaser
announces the results of the Offer, including the approximate number and
percentage of Shares deposited no later than 9:00 a.m. New York City time on
the next business day after the Expiration Date and immediately begins the
Subsequent Offering Period, (5) Purchaser immediately accepts and promptly
pays for Shares as they are tendered during the Subsequent Offering Period,
and (6) Purchaser pays the Offer Price for all Shares tendered in the
Subsequent Offering Period. Purchaser will be able to include a Subsequent
Offering Period if it satisfies the conditions above. In a public release, the
Securities and Exchange Commission (the "Commission") expressed the view that
the inclusion of a Subsequent Offering Period would constitute a material
change to the terms of the Offer requiring Purchaser to disseminate new
information to shareholders in a manner reasonably calculated to inform them
of such change sufficiently in advance of the Expiration Date (generally five
business days). In the event Purchaser elects to include a Subsequent Offering
Period, it will notify shareholders of the Company consistent with the
requirements of the Commission.

   A Subsequent Offering Period, if one is included, is not an extension of
the Offer. A Subsequent Offering Period would be an additional period of time,
following the expiration of the Offer, in which shareholders may tender Shares
not tendered into the Offer. Purchaser does not currently intend to include a
Subsequent Offering Period in the Offer, although it reserves the right to do
so in its sole discretion.

   Pursuant to Rule 14d-7 under the Exchange Act, no withdrawal rights will
apply to Shares tendered into a Subsequent Offering Period and no withdrawal
rights apply during the Subsequent Offering Period with respect to Shares
tendered in the Offer and accepted for payment. The same consideration, the
Offer Price, will be paid to shareholders tendering Shares in the Offer or in
a Subsequent Offering Period, if one is included.

   The Company has provided Purchaser with the Company's shareholder list and
security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of
Transmittal will be mailed to record holders of Shares whose names appear on
the Company's shareholder list and will be furnished, for subsequent
transmittal to beneficial owners of Shares, to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the shareholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing.

2. Acceptance for Payment and Payment for Shares

   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), Purchaser will accept for payment and will pay for
all Shares validly tendered prior to the Expiration Date and not properly
withdrawn, promptly after the

                                       8
<PAGE>

Expiration Date. Subject to the Merger Agreement and compliance with Rule 14e-
1(c) under the Exchange Act, Purchaser expressly reserves the right to delay
payment for Shares in order to comply in whole or in part with any applicable
laws, including, without limitation, the HSR Act. See Section 18--"Certain
Legal Matters; Regulatory Approvals."

   For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Shares pursuant to
the Offer. Upon the terms and subject to the conditions of the Offer, payment
for Shares accepted for payment pursuant to the Offer will be made by deposit
of the Offer Price therefor with the Depositary, which will act as agent for
tendering shareholders for the purpose of receiving payments from Purchaser
and transmitting such payments to tendering shareholders whose Shares have
been accepted for payment.

   Under no circumstances will interest on the Offer Price for Shares be paid,
regardless of any delay in making such payment.

   In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (1) the
certificates evidencing such Shares (the "Share Certificates") or confirmation
(a "Book-Entry Confirmation") of a book-entry transfer of such Shares into the
Depositary's account at The Depositary Trust Company (the "Book-Entry Transfer
Facility") pursuant to the procedures set forth in Section 3--"Procedures for
Accepting the Offer and Tendering Shares," (2) the Letter of Transmittal (or a
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 (as defined below) in lieu of the Letter of Transmittal and (3) any
other documents required under the Letter of Transmittal.

   If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer, or if Share Certificates are
submitted evidencing more Shares than are tendered, Share Certificates
evidencing unpurchased Shares will be returned, without expense to the
tendering shareholder (or, in the case of Shares tendered by book-entry
transfer into the Depositary's account at the Book-Entry Transfer Facility
pursuant to the procedure set forth in Section 3--"Procedures for Accepting
the Offer and Tendering Shares," such Shares will be credited to an account
maintained at the Book-Entry Transfer Facility), as promptly as practicable
following the expiration or termination of the Offer.

   Purchaser reserves the right to transfer or assign, in whole or from time
to time in part, to one or more of its affiliates, the right to purchase all
or any portion of the Shares tendered pursuant to the Offer, but any such
transaction or assignment will not relieve 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.

3. Procedures for Accepting the Offer and Tendering Shares.

   Valid Tenders. In order for a shareholder validly to tender Shares pursuant
to the Offer, either (1) the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, together with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message in
lieu of the Letter of Transmittal) and any other documents required by the
Letter of Transmittal must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase and either the
Share Certificates evidencing tendered Shares must be received by the
Depositary at such address or such Shares must be tendered pursuant to the
procedure for book-entry transfer described below and a Book-Entry
Confirmation must be received by the Depositary, in each case prior to the
Expiration Date, or (2) the tendering shareholder must comply with the
guaranteed delivery procedures described below. The term "Agent's Message"
means a message transmitted by the Book-Entry Transfer Facility to and
received by the Depositary and forming a part of a Book-Entry Confirmation
which states that the Book-Entry Transfer Facility has received an express
acknowledgment from the participant in the Book-Entry Transfer Facility
tendering the Shares, which are the subject of such

                                       9
<PAGE>

Book-Entry Confirmation, that such participant has received and agrees to be
bound by the terms of the Letter of Transmittal and that Purchaser may enforce
such agreement against such participant.

   Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility 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 the system of the Book-Entry
Transfer Facility may make a book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures for such transfer. However, although delivery
of Shares may be effected through book-entry transfer at the Book-Entry
Transfer Facility, either the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, together with any required signature
guarantees, or an Agent's Message in lieu of the Letter of Transmittal, and
any other required documents, must, in any case, 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, or the tendering shareholder must comply with
the guaranteed delivery procedure described below.

   Delivery of documents to the Book-Entry Transfer Facility does not
constitute delivery to the Depositary.

   The method of delivery of Share Certificates, the Letter of Transmittal and
all other required documents, including delivery through the Book-Entry
Transfer Facility, is at the option and risk of the tendering shareholder, and
the delivery will be deemed made only when actually received by the Depositary
(including, in the case of a book-entry transfer a 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 where Shares are tendered (1) by a registered holder of Shares who
has not completed either the box labeled "Special Delivery Instructions" or
the box labeled "Special Payment Instructions" on the Letter of Transmittal or
(2) for the account of a firm which is participating in the Security Transfer
Agents Medallion Program, the New York Stock Exchange Medallion Signature
Guarantee Program or the Stock Exchange Medallion Program (each an "Eligible
Institution" and collectively "Eligible Institutions"). In all other cases,
all signatures on a Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 1 of the Letter of Transmittal. If a Share
Certificate is registered in the name of a person or persons other than the
signer of the Letter of Transmittal, or if payment is to be made or delivered
to, or a Share Certificate not accepted for payment or not tendered is to be
issued, in the name of a person other than the registered holder(s), then the
Share Certificate must be endorsed or accompanied by appropriate duly executed
stock powers, in either case signed exactly as the name(s) of the registered
holder(s) appear on the Share Certificate, with the signature(s) on such Share
Certificate or stock powers guaranteed by an Eligible Institution as provided
in the Letter of Transmittal. See Instructions 1 and 5 of the Letter of
Transmittal.

   Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and the Share Certificates evidencing such shareholder's Shares are
not immediately available or such shareholder cannot deliver the Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date, or such shareholder cannot complete the procedure for
delivery by book-entry transfer on a timely basis, such Shares may
nevertheless be tendered; provided that all of the following conditions are
satisfied:

     (1) such tender is made by or through an Eligible Institution;

     (2) a properly completed and duly executed Notice of Guaranteed
  Delivery, substantially in the form made available by Purchaser, is
  received prior to the Expiration Date by the Depositary as provided below;
  and

     (3) the Share Certificates (or a Book-Entry Confirmation) evidencing all
  tendered Shares, in proper form for transfer, in each case together with
  the Letter of Transmittal (or a facsimile thereof), properly

                                      10
<PAGE>

  completed and duly executed, with any required signature guarantees (or, in
  the case of a book-entry transfer, an Agent's Message), and any other
  documents required by the Letter of Transmittal are received by the
  Depositary within three Nasdaq National Market trading days after the date
  of execution of such Notice of Guaranteed Delivery.

   The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by telegram or facsimile transmission to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in the
form of Notice of Guaranteed Delivery made available by Purchaser.

   In all cases, Shares shall not be deemed validly tendered unless a properly
completed and duly executed Letter of Transmittal (or a facsimile thereof) is
received by the Depositary.

   Notwithstanding any other provision of this Offer to Purchase, payment for
Shares tendered and accepted for payment pursuant to the Offer will be made
only after timely receipt by the Depositary of the Share Certificates
evidencing such Shares, or a Book-Entry Confirmation of the delivery of such
Shares, and the Letter of Transmittal (or a 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 any other
documents required by the Letter of Transmittal.

   Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by Purchaser in its sole discretion, which
determination shall be final and binding on all parties. Purchaser reserves
the absolute right to reject any and all tenders determined by it not to be in
proper form or the acceptance for payment of which may, in the opinion of its
counsel, be unlawful. Subject to the terms of the Merger Agreement, Purchaser
also reserves the absolute right to waive any condition 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 and irregularities have been cured or
waived. None of Purchaser, the Dealer Manager, 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. 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.

   Other Requirements. By executing the Letter of Transmittal as set forth
above, a tendering shareholder irrevocably appoints designees of Purchaser as
such shareholder's proxies, each with full power of substitution, in the
manner set forth in the Letter of Transmittal, to the full extent of such
shareholder's rights with respect to the Shares tendered by such shareholder
and accepted for payment by Purchaser (with respect to any and all other
Shares or other securities issued or issuable in respect of such Shares on or
after the date of this Offer to Purchase). All such proxies shall be
considered coupled with an interest in the tendered Shares. Such appointment
will be effective when, and only to the extent that, Purchaser accepts such
Shares for payment. Upon such acceptance for payment, all prior proxies given
by such shareholder with respect to such Shares (and such other Shares and
securities) will be revoked without further action, and no subsequent proxies
may be given nor any subsequent written consent executed by such shareholder
(and, if given or executed, will not be deemed to be effective) with respect
thereto. The designees of Purchaser will, with respect to the Shares for which
the appointment is effective, be empowered to exercise all voting and other
rights of such shareholder as they in their sole discretion may deem proper at
any annual or special meeting of the Company's shareholders or any adjournment
or postponement thereof, by written consent in lieu of any such meeting or
otherwise. Purchaser reserves the right to require that, in order for Shares
to be deemed validly tendered, immediately upon Purchaser's payment for such
Shares, Purchaser must be able to exercise full voting rights with respect to
such Shares.

   The tender of Shares pursuant to any one of the procedures described above
will constitute the tendering shareholder's acceptance of the Offer, as well
as the tendering shareholder's representation and warranty that (1) such
shareholder owns the Shares being tendered within the meaning of Rule 14e-4
promulgated under the Exchange Act, (2) the tender of such Shares complies
with Rule 14e-4 and (3) such shareholder has the full power and authority to
tender and assign the Shares tendered, as specified in the Letter of
Transmittal.

                                      11
<PAGE>

Purchaser's acceptance for payment of Shares tendered pursuant to the Offer
will constitute a binding agreement between the tendering shareholder and
Purchaser upon the terms and subject to the conditions of the Offer.

   To prevent backup withholding of United States federal income tax with
respect to payment of the purchase price of Shares purchased pursuant to the
Offer, each shareholder must provide the Depositary with such shareholder's
correct taxpayer identification number or social security number and certify
that such shareholder is not subject to backup federal income tax withholding
by completing the substitute Form W-9 in the Letter of Transmittal. If backup
federal income tax withholding applies to a shareholder, the Depositary is
required to withhold 31% of any payments made to such shareholder. See
Instruction 8 of the Letter of Transmittal.

4. Withdrawal Rights.

   Tenders of Shares made pursuant to the Offer are irrevocable, except that
such Shares may be withdrawn at any time prior to the Expiration Date and,
unless theretofore accepted for payment by Purchaser pursuant to the Offer,
may also be withdrawn at any time after March 27, 2000 (or such later date as
may apply if the Offer is extended). If Purchaser extends the Offer, is
delayed in its acceptance for payment of Shares or is unable to accept Shares
for payment pursuant to the Offer for any reason, then, without prejudice to
Purchaser's rights under the Offer, the Depositary may, nevertheless, on
behalf of Purchaser, retain tendered Shares, and such Shares may not be
withdrawn except to the extent that tendering shareholders are entitled to
withdrawal rights as described herein.

   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 page of this Offer to
Purchase. Any such notice of withdrawal must specify the name, address and
taxpayer identification number of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the registered
holder of such Shares, if different from that of the person who tendered such
Shares. If Share Certificates evidencing Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the
physical release of such Share Certificates, the serial numbers shown on such
Share Certificates must be submitted to the Depositary and the signature(s) on
the notice of withdrawal must be guaranteed by an Eligible Institution, unless
such Shares have been tendered for the account of an Eligible Institution. If
Shares have been tendered pursuant to the procedure for book-entry transfer as
set forth in Section 3--"Procedures for Accepting the Offer and Tendering
Shares," any notice of withdrawal must specify the name and number of the
account at the Book-Entry Transfer Facility to be credited with the withdrawn
Shares.

   All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by Purchaser, in its sole
discretion, whose determination will be final and binding. None of Purchaser,
the Dealer Manager, the Depositary, the Information Agent or any other person
will be under 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.

   Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn
will thereafter be deemed not to have been validly tendered for purposes of
the Offer. However, withdrawn Shares may be re-tendered at any time prior to
the Expiration Date by following one of the procedures described in Section
3--"Procedures for Accepting the Offer and Tendering Shares."

   No withdrawal rights will apply to Shares tendered into a Subsequent
Offering Period and no withdrawal rights apply during the Subsequent Offering
period with respect to Shares tendered in the Offer and accepted for payment.
See Section 1--"Terms of the Offer."

5. Certain United States Federal Income Tax Considerations.

   The receipt of cash pursuant to the Offer or the Merger will constitute a
taxable transaction for U.S. federal income tax purposes under the Internal
Revenue Code of 1986, as amended (the "Code"), and may also constitute a
taxable transaction under applicable state, local, foreign and other tax laws.
As a result, a tendering

                                      12
<PAGE>

shareholder will generally recognize gain or loss for federal income tax
purposes in an amount equal to the difference between the amount of cash
received by the shareholder pursuant to the Offer or the Merger and such
shareholder's aggregate adjusted tax basis in the Shares tendered and
purchased pursuant to the Offer or the Merger. Gain or loss will be calculated
separately for each block of Shares tendered and purchased pursuant to the
Offer or the Merger. If tendered Shares are held by a tendering shareholder as
capital assets (within the meaning of Section 1221 of the Code), any gain or
loss recognized by the tendering shareholder will constitute capital gain or
loss, and will constitute long-term capital gain or loss if the tendering
shareholder held the underlying Shares for more than 12 months as of the date
of disposition.

   A shareholder that tenders Shares may be subject to backup withholding
unless the shareholder provides its taxpayer identification number and
certifies that such number is correct or properly certifies that it is
awaiting a taxpayer identification number, or unless an exemption applies. A
shareholder who does not furnish its taxpayer identification number may be
subject to a penalty imposed by the Internal Revenue Service. See Section 3--
"Procedures for Accepting the Offer and Tendering the Shares."

   If backup withholding applies to a shareholder, the Depositary is required
to withhold 31% from payments to such shareholder. Backup withholding is not
an additional tax. Rather, the amount of the backup withholding can be
credited against the federal income tax liability of the person subject to the
backup withholding, provided that the required information is given to the
Internal Revenue Service. If backup withholding results in an overpayment of
tax, a refund can be obtained by the shareholder upon filing an appropriate
income tax return.

   The foregoing discussion may not be applicable with respect to Shares
received pursuant to the exercise of employee stock options or otherwise as
compensation or to shareholders who perfect their appraisal rights under the
DGCL or with respect to holders of Shares who are subject to special tax
treatment under the Code, such as non-U.S. persons, life insurance companies,
dealers in securities, tax-exempt organizations and financial institutions,
and may not apply to a holder of Shares in light of such holder's individual
circumstances.

   The summary of tax consequences set forth above is for general information
only and is based on the law as currently in effect. Shareholders are urged to
consult their own tax advisors to determine the particular tax consequences to
them (including the application and effect of any state, local or foreign
income and other tax laws) of the Offer and the Merger.

6. Price Range of Shares; Dividends.

   The Shares began trading on the Nasdaq National Market under the symbol
"BBAR" on June 2, 1998. The following table sets forth, for the periods
indicated, the high and low sale prices per Share. Share prices are as
reported on the Nasdaq National Market based on published financial sources.
To date, the Company has paid no dividends on the Shares.

<TABLE>
<CAPTION>
                                                                 Common Stock
                                                                ---------------
                                                                 High     Low
                                                                ------- -------
      <S>                                                       <C>     <C>
      Fiscal Year 1998:
        Second Quarter (beginning June 2)...................... $14 3/4 $10 3/4
        Third Quarter..........................................  17 3/4   7 1/4
        Fourth Quarter.........................................  13 1/4   7 1/2
      Fiscal Year 1999:
        First Quarter..........................................  12 1/8   8 1/4
        Second Quarter.........................................   7 3/4   4 7/8
        Third Quarter..........................................   7 1/2   5 3/8
        Fourth Quarter.........................................    15     5 5/8
      Fiscal Year 2000:
        First Quarter (through January 27).....................  19 1/4  11 7/8
</TABLE>

                                      13
<PAGE>

   Pursuant to the Merger Agreement, the Company has represented to Parent
that, on January 21, 2000, there were 21,646,276 outstanding Shares.

   On January 20, 2000, the last full day of trading before the public
announcement of the execution of the Merger Agreement, the closing price of
the Shares on the Nasdaq National Market was $14.13 per Share. On January 27,
2000, the last full day of trading before the commencement of the Offer, the
closing price of the Shares on the Nasdaq National Market, was $19.19 per
Share. Shareholders are urged to obtain a current market quotation for the
Shares.

7. Certain Information Concerning the Company.

   General. The Company is a Delaware corporation with its principal offices
located at 1015 Mark Avenue, Carpenteria, California 93013. The telephone
number of the Company is (805) 566-0234. According to the Company's Form 10-K
for the fiscal year ended December 31, 1998, the Company develops and markets
branded natural food and beverage products in convenient, good-tasting,
balanced nutritional formulations. The Company's product lines are targeted to
a broad consumer base in the health food and beverage market. The Company
markets its products to consumers for a wide variety of uses, included
snacking, meal replacement, fitness, weight management and diabetic nutrition.
The Company sells its products in natural foods, mass merchandise, club,
grocery, convenience, sports and drug stores.

   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. Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, and at the Commission's regional offices
located at Seven World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Information regarding the public reference facilities may be obtained from the
Commission by telephoning 1-800-SEC-0330. The Company's filings are also
available to the public on the Commission's Internet site
(http://www.sec.gov). Copies of such materials may also be obtained by mail
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such material should also be
available for inspection at the offices of Nasdaq National Market Operations,
1735 K Street, N.W., Washington D.C. 20006.

8. Selected Financial Information.

   The following selected consolidated financial data relating to the Company
has been taken or derived from the audited financial statements contained in
the Company's annual reports on Form 10-K for the years ended December 31,
1998 and 1997 and the unaudited operating results provided to Parent for the
year ended December 31, 1999. More comprehensive financial information is
included in the Company's annual report on Form 10-K and quarterly reports on
Form 10-Q and the other documents filed by the Company with the Commission,
and the financial data set forth below is qualified in its entirety by
reference to such reports and other documents and all of the financial
statements and 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 above.

                                      14
<PAGE>

                              BALANCE BAR COMPANY
                  SELECTED CONSOLIDATED FINANCIAL INFORMATION
                (in thousands, except ratio and per share data)

<TABLE>
<CAPTION>
                                                     Year Ended December 31,
                                                   ----------------------------
                                                      1999      1998     1997
                                                   ----------- -------  -------
                                                   (unaudited)
<S>                                                <C>         <C>      <C>
Income Statement Data:
Sales.............................................  $100,855   $81,656  $39,634
Gross Profit......................................    50,872    39,334   19,833
Net Income........................................     7,455     5,112    1,660
Basic Earnings Per Share..........................      0.63      0.48     0.18
Diluted Earnings Per Share........................      0.58      0.41     0.15
Ratio of Earnings to Fixed Charges................       151x       41x      44x

<CAPTION>
                                                          December 31,
                                                   ----------------------------
                                                      1999      1998     1997
                                                   ----------- -------  -------
                                                   (unaudited)
<S>                                                <C>         <C>      <C>
Balance Sheet Data:
Current Assets....................................    30,682    25,846    9,438
Total Assets......................................    35,511    26,981   10,796
Current Liabilities...............................     7,493     7,054    6,464
Long-Term Debt, net...............................       --        --       228
Book Value Per Share..............................      2.37      1.76     0.44
</TABLE>

   Except as otherwise stated in this Offer to Purchase, the information
concerning the Company contained herein has been taken from or is based upon
reports and other documents on file with the Commission or otherwise publicly
available. Although neither Purchaser nor Parent have any knowledge that would
indicate that any statements contained herein based upon such reports and
documents are untrue, neither Purchaser nor Parent takes any responsibility
for the accuracy or completeness of the information contained in such reports
and other documents or for any failure by the Company to disclose events that
may have occurred and may affect the significance or accuracy of any such
information but that are unknown to Purchaser or Parent.

   Certain Projections. The Company does not, as a matter of course, make
public any forecasts as to its future financial performance. However, in
connection with Parent's review of the transactions contemplated by the Offer
and the Merger, the Company has provided Parent with certain projected
financial information concerning the Company. Such information included, among
other things, the Company's projections of consolidated sales, gross profit,
income before income taxes, net income and diluted earnings per share for the
Company for the years 2000 through 2002. Set forth below is a summary of such
projections. These projections should be read together with the financial
statements of the Company referred to herein.

<TABLE>
<CAPTION>
                                                       Year Ended December 31,
                                                      --------------------------
                                                        2000     2001     2002
                                                      -------- -------- --------
                                                        (in thousands, except
                                                             share data)
      <S>                                             <C>      <C>      <C>
      Sales.......................................... $147,531 $199,035 $261,638
      Gross Profit...................................   72,601   96,258  125,665
      Income Before Income taxes.....................   17,780   23,524   30,307
      Net Income.....................................   10,490   13,644   17,578
      Diluted Earnings Per Share.....................     0.80     1.03     1.32
</TABLE>

   It is the understanding of Parent and Purchaser that the projections were
not prepared with a view to public disclosure or compliance with published
guidelines of the Commission or the guidelines established by the American
Institute of Certified Public Accountants regarding projections or forecasts
and are included herein

                                      15
<PAGE>

only because such information was provided to Parent and Purchaser. The
projections do not purport to present operations in accordance with generally
accepted accounting principles and the Company's independent auditors have not
examined or compiled the projections presented herein, and accordingly assume
no responsibility for them. These forward-looking statements (as that term is
defined in the Private Securities Litigation Reform Act of 1995) are subject
to certain risks and uncertainties that could cause actual results to differ
materially from the projections. The Company has advised Purchaser and Parent
that its internal financial forecasts (upon which the projections provided to
Parent and Purchaser were based in part) are, in general, prepared solely for
internal use and capital budgeting and other management decisions, and are
subjective in many respects and thus susceptible to interpretations and
periodic revision based on actual experience and business developments. The
projections also reflect numerous assumptions (not all of which were provided
to Parent and Purchaser), all made by management of the Company, with respect
to industry performance, general business, economic, market and financial
conditions and other matters, including effective tax rates consistent with
historical levels for the Company, all of which are difficult to predict, many
of which are beyond the Company's control and none of which were subject to
approval by Parent or Purchaser. Accordingly, there can be no assurance that
the assumptions made in preparing the projections will prove accurate, and
actual results may be materially greater or less than those contained in the
projections. The inclusion of information the projections herein should not be
regarded as an indication that any of Parent, Purchaser, the Company or their
respective affiliates or representatives considered or consider the
projections to be a reliable prediction of future events, and the projections
should not be relied upon as such. None of Parent, Purchaser, the Company or
any of their respective affiliates or representatives has made, or makes any
representation to any person regarding the ultimate performance of the Company
compared to the information contained in the projections and none of them
intends to update or otherwise revise the projections to reflect circumstances
existing after the date when made or to reflect the occurrence of future
events even in the event that any or all of the assumptions underlying the
projections are shown to be in error. It is expected that there will be
differences between actual and projected results, and actual results may be
materially higher or lower than those projected.

9. Certain Information Concerning Parent and Purchaser.

   General. Parent is a Delaware corporation with its principal offices
located at Three Lakes Drive, Northfield, Illinois 60093. The telephone number
of Parent is (847) 646-2000. Parent is the largest processor and marketer of
retail packaged foods in the United States. A wide variety of cheese,
processed meat products, coffee and grocery products are manufactured and
marketed in the United States and Canada by Parent.

   Purchaser is a Delaware corporation with its principal offices located at
Three Lakes Drive, Northfield, Illinois 60093. The telephone number of
Purchaser is (847) 646-2000. Purchaser is a wholly owned subsidiary of Parent.
Purchaser was organized on January 18, 2000 and has not carried on any
activities other than in connection with the Merger Agreement.

   Philip Morris Companies Inc. is a Virginia corporation with its principal
offices located at 120 Park Avenue, New York, New York 10017. The telephone
number of Philip Morris Companies Inc. is (917) 663-5000. Philip Morris
Companies Inc. is a holding company whose principal wholly-owned subsidiaries,
Philip Morris Incorporated, Philip Morris International Inc., Kraft Foods,
Inc., and Miller Brewing Company, are engaged in the manufacture and sale of
various consumer products. A wholly owned subsidiary of the Company, Philip
Morris Capital Corporation, engages in various financing and investment
activities. Philip Morris Companies Inc. is the largest consumer packaged
goods company in the world. Philip Morris Incorporated is the largest
cigarette company in the United States.

   The name, citizenship, business address, business phone number, principal
occupation or employment and five-year employment history for each of the
directors and executive officers of Philip Morris Companies Inc., Parent and
Purchaser and certain other information are set forth in Schedule I hereto.


                                      16
<PAGE>

   Except as described in this Offer to Purchase, (1) none of Parent,
Purchaser nor, to the best knowledge of Parent and Purchaser, any of the
persons listed in Schedule I to this Offer to Purchase or any associate or
majority-owned subsidiary of Parent or Purchaser or any of the persons so
listed beneficially owns or has any right to acquire, directly or indirectly,
any Shares and (2) none of Parent, Purchaser nor, to the best knowledge of
Parent and Purchaser, 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, the Support Agreements or as
otherwise described in this Offer to Purchase, none of Parent, Purchaser nor,
to the best knowledge of Parent and Purchaser, 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, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of loans, guarantees against loss,
guarantees of profits, division of profits or loss or the giving or
withholding of proxies.

   Except as set forth in this Offer to Purchase, none of Parent, Purchaser
nor, to the best knowledge of Parent and Purchaser, 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, there
have been no contracts, negotiations or transactions between Parent or any of
its subsidiaries or, to the best knowledge of 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. None of the persons listed in Schedule I have, during the past five
years, been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors). None of the persons listed in Schedule I have,
during the past five years, been a party to any judicial or administrative
proceeding (except for matters that were dismissed without sanction of
settlement) that resulted in a judgment, decree or final order enjoining the
person from future violations of, or prohibiting activities subject to federal
or state securities, laws, or a finding of any violation of federal or state
securities laws.

10. Source and Amount of Funds.

   The total amount of funds required by Purchaser to purchase Shares pursuant
to the Offer and the Merger is estimated to be approximately $268 million.
Purchaser will obtain such funds from Parent. Parent will obtain such funds
from Philip Morris Companies Inc., its parent company. Philip Morris Companies
Inc. will obtain such funds from internally generated funds.

11. Background of the Offer; Past Contacts or Negotiations with the Company.

   On September 24, 1999, the Company had discussions with representatives of
Parent's European division to investigate the possibility of entering into a
business relationship.

   In early October 1999, William J. Eichar, Vice President Mergers &
Acquisitions of the Parent, called James A. Wolfe, the President and Chief
Executive Officer of the Company, to express Parent's potential interest in
exploring a business relationship with the Company.

   On October 28, 1999, at the invitation of Mr. Wolfe, representatives of the
Company and Parent, including Mr. Wolfe, Mr. Eichar, and Ms. Elizabeth Smith,
the Director of Strategy of Parent's Beverages and Desserts Division, met at
the Company's headquarters in Carpinteria, California to discuss the parties'
respective businesses.

   On November 1, 1999, Mr. Eichar received a call from a representative of
Salomon Smith Barney, the Company's financial advisor, notifying him that the
Company had commenced a process to solicit third party indications of interest
in the possible acquisition of the Company.

   On November 2, 1999, Parent and Company entered into a confidentiality
agreement and Parent subsequently received an offering memorandum and related
materials about the Company.

                                      17
<PAGE>

   As requested in the Company's bid sale process instructions, Parent
submitted a preliminary, non-binding indication of interest on November 17,
1999. On November 30, 1999, representatives of Parent attended a management
presentation by the Company held in Chicago, Illinois. In December 1999 and
early January 2000, representatives of Parent conducted a due diligence
investigation of the Company.

   On January 12, 2000, Parent submitted a bid which stated that it was
prepared to make a cash tender offer for all outstanding Shares at $18.95 per
Share, subject to expeditious completion of due diligence, confirmation of
mutually acceptable employment terms and conditions with certain members of
the Company's senior management, execution of the Support Agreements and other
customary conditions.

   On January 13, 2000, a representative of Salomon Smith Barney called Mr.
Eichar and a representative of Credit Suisse First Boston Corporation ("Credit
Suisse First Boston"), Parent's financial advisor, to clarify certain issues
relating to Parent's proposal. In the morning of January 14, 2000, the Salomon
Smith Barney representative again called Credit Suisse First Boston to discuss
further the terms of Parent's January 12 bid. Credit Suisse First Boston was
informed that the Company's Board was scheduled to meet that afternoon and
would consider any revision to Parent's proposal made prior to that time.
Credit Suisse First Boston indicated that it would discuss the situation with
Parent immediately and report to Salomon Smith Barney prior to the Board
Meeting. Following discussion with Parent, Credit Suisse First Boston, at
Parent's direction, informed Salomon Smith Barney that Parent was prepared to
increase the amount of its January 12 bid to $19.45 per Share, subject to the
understanding that the Company would have a certain projected level of cash at
the time of the closing of the Merger, and that Parent would, before
commencing negotiations, receive assurances that the Principal Stockholders
would sign the Support Agreements substantially in the form described herein
and that appropriate employment arrangements with senior officers could be
negotiated. Following receipt of such assurances from the Company, O'Melveny &
Myers then forwarded to Parent's counsel revised drafts of the Merger
Agreement and related documents.

   Commencing on January 15 to January 19, representatives of Parent and the
Company met in Los Angeles to negotiate a definitive merger agreement and
other ancillary agreements (including the Support Agreements). During such
period and thereafter, representatives of Parent and the Company also met to
complete remaining due diligence.

   By January 20, all due diligence issues were addressed in a manner
acceptable to Parent, and Parent proceeded to conclude negotiations with the
Company based on the proposed terms of the transaction as of January 20.

   During final review of the Merger Agreement, on the evening of January 20,
representatives of the Company and Parent discussed cash expenditures to be
made by the Company prior to consummation of the Merger that would reduce the
Company's projected net cash as of the projected closing date position by
approximately $0.05 per Share versus previous assumptions used to calculate
the $19.45 per Share proposal. As a result of this anticipated cash reduction,
the Company and Parent agreed to adjust the per Share price to $19.40 per
Share.

   On January 20 the Board of Directors of the Company met to review and
approve the Offer, the Merger, the Merger Agreement and the Support
Agreements. Following such meeting, Parent, the Purchaser and the Company
agreed to execute and deliver the Merger Agreement on January 21, and the
Stockholders and Parent and the Purchaser agreed to execute and deliver the
Support Agreements on January 21. All such agreements were executed and
delivered on January 21. Also on January 21, 2000, an Organizational
Transition Plan providing for, among other things, employment arrangements
with employees of the Company was signed by the Company, Parent and Messrs.
Wolfe, Thomas Flahie, Richard Lamb and Thomas Davidson. Thereafter the Company
and Parent issued a joint press release announcing the transaction.

   On January 28, 2000, in accordance with the Merger Agreement, Parent
commenced the Offer.

                                      18
<PAGE>

12. The Merger Agreement; Other Arrangements.

The Merger Agreement

   The following is a summary of the material provisions of the Merger
Agreement, a copy of which is filed as an exhibit to the Tender Offer
Statement on Schedule TO filed by Parent and Purchaser pursuant to Rule 14d-3
of the General Rules and Regulations under the Exchange Act with the
Commission in connection with the Offer (the "Schedule TO"). The summary is
qualified in its entirety by reference to the Merger Agreement, which is
deemed to be incorporated by reference herein.

   The Offer. The Merger Agreement provides for the making of the Offer. The
obligation of Purchaser to accept for payment and pay for Shares tendered
pursuant to the Offer is subject to the satisfaction or waiver of the Minimum
Condition and certain other conditions that are described in Section 17--
"Certain Conditions of the Offer." Pursuant to the Merger Agreement, without
the consent of the Company, Parent may not extend the Offer beyond April 30,
2000, except for a 10 day extension if at least 90% of the Shares have not
been tendered and can also elect a Subsequent Offering Period following
acceptance of Shares for purchase to the extent permitted by Rule 14d-11 of
the Exchange Act. In addition, if at any scheduled expiration date the
conditions of the Offer have not been satisfied or waived by Parent, but are
capable of being satisfied, Parent will from time to time extend the Offer
until such conditions are satisfied or waived, provided that Purchaser is not
required to extend the Offer beyond April 30, 2000. Subject to the foregoing
restrictions, Parent has the right (but is not obligated), in its sole
discretion, to extend the period during which the Offer is open by giving oral
or written notices of extension to the depositary in such offer by making a
public announcement of such extension.

   Neither Parent nor Purchaser will, without the prior consent of the
Company, decrease the Offer Price or the number of Shares sought pursuant to
the Offer, or otherwise amend or add any term or condition of or to the Offer,
except as otherwise expressly permitted in or contemplated by the Merger
Agreement. The Company will not unreasonably withhold consent to a change in
the expiration date of the Offer. Parent can waive any other condition to the
Offer in its discretion.

   For information concerning directors of the Company prior to consummation
of the Merger, see Section 13--"Purpose of the Offer; Plans for the Company."

   Directors. The Merger Agreement provides that effective upon the acceptance
for payment of Shares, Parent shall be entitled to designate at least such
number of directors, rounded up to the next whole number, on the Company Board
that equals the product of (i) the total number of directors on the Company
Board (determined after giving effect to the directors elected pursuant to
this sentence) and (ii) the percentage that the aggregate number of Shares
beneficially owned by Parent or its affiliates (including Shares accepted for
payment pursuant to the Offer) bears to the total number of Shares then
outstanding and the Company will, upon request of Parent promptly take all
actions necessary to cause Parent's designees to be so elected, including, if
necessary, seeking the resignations of one or more existing directors;
provided, however, that before the Effective Time, the Board will always have
at least two members who are neither officers, directors, shareholders or
designees of Parent or any of its affiliates (the "Parent Insiders").
Following the election or appointment of the Parent's designees and before the
Effective Time, any amendment or termination of the Merger Agreement by the
Company, or any extension by the Company of the time for the performance of
any of the obligations or other acts of Parent or Purchaser or waiver of any
of the Company's rights thereunder, will require the concurrence of a majority
of the directors of the Company then in office who are not Parent Insiders, if
such amendment termination, extension, waiver or action would have an adverse
effect on the minority shareholders of the Company.

   Equity Derivatives. As of the Effective Time, the outstanding options to
purchase Shares, warrants, calls, and other rights to acquire Shares,
including securities convertible into or exchangeable for Shares
(collectively, "Equity Derivatives"), will be canceled, redeemed or
repurchased by the Company, and each holder of Equity Derivatives will receive
the aggregate Merger Consideration that such holder would have received
pursuant to this Offer if the holder had tendered the Shares underlying such
Equity Derivatives, less the aggregate exercise or purchase price of such
underlying Shares (subject to any applicable withholding tax).

                                      19
<PAGE>

   The Merger. The Merger Agreement provides that as soon as practicable after
the satisfaction or waiver of each of the conditions to the Merger set forth
therein, Purchaser will be merged with and into the Company. Following the
Merger, the separate existence of Purchaser will cease, and the Company will
continue as the Surviving Company, wholly owned by Parent.

   If required by the DGCL, the Company shall call and hold a meeting of its
shareholders (the "Company Shareholders' Meeting") promptly following
consummation of the Offer for the purpose of voting upon the approval of the
Merger Agreement. At any such meeting all outstanding Shares then owned by
Parent or Purchaser or any subsidiary of Parent shall be voted in favor of
approval of the Merger.

   Pursuant to the Merger Agreement, each Share outstanding immediately before
the Effective Time (other than Shares owned beneficially or of record by
Parent or any subsidiary of Parent or held in the treasury of the Company, all
of which will be cancelled, and other than Shares which are held by
shareholders, if any, who properly exercise their appraisal rights under the
DGCL) will be converted into the right to receive the Merger Consideration
except as described below. Shareholders who perfect their right to appraisal
of their Shares under the DGCL shall be entitled to the amounts determined
pursuant to such proceedings. See Section 13--"Purpose of the Offer; Plans for
the Company."

   Representations and Warranties. The Merger Agreement contains customary
representations and warranties of the parties thereto, including
representations by the Company as to its corporate existence and power,
capitalization, corporate authorizations, subsidiaries, Commission filings,
financial statements, absence of certain changes (including any material
adverse effect in the business, assets, operations, conditions (financial or
otherwise), results of operations, properties, earnings, customer and supplier
relations (including co-packers), or contractual rights considered as a whole,
or employee or sales representative relations, considered as a whole, that
would be reasonably expected to have, either individually or in the aggregate,
a Material Adverse Effect (as defined in the Merger Agreement) on the
Company), absence of undisclosed liabilities, government authorizations,
absence of litigation, compliance with laws, employee matters, labor matters,
certain contracts, taxes, intellectual property, brokers, the opinion of the
Company's financial advisor, noncontravention, title to properties, insurance,
affiliated transactions, required shareholder vote and state takeover laws.

   Company Covenants. The Merger Agreement contains various customary
covenants of the parties thereto. A description of certain of these covenants
follows:

   Conduct of Business. Prior to the Effective Time, except as otherwise set
forth in the Merger Agreement or the Disclosure Schedule thereto, or approved
by Parent, the Company will:

     (1) conduct its business in the ordinary course and such that, as of the
  Effective Time, the closing conditions set forth in the Merger Agreement
  will be met;

     (2) use commercially reasonable efforts to (a) maintain, preserve and
  renew all customer and supplier relationships, material contracts,
  licenses, authorizations and permits necessary to the conduct of its
  business, (b) retain key employees, (c) preserve the goodwill of its
  business and (d) otherwise satisfy its contractual obligations;

     (3) continue its insurance policies in full force;

     (4) pay and discharge all taxes and material claims (unless contested in
  good faith) and refrain from making any material tax election;

     (5) comply with (a) all other obligations the Company has or incurs
  pursuant to material contracts, as such obligations become due (unless
  contested in good faith) and (b) all applicable laws;

     (6) not engage in an extraordinary corporate transaction;

     (7) not (a) incur indebtedness other than under the Company's existing
  credit line, (b) make any loans, advances or capital contributions to, or
  investments in, any person or entity, subject to limited exceptions, (c)
  enter into, terminate or amend any material contract other than in
  accordance with past practice or (d) make any capital expenditure in excess
  of $250,000 that is not currently budgeted;

                                      20
<PAGE>

     (8) not amend its certificate of incorporation or bylaws;

     (9) not (a) authorize, issue or provide for the issuance of capital
  stock or Equity Derivatives, (b) enter into any contract with respect to
  the purchase or voting of capital stock or Equity Derivatives, (c) adjust,
  split, combine, reclassify or amend any material term of the Shares or (d)
  make any other change in its capital structure;

     (10) not declare, set aside or pay dividends or purchase or redeem any
  capital stock or Equity Derivative;

     (11) maintain its accounting policies in accordance with past practice
  and generally accepted accounting principles;

     (12) not settle or compromise any suit or claim for an amount which
  would exceed $1 million; and

     (13) not take any action or fail to take action that would result in a
  breach of any representation or warranty in the Merger Agreement.

   No Solicitation. The Company will not directly or indirectly (1) solicit,
initiate or encourage any Acquisition Proposal, (2) engage in negotiations or
substantive discussions concerning, provide any non-public information to any
third party relating to, or take any other actions to facilitate an
Acquisition Proposal or (3) enter into any agreement relating to an
Acquisition Proposal. The term "Acquisition Proposal" is defined in the Merger
Agreement to mean any inquiry or proposal that constitutes or would reasonably
be expected to lead to a proposal or offer for a merger or certain other
extraordinary transactions. The foregoing will not prohibit the Company from
complying with Rule 14e-2 under the Exchange Act.

   Notwithstanding the foregoing, the Company may furnish, at any time before
the closing of the Offer, non-public information to, or enter discussions with
respect to any unsolicited bona fide written proposal for an Acquisition
Proposal, but only to the extent (1) the Company Board determines after
consultation with counsel that doing so is required by its fiduciary duties
and, (2)(a) the Acquisition Proposal identifies a price or range of values and
(b) the Acquisition Proposal constitutes a Superior Proposal and (3) before
taking action on such Acquisition Proposal the Company receives an executed
confidentiality and standstill agreement no less favorable to the Company than
the agreement executed by Parent. The term "Superior Proposal" means an
Acquisition Proposal that is reasonably capable of being completed on
substantially the terms proposed and would result in greater value to
shareholders than the transaction contemplated by the Merger Agreement.

   The Company has agreed to notify Purchaser promptly, and in any event
within 24 hours, after receiving an Acquisition Proposal.

   Parent Covenants, Indemnification and Insurance. The Merger Agreement
provides that after the Effective Time, Parent will cause the Surviving
Company to indemnify and hold harmless each present and former director and
officer of the Company from liabilities for acts or omissions occurring at or
prior to the Effective Time to the fullest extent required under applicable
law and the Company's certificate of incorporation and bylaws. In addition,
the Merger Agreement provides that for six years after the Effective Time, the
Surviving Company will maintain directors' and officers' liability insurance
covering those persons who are currently covered by the Company's existing
directors' and officers' liability insurance policy on terms substantially no
less advantageous to such persons than such existing insurance provided that
the Surviving Company will not be obligated to pay more than 200% of the
current annual premiums.

   Employees, Employee Benefits. The Merger Agreement contains certain
covenants relating to the treatment of employees of the Company after
consummation of the Offer. Parent (1) intends to cause the Surviving Company
to provide benefits to employees of the Surviving Company that are no less
favorable than those in effect on the date of the Merger Agreement; (2) will
honor all legally imposed obligations relating to employment matters; (3) will
pay 1999 annual bonuses under the Company's 1999 Bonus plan; and (4) will
recognize time served with the Company for determination of eligibility and
vesting under benefit plans of the Surviving Company (but not for level or
accrual of benefits).


                                      21
<PAGE>

   Conditions to the Merger. The obligations of Parent, Purchaser and the
Company to consummate the Merger are subject to the satisfaction of the
following conditions at or prior to the Effective Time:

      (1) if required by the DGCL, the approval of the Merger Agreement by
  the shareholders of the Company in accordance with such law; and

      (2) the absence of any injunction, order, statute, regulation, rule
  order or judgment that shall prohibit consummation of the Merger.

   In addition, the obligations of Parent and Purchaser to consummate the
Merger are further subject to the satisfaction of following conditions at or
prior to the Effective Time:

     (1) performance by the Company in all material respects of the covenants
  and agreements set forth in the Merger Agreement;

     (2) the truth and correctness in all material respects of the
  representations and warranties of the Company set forth in the Merger
  Agreement;

     (3) the absence of a material adverse change in the condition (financial
  or otherwise), results of operations, business, prospects or contractual
  rights of the Company, except for such changes resulting from compliance
  with the Merger Agreement or the Offer;

     (4) the absence of any action commenced after completion of the Offer
  deemed likely to succeed, that seeks an injunction, restraining order or
  other order to prohibit, restrain, invalidate or set aside consummation of
  the Merger or would have, if successful, a Material Adverse Effect (as
  defined in the Merger Agreement) on the Company;

     (5) the absence of any condition or event that has resulted in, or would
  reasonably be expected to result in a Material Adverse Effect;

     (6) the Company shall have obtained all material consents, waivers,
  approvals, authorizations or waivers;

     (7) the Company shall have taken all action for the cancellation,
  redemption or repurchase of Equity Derivatives; and

     (8) delivery by the Company of an officer's certificate as to the
  Company's satisfaction of the foregoing conditions.

   The obligations of the Company to consummate the Merger are further subject
to the satisfaction of the following conditions at or prior to the Effective
Time:

     (1) performance by the Parent and Purchaser in all material respects of
  the covenants and agreements set forth in the Merger Agreement;

     (2) the truth and correctness in all material respects of the
  representations and warranties of Purchaser and Parent set forth in the
  Merger Agreement; and

     (3) delivery by Purchaser and Parent of an officer's certificate as to
  their satisfaction of the foregoing conditions.

   Termination. The Merger Agreement may be terminated at any time prior to
the Effective Time:

     (1) by consent of Purchaser, Parent and the Company;

     (2) by either Parent or the Company if there has been any material
  breach of any representation, warranty, covenant or agreement on the part
  of the non-terminating party, which breach will cause any condition to the
  obligation of the terminating party to consummate the Merger not to be
  satisfied, and the same is not cured within five days after notice to the
  party in breach;

     (3) by either Parent or the Company, if the Merger shall not have been
  consummated by June 30, 2000 (provided that the right to terminate shall
  not be available to any party whose failure to fulfill any obligation under
  the Merger Agreement has caused or resulted in the failure of the Merger to
  occur on or before such date);

                                      22
<PAGE>

     (4) by either Parent or the Company, if any governmental entity
  prohibits the transaction by final, nonappealable order, decree or ruling;

     (5) by the Company before closing of the Offer, upon notice to Parent,
  if the Company Board withdraws or adversely modifies its approval or
  recommendation of the Merger Agreement, or Merger, or the Company executes
  an agreement relating to a Superior Proposal, and is not in violation of
  the nonsolicitation provisions of the Merger Agreement;

     (6) by Parent, upon notice to the Company, if the Company Board has
  failed to recommend or withdrawn or modified or publicly announced an
  intention to take any one of the foregoing actions in a manner materially
  adverse to Parent or the Company Board approves, recommends or enters into
  any Acquisition Proposal or publicly announces its intention to do so;

     (7) by Parent, if another person or group acquires beneficial ownership
  of more than 50% of the Shares;

     (8) by Parent, if it is not in breach of the Merger Agreement and, as a
  result of the failure of the conditions to the Offer, as described in
  Section 17 of this Offer to Purchase, has: (a) failed to commence the Offer
  within the time required by Regulation 14D under the Exchange Act, (b)
  terminated the Offer without purchasing Shares or (c) failed to accept
  payment for the Shares before April 30, 2000, which date may be extended
  upon certain events;

     (9) by Parent, if the Offer terminates due to the failure of the Minimum
  Condition;

     (10) by Parent, if the shareholders of the Company fail to approve the
  Merger and the Merger Agreement;

     (11) by Parent, if the Company or any of its affiliates materially and
  knowingly breach the nonsolicitation covenants; and

     (12) by the Company, if the Company is not in material breach under the
  Merger Agreement, and Parent has: (a) failed to commence the Offer within
  the time required by Regulation 14D under the Exchange Act, (b) terminated
  the Offer without purchasing Shares or (c) failed to accept for payment
  Shares pursuant to the Offer before April 30, 2000, which date may be
  extended upon certain events.

   If the Merger Agreement is terminated, it will become void and there will
be no liability on the part of the Company, Parent or Purchaser, except for
obligations regarding confidentiality and press releases and certain fees and
expenses payable pursuant to the Merger Agreement (see "Fees and Expenses"),
provided, however, that no such termination shall relieve any party from
liability for any willful breach of the Merger Agreement.

   Fees and Expenses. Except as otherwise specified in the following sentence,
all costs and expenses incurred in connection with the Merger Agreement and
the transactions contemplated thereby shall be paid by the party incurring
such cost or expense.

   If this Agreement is terminated as set forth below, the Company will within
two business days of such termination pay to Parent, by wire transfer in
immediately available funds, a fee of $5 million (the "Termination Fee") and
an amount (not to exceed $1 million) to reimburse Parent for its documented
out of pocket expenses incurred in connection with the Transactions (the
"Expense Payment"). The Termination Fee and Expense Payment apply where the
Merger Agreement is terminated:

     (1) as a result of the Company's intentional and willful breach;

     (2) as a result of (a) the Company Board failing to recommend or
  withdrawing or modifying in a manner materially adverse to the Parent, its
  approval or recommendation as to the Merger Agreement, the Offer or the
  Merger as a result of an Acquisition Proposal or a Superior Proposal or (b)
  termination of the Merger Agreement by the Company Board concurrently with
  the execution of an Acquisition Agreement in connection with a Superior
  Proposal in the manner permitted by the terms of the Merger Agreement;

     (3) As a result of the acquisition by another person or group of
  beneficial ownership of Shares representing more than 50% of the Shares;


                                      23
<PAGE>

     (4) as a result of any of the following in the event that the Minimum
  Condition is not satisfied and either an Acquisition Proposal has been
  publicly announced or the Company Board has failed to recommend or has
  withdrawn, or modified in a manner materially adverse to the Parent,
  approval or recommendation by the Company Board of this Agreement, the
  Offer or the Merger:

       (a) failure of any of the conditions to the Offer, as described in
    Section 17 of this Offer to Purchase has resulted in Parent's failure
    to commence the Offer within the time required by Regulation 14D under
    the Exchange Act, termination of the Offer without purchasing Shares
    pursuant to the Offer, or failure to accept payment for the Shares
    pursuant to the Offer before April 30, 2000, subject to extension in
    certain events.

       (b) failure of the Offer due to the failure of the Minimum
    Condition; or

       (c) failure of the shareholders of the Company to approve the Merger
    and the Merger Agreement; or

     (5) as a result of a material and knowing breach by the Company or any
  of its affiliates of the non-solicitation covenants contained in the Merger
  Agreement.

   Notwithstanding the foregoing, the Company will within two business days of
termination pay only the Expense Payment to Parent by wire transfer in
immediately available funds if the Merger Agreement is terminated by the
Company's material breach (where such breach is neither intentional nor
wilful). The Company will pay Parent the Termination Fee and the Expense
Payment if within one year of termination by Parent due to failure of the
conditions to the Offer described in Section 17 of this Offer to Purchase an
Acquisition Agreement that would constitute an Acquisition Proposal is entered
into or consummated.

   Amendments and Waivers. Any provision of the Merger Agreement may be
amended or waived at any time; provided, however, that after adoption of the
Merger Agreement by the shareholders of the Company, no amendment may be made
which decreases the Offer Price or in any other way materially and adversely
affects the rights of such shareholders (other than termination in accordance
with its terms) without the approval of such shareholders.

The Support Agreements.

   The following is a summary of the material provisions of the Support
Agreements, the form of which is filed as an exhibit to the Schedule TO. The
summary is qualified in its entirety by reference to the form of Support
Agreement, which is deemed incorporated herein by reference. On January 21,
2000, Parent entered into Support Agreements with each of Thomas R. Davidson,
James A. Wolfe, Richard G. Lamb and any entities controlled by Messrs.
Davidson, Wolfe and Lamb (collectively, the "Sellers"), with respect to the
6,999,718 Shares owned by the Sellers representing approximately 54% of the
outstanding Shares (approximately 51% on a fully-diluted basis) (the "Tender
Shares"). Pursuant to the Support Agreements the Sellers agreed to tender and
not withdraw their shares (or cause the record owner of such shares to validly
tender), pursuant to and in accordance with the terms of the Offer, as soon as
practicable after commencement of the Offer but in no event later than five
business days after the date of commencement of the Offer. The Sellers further
agreed that, until the Expiration Date (defined below), at any meeting of the
shareholders of the Company (or in any written consent in lieu thereof), they
will each:

     (1) vote the Tender Shares in favor of the Merger;

     (2) vote the Tender Shares against any action or agreement that would
  result in a breach of any covenant, representation or warranty or any other
  obligation or agreement of the Company under the Merger Agreement; and

     (3) vote the Tender Shares against any action or agreement (other than
  the Merger Agreement or the transactions contemplated thereby) that would
  impede, interfere with, delay, postpone or attempt to discourage the Merger
  or the Offer.


                                      24
<PAGE>

   With respect to each Support Agreement, the term "Expiration Date" means the
first to occur of

     (1) the Effective Time,

     (2) termination or withdrawal of the Offer by Parent or Purchaser, and

     (3) written notice of termination of the Support Agreement by Parent to
  Seller.

   In order to facilitate the commitment of the Sellers provided above, each
Seller granted to Parent an irrevocable proxy to vote all Tender Shares with
respect to all matters on which the Tender Shares are entitled to vote at all
times from the execution of the Support Agreement through the Expiration Date.

   Each Seller agreed that, except as contemplated by the Support Agreement, he
shall not:

     (1) transfer or consent to any transfer of, any or all of the Tender
  Shares or any interest therein;

     (2) enter into any contract, option or other agreement or understanding
  with respect to any transfer of any or all of the Tender Shares or any
  interest therein;

     (3) grant any proxy, power-of-attorney or other authorization in or with
  respect to the Tender Shares;

     (4) deposit the Tender Shares into a voting trust or enter into a voting
  agreement or arrangement with respect to the Tender Shares; or

     (5) take any other action that would in any way restrict, limit or
  interfere with the performance of Seller's obligations under the Support
  Agreement or the transactions contemplated hereby or by the Merger
  Agreement or which would make any representation or warranty of Seller
  under the Support Agreement untrue or incorrect; provided that Seller may
  transfer the Tender Shares to one or more affiliates or one or more members
  of Seller's immediate family, or a trust, the sole beneficiaries of which
  are members of Seller's immediate family, if any such transferee agrees in
  writing (in form and substance reasonably satisfactory to Purchaser) to be
  bound by the terms of the Support Agreement.

   Each Seller agreed that during the term of their Support Agreement, he will
comply with the non-solicitation provisions of Sections 6.6(a)-(c) and 6.6.1 of
the Merger Agreement as though such provisions by their terms applied to Seller
and his affiliates and advisors.

   Pursuant to the Support Agreements each Seller waived any rights of
appraisal or rights to dissent from the Merger that he may have. The Support
Agreements contained customary representations and warranties of the Sellers
including representations relating to title and ownership of the Tender Shares,
power to enter into the Support Agreement and noncontravention.

   Organizational Transition Plan. Representatives of Parent have discussed
with senior management of the Company their continued employment with the
Company. On January 21, 2000, Parent agreed to employment terms with certain
officers of the Company. These employment terms are discussed more fully in the
Organizational Transition Plan, which was filed as Exhibit 19 to the Parent's
Schedule TO, dated January 28, 2000, and is incorporated by reference herein.

13. Purpose of the Offer; Plans for the Company

   Purpose of the Offer. The purpose of the Offer is to acquire control of, and
the entire equity interest in, the Company. The purpose of the Merger is to
acquire all outstanding Shares not tendered and purchased pursuant to the
Offer. If the Offer is successful, Purchaser intends to consummate the Merger
as promptly as practicable.


                                       25
<PAGE>

   The Company Board has approved the Merger and adopted the Merger Agreement.
Depending upon the number of Shares purchased by Purchaser pursuant to the
Offer, the Company Board may be required to submit the Merger Agreement to the
Company's shareholders for approval at a shareholder's meeting convened for
that purpose in accordance with Delaware Law. If shareholder approval is
required, the Merger Agreement must be approved by a majority of all votes
entitled to be cast at such meeting.

   If the Minimum Condition is satisfied, Purchaser will have sufficient
voting power to approve the Merger Agreement at the shareholders' meeting
without the affirmative vote of any other shareholder. If Purchaser acquires
at least 90% of the Shares pursuant to the Offer, the Merger may be
consummated without a shareholders' meeting and without the approval of the
Company's shareholders. The Merger Agreement provides that Purchaser will be
merged into the Company and that the certificate of incorporation and bylaws
of Purchaser will be the certificate of incorporation and bylaws of the
Surviving Company following the Merger provided that, at the Effective Time,
such certificate of incorporation shall be amended to provide that the name of
the corporation shall be "Balance Bar Company."

   Under the DGCL, holders of Shares do not have appraisal rights as a result
of the Offer. In connection with the Merger, however, shareholders of the
Company may have the right to dissent and demand appraisal of their Shares
under the DGCL. Dissenting shareholders who comply with the applicable
statutory procedures under the DGCL will be entitled to receive a judicial
determination of the fair value of their Shares (exclusive of any element of
value arising from the accomplishment or expectation of the Merger) and to
receive payment of such fair value in cash. Any such judicial determination of
the fair value of the Shares could be based upon considerations other than or
in addition to the price per Share paid in the Merger and the market value of
the Shares. In Weinberger v. UOP, Inc., the Delaware Supreme Court stated,
among other things, that "proof of value by any techniques or methods which
are generally considered acceptable in the financial community and otherwise
admissible in court" should be considered in an appraisal proceeding.
Shareholders should recognize that the value so determined could be higher or
lower than the price per Share paid pursuant to the Offer or the consideration
per Share to be paid in the Merger. Moreover, Purchaser may argue in an
appraisal proceeding that, for purposes of such a proceeding, the fair value
of the Shares is less than the price paid in the Offer or the Merger.

   In addition, several decisions by Delaware courts have held that, in
certain circumstances a controlling shareholder of a company involved in a
merger has a fiduciary duty to other shareholders which requires that the
merger be fair to such other shareholders. In determining whether a merger is
fair to minority shareholders, Delaware courts have considered, among other
things, the type and amount of consideration to be received by the
shareholders and whether there was fair dealing among the parties. The
Delaware Supreme Court stated in Weinberger and Rabkin v. Philip A. Hunt
Chemical Corp. that although the remedy ordinarily available to minority
shareholders in a cash-out merger is the right to appraisal described above, a
damages remedy or injunctive relief may be available if a merger is found to
be the product of procedural unfairness, including fraud, misrepresentation or
other misconduct.

   Plans for the Company. Pursuant to the terms of the Merger Agreement,
effective upon the acceptance for payment of Shares pursuant to the Offer,
Parent currently intends to seek maximum representation on the Company Board,
subject to the Company's right to maintain through the Effective Time at least
two directors who are not officers or affiliates of Purchaser, Parent or any
of their respective subsidiaries. Purchaser currently intends, as soon as
practicable after consummation of the Offer, to consummate the Merger.

   In connection with its consideration of the Offer, Purchaser and Parent
have made a preliminary review of various potential business strategies that
they intend to pursue in the event that Purchaser acquires control of the
Company. Such strategies are expected to include a significant expansion of
the sales of the existing products as well as the launch of new products
currently under development. In addition, the Parent will explore potential
reporting relationships, including alignment of activities of the Company with
the Parent's Beverages and Desserts Division.


                                      26
<PAGE>

   Except as described above or elsewhere in this Offer to Purchase, Purchaser
and Parent have no present plans that would relate to or result in an
extraordinary corporate transaction involving the Company or any of their
respective subsidiaries (such as a merger, reorganization, liquidation,
relocation of any operations or sale or other transfer of a material amount of
assets), any sale or transfer of a material amount of assets of the Company or
any of its subsidiaries, any change in the Company Board or management, any
material change in the Company's capitalization or dividend policy or any
other material change in the Company's corporate structure or business.

14. Certain Effects of the Offer

   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, which could adversely affect the liquidity and
market value of the remaining Shares held by shareholders other than
Purchaser. Purchaser cannot predict whether the reduction in the number of
Shares that might otherwise trade publicly would have an adverse or beneficial
effect on the market price for, or marketability of, the Shares or whether
such reduction would cause future market prices to be greater or less than the
Offer Price.

   Stock Quotation. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the standards for continued inclusion
in the Nasdaq National Market. If, as a result of the purchase of Shares
pursuant to the Offer, the Shares no longer meet the criteria for continuing
inclusion in the Nasdaq National Market, the market for the Shares could be
adversely affected. According to the Nasdaq's National Market's published
guidelines, the Shares would not be eligible for continued listing if, among
other things, the number of Shares publicly held falls below 750,000, the
number of beneficial holders of Shares falls below 400 (round lot holders) or
the aggregate market value of such publicly-held Shares does not exceed $5
million. If the Shares were no longer eligible for inclusion in the Nasdaq
National Market, they may nevertheless continue to be included in the Nasdaq
SmallCap Market unless, among other things, the public float was less than
500,000 Shares, or there were fewer than 300 shareholders (round lot holders)
in total, or the market value of public float was less than $1 million. If the
Shares are no longer eligible for inclusion in the Nasdaq National Market or
the Nasdaq SmallCap Market, the Shares might still be quoted on the OTC
Bulletin Board. The extent of the public market for the Shares and the
availability of such quotations would, however, depend upon the number of
holders of such Shares remaining at such time, the interest in maintaining a
market in such Shares on the part of securities firms, the possible
termination of registration of such Shares under the Exchange Act as described
below, and other factors.

   Margin Regulations. The Shares are currently "margin securities" under the
Regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of
allowing brokers to extend credit on the collateral of the Shares. Depending
upon factors similar to those described above regarding the market for the
Shares and stock 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 are currently registered under
Section 12(g) of the Exchange Act. Such registration 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 no longer applicable to the Company, such as the short-swing
profit recovery provisions of Section 16(b) of the Exchange Act, the
requirement of furnishing a proxy statement pursuant to Section 14(a) of the
Exchange Act 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. 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 promulgated under the Securities

                                      27
<PAGE>

Act of 1933, as amended, 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 inclusion on the Nasdaq National
Market. Parent and Purchaser currently intend to seek to cause the Company to
terminate the registration of the Shares under the Exchange Act as soon after
consummation of the Offer as the requirements for termination of registration
are met.

15. Dividends and Distributions.

   The Merger Agreement provides that from the date of the Merger Agreement to
the Effective Time, without the prior approval of Parent, the Company will not
declare, set aside, pay or make any dividend or other distribution or payment
(whether in cash, stock or property) with respect to, or purchase or redeem,
any capital stock or Equity Derivatives.

16. Extension of Tender Period; Termination; Amendment.

   Purchaser cannot, without the Company's consent, extend the Offer beyond
April 30, 2000, except that Purchaser can extend the Offer for up to ten
business days if, as of such date, there have not been tendered at least
ninety percent of the outstanding Shares. In addition, if at any scheduled
expiration date any of the conditions of the Offer have not been satisfied or
waived by Purchaser, but are capable of being satisfied, Purchaser will from
time to time extend the Offer until such conditions are satisfied or waived,
provided that Purchaser will not be required to extend the Offer beyond April
30, 2000. Subject to the foregoing restrictions, Purchaser has the right (but
is not obligated), in its sole discretion, to extend the period during which
the Offer is open by giving oral or written notices of extension to the
depositary in such offer and by making a public announcement of such
extension.

   Neither Purchaser nor Parent will, without the prior consent of the
Company, decrease the Offer Price or the number of Shares sought pursuant to
the Offer, or otherwise amend or add any term or condition of or to the Offer,
except as otherwise expressly permitted in or contemplated by the Merger
Agreement. The Company will not unreasonably withhold consent to a change in
the Expiration Date of the Offer. Purchaser can waive any other condition to
the Offer in its discretion.

   If, with the Company's consent, Purchaser decreases the percentage of
Shares being sought or increases or decreases the consideration to be paid for
Shares pursuant to the Offer and the Offer is scheduled to expire at any time
before the expiration of a period of 10 business days from, and including, the
date that notice of such increase or decrease is first published, sent or
given in the manner specified below, the Offer will be extended until the
expiration of such period of 10 business days. If Purchaser makes a material
change in the terms of the Offer (other than a change in price or percentage
of securities sought) or in the information concerning the Offer, or waives a
material condition of the Offer, Purchaser will extend the Offer, if required
by applicable law, for a period sufficient to allow the Company's shareholders
to consider the amended terms of the Offer. In a published 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 such offer and that
the waiver of a condition such as the Minimum Condition is a material change
in the terms of an offer. The release states that an offer should remain open
for a minimum of five business days from the date the material change is first
published, sent or given to security holders, and that if material changes are
made with respect to information that approaches the significance of price and
share levels, a minimum of 10 business days may be required to allow adequate
dissemination and investor response.

   Purchaser also reserves the right, in its sole discretion, in the event any
of the conditions specified in Section 17--"Certain Conditions to the Offer"
shall not have been satisfied and so long as Shares have not theretofore been
accepted for payment, to delay (except as otherwise required by applicable
law) acceptance for payment of or payment for Shares or, except as described
above, to terminate the Offer and not accept for payment or pay for Shares.


                                      28
<PAGE>

   If Purchaser extends the period of time during which the Offer is open, is
delayed in accepting for payment or paying for Shares or is unable to accept
for payment or pay for Shares pursuant to the Offer for any reason, then,
without prejudice to Purchaser's rights under the Offer, the Depositary may,
on behalf of Purchaser, retain all Shares tendered, and such Shares may not be
withdrawn except as otherwise provided in Section 4--"Withdrawal Rights." The
reservation by Purchaser of the right to delay acceptance for payment of or
payment for Shares is subject to applicable law, which requires that Purchaser
pay the consideration offered or return the Shares deposited by or on behalf
of shareholders promptly after the termination or withdrawal of the Offer.

   Any extension, termination or amendment of the Offer will be followed as
promptly as practicable by a public announcement thereof. Without limiting the
manner in which Purchaser may choose to make any public announcement,
Purchaser will have no obligation (except as otherwise required by applicable
law) to publish, advertise or otherwise communicate any such public
announcement other than by making a release to the Dow Jones News Service. In
the case of an extension of the Offer, Purchaser will make a public
announcement of such extension no later than 9:00 a.m., New York City time, on
the next business day after the previously scheduled Expiration Date.

17. Certain Conditions of the Offer.

   Notwithstanding any other provision of the Offer, Parent and Purchaser will
not be required to accept for payment of or pay for any Shares tendered
pursuant to the Offer and may, subject to the terms of the Merger Agreement,
terminate the Offer, because:

     (1) the Minimum Condition has not been satisfied or waived pursuant to
  the Merger Agreement by the scheduled expiration date;

     (2) any applicable waiting period under the HSR Act has not expired or
  been terminated before the expiration of the Offer;

     (3) there shall have occurred, and continued to exist, (i) a declaration
  of a general banking moratorium or any general suspension of payments in
  respect of banks in the United States, (ii) a commencement of war, armed
  hostilities or other national or international crisis directly or
  indirectly involving the United States, (iii) any limitation by any
  Governmental Entity on, or any other event which materially and adversely
  affects, the extension of credit by banks or other lending institutions in
  the United States, or (iv) in the case of any of the foregoing clauses (i)
  through (iii) existing at the time of the commencement of the Offer, a
  material acceleration or worsening thereof (but in each case, other than
  any occurrence, acceleration or worsening which does not (A) have a
  Material Adverse Effect on the Company or (B) have a Material Adverse
  Effect on the ability of Purchaser to acquire the Shares);

     (4) at any time on or after the date of the Merger Agreement, and before
  the expiration of the Offer, any of the following conditions exist:

       (a) the Company has breached, or failed to comply with, any of its
    obligations under the Merger Agreement where such breach or failure to
    comply would have a Material Adverse Effect on the Company; or

        (b) any representation or warranty of the Company in the Merger
    Agreement that is qualified as to materiality was incorrect when made
    or has since ceased to be true and correct or any representation or
    warranty that is not so qualified was incorrect in any material respect
    when made or has since ceased to be true and correct in all material
    respects (in each case, except for such representations and warranties
    made as of a specific date, which must be true and correct as of such
    date); and

       (c) which breach in either clause (a) or (b) has not been cured
    before the earlier of (A) fifteen days following notice of such breach
    and (B) two business days before the date on which the Offer expires;


                                      29
<PAGE>

     (5) there has been any Action (as defined in the Merger Agreement)
  commenced by or before any federal, state or local court or Government
  Entity (as defined in the Merger Agreement) or other regulatory body, or
  threatened by any court or federal, state or local Government Entity, that
  has a reasonable likelihood of success and that, if decided adversely to
  the Company, would reasonably be expected to have a Material Adverse Effect
  on the Company or, if decided adversely to Parent, would have the effect
  of:

       (a) making the purchase of, or payment for, some or all of the
    Shares pursuant to the Offer or the Merger or otherwise, illegal, or
    resulting in a material delay in the ability of Parent or Purchaser to
    accept for payment or pay for some or all of the Shares,

       (b) seeking to prohibit Parent's or Purchaser's ownership or
    operation of all or any material portion of the Company's business or
    assets, or to compel Parent or Purchaser to dispose of or hold
    separately all or any material portion of the Company's or Parent's
    business or assets,

       (c) otherwise preventing consummation of the Offer or the Merger,

       (d) imposing limitations on the ability of Parent or Purchaser
    effectively (A) to acquire, hold or operate the business of the Company
    taken as a whole or (B) to exercise full rights of ownership of the
    Shares acquired by it, including, but not limited to, the right to vote
    the Shares purchased by it on all matters properly presented to the
    shareholders of the Company, which, in either case, would effect a
    material diminution in the value of the Company or the Shares or
    Parent's or Purchaser's control of the Company;

     (6) the Agreement has been terminated in accordance with its terms, or
  Parent or Purchaser has reached an agreement or understanding in writing
  with the Company providing for termination or amendment of the Offer;

     (7) any Person or Group, other than Parent, Purchaser or any of their
  affiliates, has (i) become the beneficial owner of 50% or more of the
  outstanding Shares or (ii) entered into a definitive agreement or an
  agreement in principle with the Company with respect to an Acquisition
  Proposal; or

     (8) the Company's Board has publicly (including by amendment of its
  Schedule 14D-9) withdrawn or adversely modified its recommendation of
  acceptance of the Offer or has resolved to do so or publicly stated its
  intention to do so.

   Except as expressly set forth in the Merger Agreement, the foregoing
conditions are for the sole benefit of Parent and Purchaser and may be
asserted by Parent or Purchaser regardless of the circumstances giving rise to
any such condition and, subject to the terms of the Merger Agreement, may be
waived by Parent or Purchaser in whole or in part, at any time and from time
to time, in the sole discretion of Parent or Purchaser.

18. Certain Legal Matters; Regulatory Approvals.

   General. Purchaser is not aware of any material pending legal proceeding
relating to the Offer. Based on its examination of publicly available
information filed by the Company with the Commission and other publicly
available information concerning the Company, Purchaser is not aware of any
governmental license or regulatory permit that appears to be material to the
Company's business that might be adversely affected by Purchaser's acquisition
of Shares as contemplated herein or, except as set forth below, of any
approval or other action by any government or governmental administrative or
regulatory authority or agency, domestic or foreign, that would be required
for the acquisition or ownership of Shares by Purchaser or Parent as
contemplated herein. Should any such approval or other action be required,
Purchaser currently contemplates that, except as described below under "State
Takeover Statutes", such approval or other action will be sought. 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 if such
approvals were not obtained or such other actions were not taken, adverse
consequences might not result to the Company's business, or certain parts of
the Company's business might not have to be disposed of, any of which could
cause Purchaser to elect to terminate the Offer without the purchase of Shares
thereunder under certain conditions. See Section 17--"Certain Conditions of
the Offer."


                                      30
<PAGE>

   State Takeover Statutes. A number of states have adopted laws which
purport, to varying degrees, to apply to attempts to acquire corporations that
are incorporated in, or which have substantial assets, shareholders, principal
executive offices or principal places of business or whose business operations
otherwise have substantial economic effects in, such states. The Company,
directly or through subsidiaries, conducts business in a number of states
throughout the United States, some of which have enacted such laws. Except as
described herein, Purchaser does not know whether any of these laws will, by
their terms, apply to the Offer or the Merger or any other business
combination between Purchaser or any of its affiliates and the Company, and
has not complied with any such laws. To the extent that certain provisions of
these laws purport to apply to the Offer or the Merger or other business
combination, Purchaser believes that there are reasonable bases for contesting
such laws.

   In 1982, in Edgar v. MITE Corp., the Supreme Court of the United States
invalidated on constitutional grounds the Illinois Business Takeover Statute
which, as a matter of state securities law, made takeovers of corporations
meeting certain requirements more difficult. However, in 1987 in CTS Corp. v.
Dynamics Corp. of America, the Supreme Court held that the State of Indiana
could, as a matter of corporate law, constitutionally disqualify a potential
acquiror from voting shares of a target corporation without the prior approval
of the remaining shareholders where, among other things, the corporation is
incorporated in, and has a substantial number of shareholders in, the state.
Subsequently, in TLX Acquisition Corp. v. Telex Corp., a Federal District
Court in Oklahoma ruled that the Oklahoma statutes were unconstitutional
insofar as they apply to corporations incorporated outside Oklahoma in that
they would subject such corporations to inconsistent Regulations. Similarly,
in Tyson Foods, Inc. v. McReynolds, a Federal District Court in Tennessee
ruled that four Tennessee takeover statutes were unconstitutional as applied
to corporations incorporated outside Tennessee. This decision was affirmed by
the United States Court of Appeals for the Sixth Circuit.

   If any government official or third party should seek to apply any state
takeover law to the Offer or the Merger or other business combination between
Purchaser or any of its affiliates and the Company, Purchaser will take such
action as then appears desirable, which action may include challenging the
applicability or validity of such statute in appropriate court proceedings. In
the event it is asserted that one or more state takeover statutes is
applicable to the Offer or the Merger and an appropriate court does not
determine that it is inapplicable or invalid as applied to the Offer or the
Merger, Purchaser might be required to file certain information with, or to
receive approvals from, the relevant state authorities or holders of Shares,
and Purchaser might be unable to accept for payment or pay for Shares tendered
pursuant to the Offer, or be delayed in continuing or consummating the Offer
or the Merger. In such case, Purchaser may not be obligated to accept for
payment or pay for any tendered Shares. See Section 16--"Extension of Tender
Period; Termination; Amendment" and Section 17--"Certain Conditions of the
Offer."

   Antitrust in the United States. Under the HSR Act and the rules that have
been promulgated thereunder by the Federal Trade Commission (the "FTC"),
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 FTC and certain waiting period
requirements have been satisfied. The purchase of Shares pursuant to the Offer
is subject to such requirements.

   Pursuant to the requirements of the HSR Act, Purchaser expects to file a
Notification and Report Form with respect to the Offer and Merger with the
Antitrust Division and the FTC on or about January 28, 2000. As a result, the
waiting period applicable to the purchase of Shares pursuant to the Offer is
scheduled to expire at 11:59 p.m., New York City time, 15 days after such
filing. However, prior to such time, the Antitrust Division or the FTC may
extend the waiting period by requesting additional information or documentary
material relevant to the Offer from Purchaser. If such a request is made, the
waiting period will be extended until 11:59 p.m., New York City time, on the
tenth day after substantial compliance by Purchaser with such request.
Thereafter, such waiting period can be extended only by court order.


                                      31
<PAGE>

   A request is being made pursuant to the HSR Act for early termination of
the waiting period applicable to the Offer. There can be no assurance,
however, that the applicable 15-day HSR Act waiting period will be terminated
early. Shares will not be accepted for payment or paid for pursuant to the
Offer until the expiration or early termination of the applicable waiting
period under the HSR Act. See Section 17--"Certain Conditions of the Offer."
Any extension of the waiting period will not give rise to any withdrawal
rights not otherwise provided for by applicable law. See Section 4--
"Withdrawal Rights." If Purchaser's acquisition of Shares is delayed pursuant
to a request by the Antitrust Division or the FTC for additional information
or documentary material pursuant to the HSR Act, the Offer will be extended in
certain circumstances. See Section 16--"Extension of Tender Period;
Termination; Amendment" and Section 17--"Certain Conditions of the Offer."

   The Antitrust Division and the FTC scrutinize the legality under the
antitrust laws of transactions such as the acquisition of Shares by Purchaser
pursuant to the Offer. At any time before or after the consummation of any
such transactions, the Antitrust Division or the FTC could take such action
under the antitrust laws of the United States as it deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer or seeking divestiture of the Shares so acquired
or divestiture of substantial assets of Parent or the Company. Private parties
(including individual States) may also bring legal actions under the antitrust
laws of the United States. Purchaser does not believe that the consummation of
the Offer will result in a violation of any applicable antitrust laws.
However, there can be no assurance that a challenge to the Offer on antitrust
Grounds will not be made, or if such a challenge is made, what the result will
be. See Section 17--"Certain Conditions of the Offer", including conditions
with respect to litigation and certain governmental actions and Section 12--
"The Merger Agreement; Other Arrangements" for certain termination rights.

19. Appraisal Rights.

   If the Merger is consummated, shareholders of the Company may have the
right to dissent and demand appraisal of their Shares under the DGCL. See
Section 13--"Purpose of the Offer; Plans for the Company." Under Delaware Law,
dissenting shareholders who comply with the applicable statutory procedures
will be entitled to receive a judicial determination of the fair value of
their Shares (exclusive of any element of value arising from the
accomplishment or expectation of the Merger) and to receive payment of such
fair value in cash, together with a fair rate of interest, if any. Any such
judicial determination of the fair value of the Shares could be based upon
considerations other than or in addition to the Offer Price, the consideration
per Share to be paid in the Merger and the market value of the Shares,
including asset values and the investment value of the Shares. Shareholders
should recognize that the value so determined could be higher or lower than
the price per Share paid pursuant to the Offer or the consideration per Share
to be paid in the Merger.

20. Fees and Expenses.

   Credit Suisse First Boston is acting as the Dealer Manager in connection
with the Offer and as financial advisor to Philip Morris Management Corp., an
affiliate of Parent, in connection with Parent's proposed acquisition of the
Company. Credit Suisse First Boston will receive reasonable and customary
compensation for its services relating to the Offer and will be reimbursed for
certain out-of-pocket expenses. Parent and Purchaser have agreed to indemnify
Credit Suisse First Boston and certain related persons against certain
liabilities and expenses in connection with its engagement, including certain
liabilities under the federal securities laws.

   Parent and Purchaser have retained D.F. King & Co., Inc. to be the
Information Agent and American Stock Transfer & Trust Company to be the
Depositary in connection with the Offer. The Information Agent may contact
holders of Shares by mail, telephone, telecopy, telegraph and personal
interview and may request banks, brokers, dealers and other nominees to
forward materials relating to the Offer to beneficial owners of Shares.

   The Information Agent and the Depositary each will receive reasonable and
customary compensation for their respective services in connection with the
Offer, will be reimbursed for reasonable out-of-pocket expenses, and will be
indemnified against certain liabilities and expenses in connection therewith,
including certain liabilities under federal securities laws.

                                      32
<PAGE>

   None of Parent or Purchaser will pay any fees or commissions to any broker
or dealer or to any other person (other than to the Dealer Manager, the
Depositary and the Information Agent) in connection with the solicitation of
tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks
and trust companies will, upon request, be reimbursed by the Purchaser for
customary mailing and handling expenses incurred by them in forwarding
offering materials to their customers.

21. Miscellaneous.

   The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of
such jurisdiction. However, Purchaser may, in its discretion, take such action
as it may deem necessary to make the Offer in any such jurisdiction and extend
the Offer to holders of Shares in such jurisdiction.

   NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR 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.

   Purchaser has filed with the Commission a Tender Offer Statement on
Schedule TO pursuant to Rule 14d-3 of the General Rules and Regulations under
the Exchange Act, together with exhibits furnishing certain additional
information with respect to the Offer, and may file amendments thereto. In
addition, the Company has filed with the Commission a
Solicitation/Recommendation Statement on Schedule 14D-9, together with
exhibits, pursuant to Rule 14d-9 under the Exchange Act, setting forth the
recommendations of the Company Board with respect to the Offer and the reasons
for such recommendations and furnishing certain additional related
information. A copy of such documents, and any amendments thereto, may be
examined at, and copies may be obtained from, the Commission (but not the
regional offices of the Commission) in the manner set forth under Section 7--
"Certain Information Concerning the Company" above.

                                          BB Acquisition, Inc.

January 28, 2000

                                      33
<PAGE>

                                                                      SCHEDULE I

                      DIRECTORS AND EXECUTIVE OFFICERS OF
                            PARENT AND THE PURCHASER

1. Directors and Executive Officers of Parent.

   The name, business address, business phone number, present principal
occupation or employment and five-year employment history of each of the
directors and executive officers of Parent are set forth below. All directors
and executive officers listed below are citizens of the United States.

<TABLE>
<CAPTION>
                                      Present Principal Occupation or
 Name, Age and Business                Employment; Material Positions
        Address                       Held During the Past Five Years
 ----------------------               -------------------------------
<S>                      <C>
Robert A. Eckert........ Director, President & Chief Executive Officer (10/23/97
 Kraft Foods, Inc.        to present); Group Vice President, Kraft Foods North
 Three Lakes Drive        America (7/29/96 to 10/22/97); President, Oscar Mayer
 Northfield, IL 60093     (8/23/93 to 7/28/96).

Betsy D. Holden......... Executive Vice President Kraft Foods North America;
 Kraft Foods, Inc.        (12/14/98 to present); Executive Vice President Kraft
 One Kraft Court          Cheese (11/17/97 to 12/13/98); Executive Vice President
 Glenview, IL 60025       & General Manager Kraft Cheese (7/10/95 to 11/16/97);
                          President Pizza (1/1/95 to 7/9/95); President
                          Tombstone/Jack's Pizza (1/1/94 to 12/31/94).

Calvin J. Collier....... Director, Senior Vice President, General
 Kraft Foods, Inc.        Counsel/Corporate Affairs & Secretary (1/1/95 to
 Three Lakes Drive        present).
 Northfield, IL 60093

Roger K. Deromedi....... Director; President & Chief Executive Officer Kraft Foods
 Kraft Foods Inc.         International (4/99 to Present); Group Vice President
 800 Westchester Avenue   Kraft Foods International & President Asia Pacific
 Rye Brook, NY 10573      (12/98 to 4/99); President Western Europe (12/95 to
                          1/98); Executive Vice President & Area Director
                          France/Iberia/Benelux (1/95 to 12/95).

Edward J. Moy........... Director; Senior Vice President & General Counsel Kraft
                          Foods International (12/99 to Present); Senior Vice
                          President, General Counsel & Corporate Affairs Kraft
                          Foods International (7/98 to 12/99); Senior Vice
                          President & General Counsel Kraft Foods International
                          (8/95 to 4/98); Vice President, Chief Legal Counsel
                          (5/89 to 8/95).

James P. Dollive........ Senior Vice President Finance & Information Systems
 Kraft Foods, Inc.        (8/1/98 to present); Vice President Finance & Strategy
 Three Lakes Drive        (5/1/97 to 7/31/98); Senior Vice President Strategy,
 Northfield, IL 60093     Kraft Food North America (7/29/96 to 4/30/97); Vice
                          President Financial Planning & Analysis (1/1/95 to
                          7/28/96); Vice President Finance/Systems (3/6/94 to
                          1/1/95).

Terry M. Faulk.......... Senior Vice President, Human Resources (1/1/95 to
 Kraft Foods, Inc         present; 2/14/94 to 1/1/95).
 Three Lakes Drive
 Northfield, IL 60093

Lance A. Friedmann...... Senior Vice President, Marketing Services (9/1/99 to
 Kraft Foods, Inc.        present); Vice President Marketing/Strategy &
 Three Lakes Drive        Development (5/27/97 to 8/31/99); Vice President
 Northfield, IL 60093     Marketing Information Services (4/1/96 to 5/26/97);
                          Business Director--Dinners (1/1/95 to 3/31/96).
</TABLE>


                                       34
<PAGE>

<TABLE>
<CAPTION>
                                      Present Principal Occupation or
 Name, Age and Business                Employment; Material Positions
        Address                       Held During the Past Five Years
 ----------------------               -------------------------------
<S>                      <C>
Lawrence J. Gundrum..... Senior Vice President, Operations (6/17/96 to present);
 Kraft Foods, Inc.        Senior Vice President, Logistics (3/13/95 to 6/16/96);
 Three Lakes Drive        Executive Vice President/General Manager Customer
 Northfield, IL 60093     Service (6/20/94 to 3/12/95).

Alene M. Korby.......... Senior Vice President, Procurement (9/1/99 to present);
 Kraft Foods, Inc.        Vice President Purchasing (2/23/98 to 8/31/99); Vice
 Three Lakes Drive        President Operations--Dinners (3/25/96 to 2/22/98); Vice
 Northfield, IL 60093     President Manufacturing/Food Service Co-Packing (10/9/95
                          to 3/24/96); Director Food Service Co-Packing (1/16/95
                          to 10/8/95).

David G. Owens.......... Senior Vice President Strategy Kraft Foods North America
 Kraft Foods, Inc.        (8/1/97 to present); Vice President Business Planning
 Three Lakes Drive        (1/1/97 to 7/31/97); Founder, President (Owens Strategy
 Northfield, IL 60093     Group, Inc.) (7/1/85 to 12/31/96).

Phillip F. Pellegrino... Senior Vice President Sales & Customer Service (2/13/95
 Kraft Foods, Inc.        to present); Executive Vice President Catalog Sales
 Three Lakes Drive        Management; (5/16/94 to 2/12/95); Vice President KUSA
 Northfield, IL 60093     Field Sales (1/1/94 to 5/15/94).

John Ruff............... Senior Vice President, R&D and Quality (12/26/99 to
 Kraft Foods, Inc.        present); Senior Vice President, Kraft Food North
 Three Lakes Drive        America Technology (10/7/96 to 12/27/97); Senior Vice
 Northfield, IL 60093     President Food International Technology & Scientific
                          Research (8/31/95 to 10/6/96).

Todd C. Brown........... Executive Vice President & President Kraft Food Services
 Kraft Foods, Inc.        (4/20/98 to present); Executive Vice President & General
 One Kraft Court          Manager Desserts & Snacks (8/26/96 to 4/19/98); Vice
 Glenview, IL 60025       President & General Manager--Pollio Cheese (2/28/94 to
                          8/25/96).

Ann M. Fudge............ Executive Vice President Kraft Foods North America &
 Kraft Foods, Inc.        President Maxwell House and Post (12/28/97 to present);
 555 S. Broadway          Executive Vice President Kraft Foods North America--
 Tarrytown, NY 10591      President Coffee/Cereals (9/9/97 to 12/27/97); Executive
                          Vice President & General Manager (2/21/94 to 9/8/97).

Marla C. Gottschalk..... Executive Vice President & General Manager Post Cereals
 Kraft Foods, Inc.        (effective 1/30/00); Vice President Advertising Strategy
 One Kraft Court          (2/28/99 to 1/30/00); Vice President Financial Planning
 Glenview, IL 60025       & Analysis (8/1/97 to 2/7/99); Vice President Finance &
                          Systems (11/18/96 to 2/16/97); Vice President Finance,
                          Sales/Customer Service (1/16/95 to 11/17/96).

Mary Kay Haben.......... Executive Vice President & President Kraft Cheese
 Kraft Foods, Inc.        (12/14/98 to present); Executive Vice President Kraft
 One Kraft Court          Foods (11/17/97 to 12/13/98); Executive Vice President &
 Glenview, IL 60025       General Manager--Enhancers (3/5/97 to 11/16/97);
                          President Pizza (7/10/95 to 3/4/97); Vice President
                          Strategy & Development--Enhancers (1/1/95 to 7/9/95).

Bridgett P. Heller...... Executive Vice President & General Manager Coffee
 Kraft Foods, Inc.        (effective 1/31/00); General Manager Gevalia Kaffe
 800 Westchester          (5/19/97 to 1/31/00); Category Business Director
 Avenue Rye Brook, NY     (8/28/95 to 4/14/96); Category Development Manager
 10573                    (12/26/94 to 8/27/95).
</TABLE>


                                       35
<PAGE>

<TABLE>
<CAPTION>
                                      Present Principal Occupation or
 Name, Age and Business                Employment; Material Positions
        Address                       Held During the Past Five Years
 ----------------------               -------------------------------
<S>                      <C>
David S. Johnson........ Executive Vice President & President Beverages and
 Kraft Foods, Inc.        Desserts (12/14/98 to present); Vice President Category
 One Kraft Court          Sales Management/Strategy (7/29/96 to 3/4/97); Vice
 Glenview, IL 60025       President Strategy (4/1/96 to 7/28/96); Vice President
                          Marketing/Strategy/Development (4/27/92 to 3/31/96).

M. Carl Johnson, III.... Executive Vice President & President New Meals (11/17/97
 Kraft Foods, Inc.        to present); Executive Vice President & General
 One Kraft Court          Manager--Meals (8/23/93 to 11/16/97).
 Glenview, IL 60025

Kevin D. Ponticelli..... Executive Vice President & General Manager Pizza (1/17/00
 Kraft Foods, Inc.        to present); Vice President Category Sales Management &
 One Kraft Court          Strategy (9/22/98 to 1/16/00); Vice President Marketing
 Glenview, IL 60025       & Strategy (4/1/96 to 9/21/98); Vice President Marketing
                          (4/26/93 to 3/31/96).

Irene B. Rosenfeld...... Executive Vice President & President Kraft Canada
 Kraft Canada Inc.        (8/26/96 to present); Executive Vice President & General
 95 Moatfield Drive       Manager--Desserts and Snacks (11/14/94 to 8/25/96).
 Don Mills, ON M3B 3L6
 Canada

Kevin R. Scott.......... Executive Vice President & General Manager Boca (1/17/00
 Kraft Foods, Inc.        to present); Executive Vice President & General Manager
 One Kraft Court          Pizza (12/14/98 to 1/16/00); Vice President Marketing &
 Glenview, IL 60025       Strategy (1/13/97 to 12/13/98); Director Strategy &
                          Development (3/11/96 to 1/12/97); Director Strategy/GM
                          Jacks (5/9/94 to 3/10/96).

Richard G. Searer....... Executive Vice President & President Oscar Mayer and
 Kraft Foods, Inc.        Pizza (12/14/98 to present); Executive Vice President &
 Three Lakes Drive        President Oscar Mayer (7/29/96 to 12/13/98); Executive
 Northfield, IL 60093     Vice President Catalog Sales Management, Strategy &
                          Customer Service (2/13/95 to 7/18/96); Executive Vice
                          President Catalog Sales Management (1/1/95 to 2/13/95).

Paula A. Sneed.......... Executive Vice President & President E-Commerce (9/6/99
 Kraft Foods, Inc.        to present); Chief Marketing Officer (5/17/99 to
 Three Lakes Drive        9/5/99); Senior Vice President Marketing Services
 Northfield, IL 60093     (1/1/95 to 5/16/99); Executive Vice President & General
                          Manager D&E (11/14/94 to 12/31/94).
</TABLE>

                                       36
<PAGE>

2. Directors and Executive Officers of Philip Morris Companies Inc.

   The name, business address, present principal occupation or employment of
each of the directors and executive officers of Philip Morris Companies Inc.
are set forth below. All directors and executive officers listed below are
citizens of the United States. All executive officers listed below have been
employed by Philip Morris Companies Inc. in various capacities during the past
five years. The business address of each of the individuals listed below is
Philip Morris Companies Inc., 120 Park Avenue, New York, NY 10017.

<TABLE>
<CAPTION>
 Name, Age and Business                 Present Principal Occupation
        Address                                or Employment
 ----------------------                 ----------------------------
<S>                      <C>
Geoffrey C. Bible....... Chairman of the Board and Chief Executive Officer;
                          Director--Philip Morris International Inc. (1994 to
                          present); Director of The News Corporation Limited, the
                          New York Stock Exchange, Inc., Lincoln Center for the
                          Performing Arts, Inc., and the International Tennis Hall
                          of Fame; Chairman of the Executive, Finance, Affirmative
                          Action and Diversity, Corporate Contributions and
                          Management Committees.

Elizabeth E. Bailey..... Director--Philip Morris International Inc. (1989 to
                          present); John C. Howar Professor of Public Policy &
                          Management, The Wharton School of the University of
                          Pennsylvania, Philadelphia, PA; Director of the College
                          Retirement Equities Fund, CSX Corporation, Honeywell
                          Inc.; Trustee of The Brookings Institution, the National
                          Bureau of Economic Research and Bancroft NeuroHealth;
                          Member of the Audit, Executive, Nominating and Corporate
                          Governance, and Public Affairs and Social Responsibility
                          Committees.

Harold Brown............ Director--Philip Morris International Inc. (1983 to
                          present); Counselor, Center for Strategic and
                          International Studies, Washington, DC; Partner, Warburg
                          Pincus & Co.; Chairman of the Foreign Policy Institute
                          of the School of Advanced International Studies, the
                          Johns Hopkins University; Director of Cummins Engine
                          Company, Inc., Evergreen Holdings, Inc., and Mattel,
                          Inc.; Chairman of the Nominating and Corporate
                          Governance Committee; Member of the Compensation,
                          Corporate Employee Plans Investment, Finance, and Public
                          Affairs and Social Responsibility Committees.

William H. Donaldson.... Director--Philip Morris International Inc. (1979 to
                          present); Co-founder and Senior Advisor, Donaldson,
                          Lufkin & Jenrette, New York, NY, investment banking
                          firm; Director of Aetna Inc., Bright Horizons Family
                          Solutions Inc., Mail.com Inc., NEC Corporation
                          (International Advisory Board), Council for Excellence
                          in Government, Lincoln Center for the Performing Arts,
                          Inc., Foreign Policy Association; Trustee for the Marine
                          Corps University Foundation, Carnegie Endowment for
                          International Peace, and the New York City Police
                          Foundation; Chairman of the Yale School of Management
                          Advisory Board; Chairman of the Corporate Employee Plans
                          Investment Committee; Member of the Audit, Executive,
                          Finance, and Nominating and Corporate Governance
                          Committees.

Jane Evans.............. Director--Philip Morris International Inc. (1981 to
                          present); President and Chief Executive Officer,
                          SmartTV, Burbank, CA, portable interactivity and
                          electronic commerce; Director of Georgia-Pacific
                          Corporation, Kaufman and Broad Home Corporation, Main
                          St., and Main, and Pets Mart, Inc.; Board of Trustees,
                          Vanderbilt University; Chair of the Committee on Public
                          Affairs and Social Responsibility; Member of the
                          Corporate Employee Plans Investment, Affirmative Action
                          and Diversity and Nominating and Corporate Governance
                          Committees.
</TABLE>


                                      37
<PAGE>

<TABLE>
<CAPTION>
 Name, Age and Business                 Present Principal Occupation
        Address                                or Employment
 ----------------------                 ----------------------------
<S>                      <C>
J. Dudley Fishburn...... Director--Philip Morris International Inc. (1999 to
                          present); Director of Household International
                          Corporation and Chairman of its British subsidiary, HFC
                          Bank; Treasurer of Britain's largest charity, the
                          National Trust; Associate Editor of The Economist,
                          United Kingdom; Director of Euclidian plc, Cordiant plc,
                          and a fund, backed by the World Bank, that makes
                          investments in Russia; Chairman of the trustees of the
                          Open University in the United Kingdom; Trustee of the
                          Prison Reform Trust, the Liver Research Trust, and the
                          Notting Hall Housing Association; Member of the Finance
                          and Public Affairs and Social Responsibility Committees.

Robert E. R. Huntley.... Director--Philip Morris International Inc. (1976 to
                          present); Chairman of the Audit Committee; Member of the
                          Compensation, Finance, and Public Affairs and Social
                          Responsibility Committee.

Rupert Murdoch.......... Director--Philip Morris International Inc. (1989 to
                          present); Chairman and Chief Executive of the News
                          Corporation Limited, New York, NY, publishing, motion
                          pictures and television; The News Corporation Limited
                          (the interests of which include Fox Entertainment Group,
                          Inc., Twentieth Century Fox Film Corporation and Fox
                          Broadcasting Company in the United States and The Times
                          and Sunday Times in the United Kingdom); A director of
                          Fox Entertainment Group, Inc. and British Sky
                          Broadcasting Group pic.; Member of the Executive
                          Committee.

John D. Nichols......... Director--Philip Morris International Inc. (1992 to
                          present); Director of Grand Eagle Companies Inc.,
                          Household International Corporation, Rockwell
                          International Corporation, and Junior Achievement of
                          Chicago; Trustee of the Chicago Community Trust, the
                          Lyric Opera of Chicago, the Museum of Science and
                          Industry, and the Chicago Symphony Orchestra; Member of
                          the Board of Overseers for Harvard University; Chairman
                          of the Art Institute of Chicago; Member of the Corporate
                          Employee Plans Investment, Finance, Nominating and
                          Corporate Governance, and Public Affairs and Social
                          Responsibility Committees.

Lucio A. Noto........... Director--Philip Morris International Inc. (1998 to
                          present); Chairman and Chief Executive Officer of Mobil
                          Corporation, Fairfax, VA.; Member of the Audit and
                          Finance Committees.

Richard D. Parsons...... Director--Philip Morris International Inc. (1990 to
                          present); President, Time Warner, Inc., New York, NY,
                          media and entertainment.

John S. Reed............ Director--Philip Morris International Inc. (1975 to
                          present); Chairman and CO-CEO Citigroup Inc., New York,
                          NY; Mr. Reed is a Co-Chairman of Citigroup Inc., which
                          controls Solomon Smith Barney, the investment bank that
                          represented the Company in the auction process leading
                          to this transaction. Citigroup may have certain accounts
                          which contain Shares, however, Mr. Reed disclaims
                          beneficial ownership of such Shares.
</TABLE>


                                       38
<PAGE>

<TABLE>
<CAPTION>
 Name, Age and Business                 Present Principal Occupation
        Address                                or Employment
 ----------------------                 ----------------------------
<S>                      <C>
Carlos Slim Helu........ Director--Philip Morris International Inc. (1997 to
                          present); Chairman Emeritus of Grupo Carso, S.A. de
                          C.V.; Chairman of the Board Telefonce de Mexico, S.A. de
                          C.V., Mexico; Member of the Corporate Employment Plans
                          Investment and Finance Committees.

Stephen M. Wolf......... Director--Philip Morris International Inc. (1993 to
                          present); Chairman of US Airways Group, Inc., and US
                          Airways, Inc., Arlington, VA; Member of the Audit,
                          Compensation, Nominating & Corporate Governance and
                          Public Affairs & Social Responsibility Committees.

Billie Jean King........ Director--Philip Morris International Inc. (8/25/99 to
                          present); Board of the Elton John AIDS Foundation and
                          the National Aids Fund; Member of the International
                          Tennis Hall of Fame and the National Women's Hall of
                          Fame; Member of the Public Affairs & Social
                          Responsibility Committee.

Murray H. Bring......... Vice Chairman, External Affairs & General Counsel;
                          Director--Philip Morris International Inc. (1988 to
                          present); Senior Vice President and General Counsel in
                          July 1988, Executive Vice President, External Affairs,
                          and General Counsel in December 1994; A director of the
                          Whitney Museum of American Art, the New York University
                          Law Center Foundation, the William J. Brennan Center for
                          Justice and The New York City Opera; A member of the
                          Committee on Public Affairs and Social Responsibility.

Bruce S. Brown.......... Vice President, Taxes.

Louis C. Camilleri...... Senior Vice President and Chief Financial Officer.

Nancy J. De Lisi........ Vice President Finance and Treasurer.

Roger K. Deromedi....... President and Chief Executive officer of Kraft Foods
                          International, Inc.

Robert A. Eckert........ President and Chief Executive Officer of Kraft Foods,
                          Inc.

Paul W. Hendrys......... President and Chief Executive Officer of Philip Morris
                          International Inc.

G. Penn Holsenbeck...... Vice President, Associate General Counsel and Corporate
                          Secretary.

John D. Bowlin.......... Chairman and Chief Executive Officer of Miller Brewing
                          Company.

Steven C. Parrish....... Senior Vice President, Corporate Affairs.

Timothy A. Sompolski.... Senior Vice President, Human Resources and
                          Administration.

Michael E. Szymanczyk... President and Chief Executive Officer of Philip Morris
                          Incorporated.

Joseph A. Tiesi......... Vice President and Controller.

William H. Webb......... Chief Operating Officer.

Charles R. Wall......... General Counsel and Senior Vice President (effective
                          2/1/00).
</TABLE>

                                       39
<PAGE>

   Manually signed facsimile copies of the Letter of Transmittal, properly
completed and duly executed, 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 such shareholder's 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:

                            AMERICAN STOCK TRANSFER
                                & TRUST COMPANY

         By mail:           By Overnight Courier:             By Hand:



      40 Wall Street            40 Wall Street             40 Wall Street
        46th Floor                46th Floor                 46th Floor
    New York, NY 10005        New York, NY 10005         New York, NY 10005
                             Attn: Reorganization
                                  Department

     By Facsimile Transmission for         For Confirmation by Telephone:

       Eligible Institutions and
             Confirmation:                         (212) 936-5100

            (718) 234-5001

   Questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager, at the addresses and telephone numbers set forth
below. Additional copies of this Offer to Purchase, the Letter of Transmittal,
the Notice of Guaranteed Delivery and related materials may be obtained from
the Information Agent or the Dealer Manager as set forth below, and will be
furnished promptly at Purchaser's expense. Shareholders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.

                    The Information Agent for the Offer is:

                            D. F. King & Co., Inc.

                          77 Water Street, 20th Floor
                              New York, NY 10005
                Banks and Brokers call collect: (212) 269-5550
                   All others call Toll Free: (800) 628-8510

                     The Dealer Manager for the Offer is:

                    Credit Suisse First Boston Corporation
                             Eleven Madison Avenue
                            New York, NY 10010-3629
                        Call Toll Free: (800) 646-4543
