Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights to Purchase Preferred Stock)
of
The Earthgrains Company
by
SLC Acquisition Corp.
a wholly owned subsidiary of
Sara Lee Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON TUESDAY, JULY 31, 2001, UNLESS THE OFFER IS EXTENDED.
July 3, 2001
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been engaged by SLC Acquisition Corp., a Delaware corporation (the
"Purchaser") and a wholly owned subsidiary of Sara Lee Corporation, a Maryland
corporation ("Sara Lee"), to act as Dealer Manager in connection with the
Purchaser's offer to purchase all outstanding shares of common stock, par
value $0.01 per share, including the associated rights to purchase preferred
stock (collectively, the "Shares"), of The Earthgrains Company, a Delaware
corporation (the "Company"), at a purchase price of $40.25 per Share, net to
the seller in cash, without interest thereon, upon the terms and subject to
the conditions set forth in the Offer to Purchase dated July 3, 2001 (the
"Offer to Purchase") and the related Letter of Transmittal (which, together
with any amendments or supplements thereto, collectively constitute the
"Offer") enclosed herewith.
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the expiration date of the Offer a number
of Shares that represents at least a majority of the issued and outstanding
Shares on a fully diluted basis, and (2) the waiting periods under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended, the European
Community Merger Regulation, as amended, and any other comparable provisions
under any pre-merger notification laws or regulations of foreign jurisdictions
shall have expired or been terminated. See Section 15 of the Offer to
Purchase.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares registered in your name or in the name of
your nominee.
1. Offer to Purchase dated July 3, 2001;
2. Letter of Transmittal for your use in accepting the Offer and tendering
Shares and for the information of your clients (manually signed facsimile
copies of the Letter of Transmittal may be used to tender Shares);
3. Notice of Guaranteed Delivery to be used to accept the Offer if share
certificates are not immediately available or if such certificates and all
other required documents cannot be delivered to Mellon Investor Services
LLC (the "Depositary"), or if the procedures for book-entry transfer cannot
be completed on a timely basis;
4. A printed form of letter that may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Offer;
5. The letter to stockholders of the Company from Barry H. Beracha,
Chairman of the Board of Directors and Chief Executive Officer of the
Company, accompanied by the Company's Solicitation/ Recommendation
Statement on Schedule 14D-9 filed with the Securities and Exchange
Commission by the Company; and
6. Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9.
The Board of Directors of the Company unanimously (i) determined that the
terms of the Offer and the Merger are fair to and in the best interests of the
stockholders of the Company, (ii) approved the Merger Agreement (as defined
below) and the transactions contemplated thereby, including the Offer and the
Merger (as defined below), and (iii) recommends that the Company's
stockholders accept the Offer and tender their Shares pursuant to the Offer
and approve and adopt the Merger Agreement.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of June 29, 2001 (the "Merger Agreement"), by and among Sara Lee, the
Purchaser and the Company. The Merger Agreement provides for, among other
things, the making of the Offer by the Purchaser, and further provides that
the Purchaser will be merged with and into the Company (the "Merger")
following the satisfaction or waiver of the conditions to the Merger set forth
in the Merger Agreement. Following the Merger, the Company will continue as
the surviving corporation, wholly owned by Sara Lee, and the separate
corporate existence of the Purchaser will cease.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal and any required signature guarantees, or an
Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry delivery of Shares, and other required documents should be sent to
the Depositary and (ii) certificates representing the tendered Shares should
be delivered to the Depositary, or such Shares should be tendered by book-
entry transfer into the Depositary's account maintained at the Book-Entry
Transfer Facility (as described in the Offer to Purchase), all in accordance
with the instructions set forth in the Letter of Transmittal and the Offer to
Purchase.
Holders of Shares whose certificates for such Shares (the "Share
Certificates") are not immediately available, who cannot complete the
procedures for book-entry transfer on a timely basis, or who cannot deliver
all other required documents to the Depositary prior to the Expiration Date
(as defined in the Offer to Purchase) must tender their Shares according to
the guaranteed delivery procedures set forth in Section 3 of the Offer to
Purchase.
The Purchaser will not pay any fees or commissions to any broker or dealer
or other person (other than the Depositary, the Information Agent, and the
Dealer Manager as described in the Offer to Purchase) for soliciting tenders
of Shares pursuant to the Offer. The Purchaser will, however, upon request,
reimburse you for customary mailing and handling costs incurred by you in
forwarding the enclosed materials to your clients. The Purchaser will pay or
cause to be paid all stock transfer taxes applicable to its purchase of Shares
pursuant to the Offer, except as otherwise provided in Instruction 6 of the
Letter of Transmittal.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, JULY 31, 2001, UNLESS THE OFFER IS EXTENDED.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed materials may be obtained from, the
Information Agent or the undersigned at the addresses and telephone numbers
set forth on the back cover of the Offer to Purchase.
Very truly yours,
J.P. Morgan Securities Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS AN AGENT OF PARENT, THE PURCHASER, THE COMPANY, THE
DEALER MANAGER, THE INFORMATION AGENT, THE DEPOSITARY OR ANY AFFILIATE OF ANY
OF THE FOREGOING OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR
MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER
THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.