WOLOHAN LUMBER CO, SC TO-I, EX-99.(A)(1)(A), 2000-11-09

WOLOHAN LUMBER CO
SC TO-I, EX-99.(A)(1)(A), 2000-11-09
LUMBER & OTHER BUILDING MATERIALS DEALERS

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EXHIBIT (a)(1)(A)

OFFER TO PURCHASE FOR CASH

WOLOHAN LUMBER CO.
UP TO 1,500,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
AT A PURCHASE PRICE NOT GREATER THAN $12.00
NOR LESS THAN $10.00 PER SHARE

THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
EASTERN TIME, ON FRIDAY, DECEMBER 15, 2000, UNLESS THE OFFER IS EXTENDED.

Wolohan Lumber Co., a Michigan corporation, invites its shareholders to
tender up to 1,500,000 shares of its common stock, $1.00 par value per share,
for purchase by it at a price not greater than $12.00 nor less than $10.00 per
share, net to the seller in cash, without interest. We will select the lowest
purchase price that will allow us to buy 1,500,000 shares or, if a lesser number
of shares are properly tendered, all shares that are properly tendered and not
properly withdrawn. All shares acquired in the offer will be acquired at the
same purchase price.

Only shares properly tendered at prices at or below the purchase price
selected by us, and not properly withdrawn, will be purchased. However, because
of the "odd lot" priority, proration and conditional tender provisions described
in this Offer to Purchase, all of the shares tendered at or below the purchase
price selected by us may not be purchased if more than the number of shares we
seek are properly tendered. Shares not purchased in the offer will be returned
as promptly as practicable following the Expiration Date. See Section 3.

We reserve the right, in our sole discretion, to purchase more than
1,500,000 shares pursuant to the offer. See Section 1.

THIS OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THIS OFFER, HOWEVER, IS SUBJECT TO OTHER CONDITIONS. SEE SECTION 7.

The shares of common stock are listed and traded on The Nasdaq Stock Market
under the symbol "WLHN". On November 8, 2000, the last full trading day before
announcement of the offer, the last reported sale price of the shares on The
Nasdaq Stock Market was $8.141. Shareholders are urged to obtain current market
quotations for the shares. See Section 8.

OUR BOARD OF DIRECTORS HAS APPROVED THIS OFFER. HOWEVER, NEITHER WE NOR OUR
BOARD OF DIRECTORS NOR THE DEALER MANAGER MAKES ANY RECOMMENDATION TO YOU AS TO
WHETHER TO TENDER OR REFRAIN FROM TENDERING YOUR SHARES OR AS TO THE PURCHASE
PRICE AT WHICH YOU MAY CHOOSE TO TENDER YOUR SHARES. YOU MUST MAKE YOUR OWN
DECISION AS TO WHETHER TO TENDER YOUR SHARES AND, IF SO, HOW MANY SHARES TO
TENDER AND THE PRICE OR PRICES AT WHICH YOU WILL TENDER THEM.
------------------------

The Dealer Manager for the Offer is:
U.S. BANCORP PIPER JAFFRAY INC.

Purchase Offer dated November 9, 2000
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IMPORTANT

If you wish to tender all or any part of the shares registered in your
name, you must do one of the following before the offer expires:

- Follow the instructions described in Section 3 carefully, including
completing a Letter of Transmittal in accordance with the instructions
and delivering it, along with your share certificates and any other
required items, to Registrar and Transfer Company, the Depositary; and

- If your shares are registered in the name of a broker, dealer, commercial
bank, trust company or other nominee, contact the nominee if you desire
to tender your shares and request that the nominee tender them for you.

Any shareholder who desires to tender shares and whose certificates for the
shares are not immediately available or cannot be delivered to the Depositary or
who cannot comply with the procedure for book-entry transfer or whose other
required documents cannot be delivered to the Depositary prior to expiration of
the offer must tender the shares pursuant to the guaranteed delivery procedure
set forth in Section 3.

TO PROPERLY TENDER SHARES, YOU MUST VALIDLY COMPLETE THE LETTER OF
TRANSMITTAL, INCLUDING THE SECTION RELATING TO THE PRICE AT WHICH YOU ARE
TENDERING SHARES.

If you wish to maximize the chance that your shares will be purchased at
the purchase price determined by us, you should check the box in the section on
the Letter of Transmittal captioned "Shares Tendered at a Price Determined
Pursuant to the Offer." Note that this election could result in your shares
being purchased at the minimum price of $10.00 per share.

If you have questions, need assistance or require additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery, you should contact MacKenzie Partners, Inc., the Information Agent, or
U.S. Bancorp Piper Jaffray Inc., the Dealer Manager for the offer, at their
respective addresses and telephone numbers set forth on the back cover of this
Offer to Purchase.

WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF
AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR SHARES OR AS TO
THE PURCHASE PRICE AT WHICH YOU MAY CHOOSE TO TENDER YOUR SHARES IN THIS OFFER.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO WHICH
WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFER OTHER
THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF
TRANSMITTAL. IF ANYONE MAKES ANY RECOMMENDATION OR GIVES ANY INFORMATION OR
REPRESENTATION, YOU MUST NOT RELY UPON THAT RECOMMENDATION, INFORMATION OR
REPRESENTATION AS HAVING BEEN AUTHORIZED BY US OR THE DEALER MANAGER.
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SUMMARY OF TERMS

We are providing this summary of terms for your convenience. It highlights
material information in this document, but you should realize that it does not
describe all of the details of the offer to the same extent described in this
document. We urge you to read the entire document and the related Letter of
Transmittal because they contain the full details of the offer. Where helpful,
we have included references to the sections of this document where you will find
a more complete discussion.

WHO IS OFFERING TO PURCHASE MY SHARES?

We are Wolohan Lumber Co. We are offering to purchase up to 1,500,000
shares of our common stock and the associated common stock purchase rights. No
separate consideration will be paid for these rights.

WHY IS WOLOHAN OFFERING TO PURCHASE MY SHARES?

Over the past several years, we have divested certain operating assets that
no longer fit with the company's current strategic focus to concentrate on
professional builders and large project-oriented customers. Consistent with this
focus, we have also eliminated or reduced certain products previously sold to
the do-it-yourself home improvement market. The divestiture of these assets has
resulted in an accumulation of cash on the company's balance sheet. We have
determined that this cash is significantly more than will be necessary to fund
our working capital, physical plant, and other needs related to current
operations in the foreseeable future. Moreover, we have analyzed a variety of
other alternatives for utilizing this cash, including potential opportunities
for acquisitions. Our management does not view any of these alternatives to be
in the best interest of enhancing shareholder value at this time and we are
therefore seeking to utilize the cash to deliver value directly to shareholders.
See Section 2. See Section 11 for recent financial information as to Wolohan.

WHAT WILL THE PURCHASE PRICE FOR THE SHARES BE AND WHAT WILL BE THE FORM OF
PAYMENT?

We are conducting the offer through a procedure commonly called a modified
"Dutch Auction." This procedure allows you to select the price within a price
range specified by us at which you are willing to sell your shares. The price
range for this offer is $10.00 to $12.00. We will select the lowest purchase
price that will allow us to buy 1,500,000 shares or, if a lesser number of
shares are properly tendered, all shares that are properly tendered and not
properly withdrawn. All shares we purchase will be purchased at the same price,
even if you have selected a lower price, but we will not purchase any shares
above the purchase price we determine. If you wish to maximize the chance that
your shares will be purchased, you should check the box in the section on the
Letter of Transmittal indicating that you will accept the purchase price we
determine. You should understand that this election could result in your shares
being purchased at the minimum price of $10.00 per share. If your shares are
purchased in the offer, you will be paid the purchase price, in cash, without
interest, as soon as practicable after the expiration of the offer period. Under
no circumstances will we pay interest on the purchase price, even if there is a
delay in making payment. See Section 1.

HOW MANY SHARES WILL WOLOHAN PURCHASE?

We will purchase 1,500,000 shares in the tender offer or such lesser number
of shares as are properly tendered. 1,500,000 shares represents approximately
33% of our outstanding common stock. We will not pay any additional
consideration for the common stock purchase rights. All the shares that you
tender in the offer may not be purchased even if they are tendered at or below
the purchase price we select. If more than 1,500,000 shares are tendered, all
shares tendered at or below the purchase price will be purchased on a pro rata
basis, except for "odd lots" (holders of less than 100 shares), which will be
purchased on a priority basis. This preference is not available to partial
tenders or to beneficial or record holders of an aggregate of 100 or more
shares. We also expressly reserve the right to purchase more than 1,500,000
shares pursuant to the Offer to Purchase subject to applicable legal
requirements. The offer is not conditioned on any minimum number of shares being
tendered by shareholders. See Section 1.

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HOW WILL WOLOHAN PAY FOR THE SHARES?

We will need a maximum of $18,000,000 to purchase 1,500,000 shares,
assuming the price paid per share is $12.00. We intend to fund the purchase
price from our cash on hand. See Section 9.

HOW LONG DO I HAVE TO TENDER MY SHARES?

You may tender your shares until the tender offer expires. The offer will
expire on Friday, December 15, 2000, at 5:00 p.m., Eastern time, unless we
extend the offer. We may choose to extend the offer at any time. We cannot
assure you, however, that we will extend the offer or, if we extend it, for how
long. See Sections 1 and 15.

HOW WILL I BE NOTIFIED IF WOLOHAN EXTENDS THE OFFER?

If the offer is extended, we will make a public announcement of the
extension no later than 9:00 a.m. on the first business day after the previously
scheduled expiration of the offer period. See Section 15.

ARE THERE ANY CONDITIONS TO THE OFFER?

Yes. Our obligation to accept and pay for your tendered shares depends upon
the satisfaction or waiver of a number of conditions, including:

- No significant decrease in the price of our common stock or in the price
of equity securities generally and no adverse changes in the U.S. stock
markets or credit markets shall have occurred during this offer.

- No legal action shall have been threatened, pending or taken, that might
adversely affect the offer.

- No one shall have proposed, announced or made a tender or exchange offer
(other than this offer), merger, business combination or other similar
transaction involving us.

- No material change in our business, condition (financial or otherwise),
assets, income, operations, prospects or stock ownership shall have
occurred during this offer.

For more information on conditions to the offer, see Section 7.

HOW DO I TENDER MY SHARES?

To tender your shares, prior to 5:00 p.m., Eastern time, on Friday,
December 15, 2000 unless the offer is extended:

- you must deliver your share certificate(s) and a properly completed and
duly executed Letter of Transmittal to the Depositary at the address
appearing on the back cover page of this Offer to Purchase; or

- the Depositary must receive a confirmation of receipt of your shares by
book-entry transfer and a properly completed and duly executed Letter of
Transmittal or the other documents described in this Offer to Purchase;
or

- you must comply with the guaranteed delivery procedure outlined in
Section 3.

You may also contact the Information Agent, the Dealer Manager or your
broker for assistance. The contact information for the Information Agent and
Dealer Manager is set forth on the back cover page of this Offer to Purchase.
See Section 3 and the instructions to the Letter of Transmittal.

ONCE I HAVE TENDERED SHARES IN THE OFFER, CAN I WITHDRAW MY TENDERED SHARES?

Yes. You may withdraw your tendered shares at any time before 5:00 p.m.,
Eastern time, on Friday, December 15, 2000, unless we extend the offer, in which
case you can withdraw your shares until the

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expiration of the offer as extended. In addition, if we have not accepted for
payment the shares you have tendered to us, you may also withdraw your shares at
any time after 5:00 p.m., Eastern time, on Friday, December 15, 2000. See
Section 4.

HOW DO I WITHDRAW SHARES I PREVIOUSLY TENDERED?

To withdraw your shares, you must deliver on a timely basis a written,
telegraphic or facsimile notice of your withdrawal to the Depositary at the
address appearing on the back cover page of this Offer to Purchase. Your notice
of withdrawal must specify your name, the number of shares to be withdrawn and
the name of the registered holder of the shares. Some additional requirements
apply if the certificates for shares to be withdrawn have been delivered to the
Depositary or if your shares have been tendered under the procedure for
book-entry transfer set forth in Section 3. See Section 4.

IN WHAT ORDER WILL TENDERED SHARES BE PURCHASED?

First, we will purchase shares from all holders of "odd lots" of less than
100 shares who properly tender all of their shares at or below the purchase
price selected by us. Second, after purchasing all shares from the "odd lot"
holders, we will purchase shares from all other shareholders who properly tender
shares at or below the purchase price selected by us, on a pro rata basis,
subject to the conditional tender provisions described in Section 6. Therefore,
all of the shares that you tender in the offer may not be purchased even if they
are tendered at or below the purchase price. See Section 1.

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

Shareholders who determine not to accept the offer will increase their
proportionate interest in our equity, and therefore our future earnings and
assets, subject to our right to issue additional shares and other equity
securities in the future.

WHAT DO WOLOHAN AND ITS BOARD OF DIRECTORS THINK OF THE OFFER?

Our Board of Directors has approved this offer. However, neither we nor our
Board of Directors nor the Dealer Manager is making any recommendation whether
you should tender or refrain from tendering your shares or at what purchase
price you should choose to tender your shares. You must decide whether to tender
your shares and, if so, how many shares to tender and the price or prices at
which you will tender them. You should discuss whether to tender your shares
with your broker or other financial advisor. The directors and executive
officers have advised us that they do not intend to tender any of their shares
in the offer except for one officer. See Section 2.

WHEN WILL WOLOHAN PAY ME FOR THE SHARES I TENDER?

We will pay the purchase price, in cash, without interest, for the shares
we purchase as promptly as practicable after the expiration of the offer and the
acceptance of the shares for payment. See Sections 1 and 5.

WHAT IS THE RECENT MARKET PRICE OF MY SHARES?

On November 8, 2000, the last full trading day before the announcement of
the offer, the last reported sale price of the shares on The Nasdaq Stock Market
was $8.141. You are urged to obtain current market quotations for your shares.

WILL I HAVE TO PAY BROKERAGE COMMISSIONS IF I TENDER MY SHARES?

If you are a registered shareholder and you tender your shares directly to
the Depositary, you will not incur any brokerage commission. If you hold shares
through a broker or bank, we urge you to consult your broker or bank to
determine whether transaction costs are applicable. See the Introduction and
Section 3.

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WHAT ARE THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES IF I TENDER MY
SHARES?

Generally, you will be subject to United States federal income taxation
when you receive cash from us in exchange for the shares you tender. The receipt
of cash for your tendered shares will be treated either as (1) a sale or
exchange eligible for capital gains treatment or (2) a dividend subject to
ordinary income tax rates. See Section 14.

WILL I HAVE TO PAY STOCK TRANSFER TAX IF I TENDER MY SHARES?

If you instruct the Depositary in the related Letter of Transmittal to make
the payment for the shares to the registered holder, you will not incur any
stock transfer tax. See Section 5.

WHOM DO I CONTACT IF I HAVE QUESTIONS ABOUT THE OFFER?

The Information Agent or Dealer Manager can help answer your questions. The
Information Agent is MacKenzie Partners, Inc. and the Dealer Manager is U.S.
Bancorp Piper Jaffray Inc. Their contact information is set forth on the back
cover page of this Offer to Purchase.

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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
FORWARD LOOKING STATEMENTS.......................................... 6
INTRODUCTION........................................................ 7
THE OFFER........................................................... 9
1. Number of Shares............................................ 9
2. Purpose of the Offer; Certain Effects of the Offer.......... 11
3. Procedures for Tendering Shares............................. 13
4. Withdrawal Rights........................................... 17
5. Purchase of Shares and Payment of Purchase Price............ 18
6. Conditional Tender of Shares................................ 19
7. Conditions of the Offer..................................... 19
8. Price Range of Shares; Dividends; Rights Plan............... 22
9. Interests of Directors and Executive Officers; Transactions
and Arrangements
Concerning the Shares....................................... 23
10. Source and Amount of Funds.................................. 24
11. Certain Information Concerning Us........................... 24
12. Effects of the Offer on the Market for Shares; Registration
Under the Exchange Act...................................... 32
13. Certain Legal Matters; Regulatory Approvals................. 32
14. Certain United States Federal Income Tax Consequences....... 32
15. Extension of the Offer; Termination; Amendment.............. 35
16. Fees and Expenses........................................... 35
17. Miscellaneous............................................... 36
</TABLE>

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FORWARD LOOKING STATEMENTS

This Offer to Purchase, the Introduction, Sections 2, 11 and 14 and
documents incorporated by reference contain statements that are not historical
facts and constitute projections, forecasts or forward-looking statements. These
statements may be identified by the use of forward-looking words or phrases such
as "believes," "expects," "anticipates," "intends," "plans," "estimates," "may"
and "should". These statements are not guarantees of performance. They are
inherently subject to known and unknown risks, uncertainties and assumptions
that could cause our future results and shareholder value to differ materially
from those expressed in these statements. Our actual actions or results may
differ materially from those expected or anticipated in the forward-looking
statements. Specific factors that might cause such a difference, include, but
are not limited to:

- fluctuations in customer demand and spending;

- expectations of future volumes and prices for our products;

- the level of competition we experience in our business and its effect on
pricing;

- seasonality of operating results;

- prevailing economic conditions affecting the retail lumber and building
materials markets; and

- other uncertainties, all of which are difficult to predict and many of
which are beyond our control.

We undertake no obligation to make any revision to the forward-looking
statements contained in this Offer to Purchase or to update them to reflect
events or circumstances occurring after the date of this Offer to Purchase

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TO THE HOLDERS OF OUR COMMON STOCK:

INTRODUCTION

Wolohan Lumber Co., a Michigan corporation, invites its shareholders to
tender shares of our common stock, $1.00 par value per share, for purchase by
it. We are offering to purchase up to 1,500,000 shares at a price not greater
than $12.00 nor less than $10.00 per share, net to the seller in cash, without
interest.

We will select the lowest purchase price that will allow us to buy
1,500,000 shares or, if a lesser number of shares are properly tendered, all
shares that are properly tendered and not properly withdrawn. All shares
acquired in the offer will be acquired at the same purchase price.

Our offer is being made upon the terms and subject to the conditions set
forth in this Offer to Purchase and in the related Letter of Transmittal which,
as they may be amended or supplemented from time to time, together constitute
this offer. All shares tendered and purchased will include the tender and
purchase of the associated common stock purchase rights issued pursuant to the
Rights Agreement dated as of February 16, 2000, between us and Registrar and
Transfer Company, as rights agent, and, unless the context otherwise requires,
all references in this document to shares include the associated common stock
purchase rights.

Only shares properly tendered at prices at or below the purchase price we
select and not properly withdrawn will be purchased. However, because of the
"odd lot" priority, proration and conditional tender provisions described in
this Offer to Purchase, all of the shares tendered at or below the purchase
price may not be purchased if more than the number of shares we seek are
tendered. We will return shares tendered at prices in excess of the purchase
price that we determine and shares we do not purchase because of proration or
conditional tenders as promptly as practicable following the Expiration Date.
See Section 3.

We reserve the right, in our sole discretion, to purchase more than
1,500,000 shares pursuant to the offer, subject to certain limitations and legal
requirements. See Sections 1 and 15.

The offer is not conditioned on any minimum number of shares being
tendered. The offer is, however, subject to other conditions. See Section 7.

Our Board of Directors has approved this offer. However, neither we nor our
Board of Directors nor the Dealer Manager is making any recommendation whether
you should tender or refrain from tendering your shares or at what purchase
price you should choose to tender your shares. You must make your own decision
whether to tender your shares and, if so, how many shares to tender and the
price or prices at which you will tender them. In deciding whether to tender and
at what purchase price, you should consider our reasons for making this offer
and other available information about us. Our directors and executive officers
have advised us that they do not intend to tender any shares in the offer except
for one officer. See Section 2.

We are making the offer to afford to those shareholders who desire
liquidity an opportunity to sell all or a portion of their shares without the
usual transaction costs associated with open market sales. The offer also gives
shareholders an opportunity to sell their shares at a price greater than the
prevailing market price of the shares immediately prior to the announcement of
the offer. After the offer is completed we expect to have sufficient cash flow
and access to other sources of capital to fund currently anticipated investments
in our business and to operate our existing business.

If at the expiration of the offer, more than 1,500,000 shares (or such
greater number of shares as we may elect to purchase) are properly tendered at
or below the purchase price and not properly withdrawn, we will buy shares first
from all Odd Lot Holders (as defined in Section 1) who properly tender all their
shares at or below the purchase price, and second, on a pro rata basis from all
other shareholders who properly tender shares at or below the purchase price,
other than shareholders who tender conditionally, and for whom the condition is
not satisfied. See Section 1.

If you tender shares in the offer, your tender will include a tender of the
common stock purchase rights associated with your tendered shares. No separate
consideration will be paid for these rights. See Section 8.

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The purchase price will be paid net to the tendering shareholder in cash,
without interest, for all shares purchased. Tendering shareholders who hold
shares registered in their own names and who tender their shares directly to the
Depositary will not be obligated to pay brokerage commissions, solicitation fees
or, subject to Instruction 7 of the Letter of Transmittal, stock transfer taxes
on our purchase of shares in the offer. Shareholders holding shares through
brokers or banks are urged to consult the brokers or banks to determine whether
transaction costs may apply if shareholders tender shares through the brokers or
banks and not directly to the Depositary. Also, any tendering shareholder or
other payee who fails to complete, sign and return to the Depositary the
Substitute Form W-9 that is included as part of the Letter of Transmittal or
Form W-8 obtained from the Depository may be subject to required United States
federal income tax backup withholding equal to 31% of the gross proceeds payable
to the tendering shareholder or other payee pursuant to the offer. See Section
3.

We will pay the fees and expenses incurred in connection with the offer by
U.S. Bancorp Piper Jaffray Inc., the Dealer Manager for this offer, Registrar
and Transfer Company, the Depositary for this offer, and MacKenzie Partners,
Inc., the Information Agent for this offer.

As of November 9, 2000, we had 4,577,260 issued and outstanding shares, and
475,994 shares reserved for issuance as performance shares and upon exercise of
outstanding stock options. The 1,500,000 shares that we are offering to purchase
pursuant to the offer represent approximately 33% of our shares outstanding on
November 9, 2000. The shares are listed and traded on The Nasdaq Stock Market
under the symbol "WLHN." On November 8, 2000, the last full trading day before
the announcement of the offer, the last reported sale price of the shares as
reported on The Nasdaq Stock Market was $8.141. Shareholders are urged to obtain
current market quotations for the shares. See Section 8.

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THE OFFER

1. NUMBER OF SHARES.

Upon the terms and subject to the conditions of the offer, we will purchase
1,500,000 shares, or the lesser number of shares that are properly tendered and
not properly withdrawn in accordance with Section 4 before the Expiration Date,
as defined below, at prices not greater than $12.00 nor less than $10.00 per
share, net to the seller in cash, without interest.

The term "Expiration Date" means 5:00 p.m., Eastern time, on Friday,
December 15, 2000. We may, in our sole discretion, extend the period of time
during which the offer will remain open. In the event of an extension, the term
"Expiration Date" will refer to the latest time and date at which the offer, as
extended by us, will expire. See Section 15 for a description of our right to
extend, delay, terminate or amend the offer.

In accordance with Instruction 5 of the Letter of Transmittal, shareholders
desiring to tender shares must either (1) specify that they are willing to sell
their shares to us at the price determined in the offer, or (2) specify the
price, not greater than $12.00 nor less than $10.00 per share, at which they are
willing to sell their shares to us in the offer. As promptly as practicable
following the Expiration Date, we will, upon the terms and subject to the
conditions of the offer, determine a single per share purchase price (in
multiples of $0.125) that we will pay for shares properly tendered and not
properly withdrawn pursuant to the offer, taking into account the number of
shares tendered and the prices specified by tendering shareholders. We will
select the lowest purchase price that will allow us to buy 1,500,000 shares or,
if a lesser number of shares are properly tendered, all shares that are properly
tendered and not properly withdrawn. All shares purchased in the offer will be
purchased at the same purchase price even if you have specified a lower price.

Only shares properly tendered at prices at or below the purchase price we
determine and not properly withdrawn will be purchased. However, because of the
"odd lot" priority, proration and conditional tender provisions, all of the
shares tendered at or below the purchase price may not be purchased if more than
the number of shares we seek are properly tendered. All shares tendered and not
purchased pursuant to the offer, including shares tendered at prices in excess
of the purchase price we determine and shares not purchased because of proration
or conditional tenders, will be returned to the tendering shareholders at our
expense as promptly as practicable following the Expiration Date.

We reserve the right to purchase more than 1,500,000 shares pursuant to the
offer. In accordance with applicable regulations of the Securities and Exchange
Commission, we may purchase pursuant to the offer an additional number of shares
not to exceed 2% of the outstanding shares without amending or extending the
offer. See Section 15.

In the event of an oversubscription of the offer, shares tendered at or
below the purchase price before the Expiration Date will be subject to
proration, except for Odd Lots (as defined below).

If we (1) increase the price that may be paid for shares above $12.00 per
share or decrease the price that may be paid for shares below $10.00 per share,
(2) materially increase the Dealer Manager fee, (3) increase the number of
shares that we may purchase in the offer by more than 2% of our outstanding
shares, or (4) decrease the number of shares that we may purchase in the offer,
then the offer must remain open for at least ten business days following the
date that notice of the increase or decrease is first published, sent or given
in the manner specified in Section 15.

The offer is not conditioned on any minimum number of shares being
tendered. The offer is, however, subject to other conditions. See Section 7.

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Priority of Purchases. If more than 1,500,000 shares (or a greater number
of shares as we may elect to purchase) have been properly tendered at prices at
or below the purchase price selected by us and not properly withdrawn before the
Expiration Date, we will purchase properly tendered shares on the basis set
forth below:

- First, we will purchase all shares tendered by any Odd Lot Holder (as
defined below) who:

(1) tenders all shares owned beneficially or of record by the Odd Lot
Holder at a price at or below the purchase price selected by us
(tenders of less than all of the shares owned by the Odd Lot
Holder will not qualify for this preference); and

(2) completes the section entitled "Odd Lots" in the Letter of
Transmittal and, if applicable, in the Notice of Guaranteed
Delivery.

- Second, after the purchase of all of the shares properly tendered by Odd
Lot Holders, subject to the conditional tender provisions described in
Section 6, we will purchase all other shares tendered at prices at or
below the purchase price, on a pro rata basis with appropriate
adjustments to avoid purchases of fractional shares, as described below.

Therefore, all of the shares that a shareholder tenders in the offer may not be
purchased even if they are tendered at prices at or below the purchase price.

Odd Lots. The term "Odd Lots" means all shares tendered at prices at or
below the purchase price selected by us by any person (an "Odd Lot Holder") who
owned beneficially or of record a total of fewer than 100 shares and so
certified in the appropriate place on the Letter of Transmittal and, if
applicable, on the Notice of Guaranteed Delivery. To qualify for this
preference, an Odd Lot Holder must tender all shares owned by the Odd Lot Holder
in accordance with the procedures described in Section 3. Odd Lots will be
accepted for payment before any proration of the purchase of other tendered
shares. This preference is not available to partial tenders or to beneficial or
record holders of an aggregate of 100 or more shares, even if these holders have
separate accounts or certificates representing fewer than 100 shares. By
tendering in the offer, an Odd Lot Holder who holds shares in its name and
tenders its shares directly to the Depositary would avoid the payment of
brokerage commissions in a sale of the holder's shares. Any Odd Lot Holder
wishing to tender all of the shareholder's shares pursuant to the offer should
complete the section entitled "Odd Lots" in the Letter of Transmittal and, if
applicable, in the Notice of Guaranteed Delivery.

We also reserve the right, but will not be obligated, to purchase all
shares properly tendered by any shareholder who tenders any shares owned
beneficially or of record, at or below the purchase price selected by us and
who, as a result of proration, would then own beneficially or of record, an
aggregate of fewer than 100 shares. If we exercise this right, we will increase
the number of shares that we are offering to purchase in the offer by the number
of shares purchased through the exercise of this right.

Proration. If proration of tendered shares is required, we will determine
the proration factor as promptly as practicable following the Expiration Date.
Proration for each shareholder tendering shares, other than Odd Lot Holders,
will be based on the ratio of the number of shares tendered by the shareholder
to the total number of shares tendered by all shareholders, other than Odd Lot
Holders, at or below the purchase price selected by us. Because of the
difficulty in determining the number of shares properly tendered and not
properly withdrawn, and because of the Odd Lot procedure described above and the
conditional tender procedure described in Section 6, we do not expect that we
will be able to announce the final proration factor or commence payment for any
shares purchased pursuant to the offer until about seven business days after the
Expiration Date. The preliminary results of any proration will be announced by
press release as promptly as practicable after the Expiration Date. After the
Expiration Date, shareholders may obtain preliminary proration information from
the Information Agent and also may be able to obtain the information from their
brokers.

As described in Section 14, the number of shares that we will purchase from
a shareholder pursuant to the offer may affect the United States federal income
tax consequences to the shareholder of the purchase and, therefore, may be
relevant to a shareholder's decision whether or not to tender shares. The Letter
of

10
<PAGE> 13

Transmittal affords each tendering shareholder the opportunity to designate the
order of priority in which shares tendered are to be purchased in the event of
proration.

This Offer to Purchase and the related Letter of Transmittal will be mailed
to record holders of the shares and will be furnished to brokers, banks and
similar persons whose names, or the names of whose nominees, appear on our
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.

2. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER

Our Board of Directors believes that, given our businesses, assets and
prospects, the purchase of the shares pursuant to the offer is an attractive
investment that will benefit us and our remaining shareholders. The offer
provides shareholders who are considering a sale of all or a portion of their
shares the opportunity to determine the price or prices (not greater than $12.00
nor less than $10.00 per share) at which they are willing to sell their shares
and, if any shares are purchased pursuant to the offer, to sell those shares for
cash to us without the usual costs associated with a market sale. The offer
gives shareholders an opportunity to sell their shares at a price greater than
the prevailing market prices of the shares immediately prior to the announcement
of the offer. Shareholders who determine not to accept the offer will increase
their proportionate interest in our equity, and therefore our future earnings
and assets, subject to our right to issue additional shares and other equity
securities in the future.

On July 25, 1998, our Board of Directors authorized the repurchase of up to
1.5 million shares of common stock from time to time at the discretion of the
management on the open market, in privately negotiated transactions or otherwise
and on April 30, 1999 authorized the repurchase of an additional one million
shares. Such authorization was based upon the determination of the Board of
Directors that company repurchases of shares would provide a liquidity
opportunity for those shareholders wishing to dispose of their shares and
enhance shareholder value for the remaining shareholders, and that such
repurchases would be in the best interests of Wolohan and its shareholders.
Since September 26, 1998 we have repurchased under this repurchase program the
following number of shares in the fiscal quarters indicated and at the average
purchase price shown below:

<TABLE>
<CAPTION>
RANGE OF
NUMBER OF PURCHASE AVERAGE PURCHASE
SHARES PRICE PAID PRICE PER SHARE
--------- ---------- ----------------
<S> <C> <C> <C>
1998
Fourth Quarter................................. 325,466 $11.25 - $13.13 $13.06
1999
First Quarter.................................. 218,106 12.75 - 13.00 12.92
Second Quarter................................. 69,359 11.75 - 12.88 12.31
Third Quarter.................................. 33,505 12.50 - 13.00 12.91
Fourth Quarter................................. 218,056 12.00 - 13.00 12.71
2000
First Quarter.................................. 102,663 11.13 - 13.00 12.31
Second Quarter................................. 221,008 9.75 - 11.00 10.64
Third Quarter.................................. 102,452 10.06 - 11.00 10.60
Fourth Quarter (through October 13, 2000)...... 38,475 10.00 - 10.31 10.12
</TABLE>

11
<PAGE> 14

necessary to fund our working capital, physical plant, and other needs related
to current operations in the foreseeable future. Moreover, we have analyzed a
variety of other alternatives for utilizing this cash, including potential
opportunities for acquisitions. Our management does not view any of these
alternatives to be in the best interest of enhancing shareholder value at this
time and we therefore are seeking to utilize the cash to deliver value directly
to our shareholders.

Our management has elected to pursue the offer as a means of delivering
value to shareholders because it is a potentially tax-efficient event as
compared to other alternatives such as a special cash dividend. This tax
efficiency is a result of dividends being treated as ordinary income to
shareholders whereas the sale of tendered shares may result in lower taxation
for many shareholders because gains realized may be taxed at capital gains
rates. While no guarantees exist with respect to such tax treatment (see Section
14), our management believed the likelihood of these conditions being met to be
high enough to warrant recommendation of the offer to the Board of Directors.

We believe that after the offer is completed, we will have sufficient cash
flow and access to other sources of capital in order to fund our working capital
needs and provide for our current capital expenditure requirements. Future
events may adversely or materially affect our business, expenses or prospects
and could affect our available cash or the availability or cost of external
financial resources.

Our Board has approved the offer. However, neither we nor our Board of
Directors nor the Dealer Manager makes any recommendation to shareholders as to
whether to tender or refrain from tendering their shares or as to the purchase
price at which shareholders should tender their shares, and none of them have
authorized any person to make any recommendation. Shareholders are urged to
evaluate carefully all information in the offer, consult with their own
investment and tax advisors and make their own decision whether to tender and,
if so, how many shares to tender and the price or prices at which to tender
them. We have been advised that none of our directors or executive officers
intends to tender any of their shares pursuant to this offer except for David G.
Honaman, Senior Vice President, Secretary and Chief Financial Officer, who
intends to tender 4,000 shares pursuant to the offer at the price determined
pursuant to the offer.

Certain Effects of the Offer. Upon the completion of the offer,
non-tendering shareholders will realize a proportionate increase in their
relative ownership interest in our company and, thus, in our future earnings and
assets, subject to our right to issue additional shares and other equity
securities in the future. Shareholders may be able to sell non-tendered shares
in the future on Nasdaq or otherwise, at a net price significantly higher than
the purchase price in the offer. We can give no assurance, however, as to the
price at which a shareholder may be able to sell his or her shares in the
future, which may be higher or lower than the purchase price paid by us in this
offer.

Shares that we acquire in this offer will be restored to the status of
authorized but unissued shares and will be available for us to issue in the
future without further shareholder action (except as required by applicable law
or Nasdaq rules) for all purposes, such as the acquisition of other businesses
or the raising of additional capital for use in our business. We have no current
plans for the issuance of shares repurchased pursuant to this offer.

Except as disclosed in this Offer to Purchase, we currently have no plans,
proposals or negotiations underway other than what has previously been disclosed
that relate to or would result in:

- any extraordinary transaction, such as a merger, reorganization or
liquidation, involving us;

- any purchase, sale or transfer of a material amount of our assets;

- any material change in amounts we have available for borrowing under our
line of credit;

- any change in our present Board of Directors or management or any plans
or proposals to change the number or the term of directors or to change
any material term of the employment contract of any executive officer;

- any material change in our present dividend rate or policy or our
indebtedness or our capitalization, corporate structure or business;

12
<PAGE> 15

- any class of our equity securities being delisted by Nasdaq or cease to
be authorized to be quoted in an automated quotations system operated by
a national securities association;

- any class of our equity securities becoming eligible for termination of
registration under Section 12(g)(4) of the Securities Exchange Act of
1934, as amended (the "Exchange Act");

- the suspension of our obligation to file reports under Section 15(d) of
the Exchange Act;

- the acquisition or disposition by any person of our securities; or

- any changes in our articles of incorporation, bylaws or other governing
instruments or other actions that could impede the acquisition of control
of us.

Subsequent to the offer, we intend to consider periodically additional
purchases of shares pursuant to one or more open-market purchase programs. As a
result, we may in the future, purchase additional shares in the open market, in
private transactions, through tender offers or otherwise, subject to the
approval of our Board. Future purchases may be on the same terms as this offer
or on terms that are more or less favorable to shareholders than the terms of
this offer. However, Rule 13e-4 under the Exchange Act prohibits us and our
affiliates from purchasing any shares, other than pursuant to the offer, until
at least ten business days after the Expiration Date. Any future purchases by us
will depend on many factors, including:

- the market price of the shares at that time;

- the results of this offer;

- our business and financial position; and

- general economic and market conditions.

3. PROCEDURES FOR TENDERING SHARES.

Proper Tender of Shares. For shares to be tendered properly pursuant to
the offer, either (1) or (2) below must happen:

(1) the certificates for the shares, or confirmation of receipt of the
shares pursuant to the procedure for book-entry transfer set forth
below, together with (a) a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile of the
Letter of Transmittal), including any required signature
guarantees, (b) an Agent's Message (as defined below) in the case
of a book-entry transfer or (c) the specific acknowledgement in
the case of a tender through the Automated Tender Offer Program
(as described below) of the Book-Entry Transfer Facility (as
defined below), and any other documents required by the Letter of
Transmittal, must be received before 5:00 p.m., Eastern time, on
the Expiration Date by the Depositary at its address set forth on
the back cover of this Offer to Purchase; or

(2) the tendering shareholder must comply with the guaranteed delivery
procedure set forth below.

In accordance with Instruction 5 of the Letter of Transmittal, each
shareholder desiring to tender shares pursuant to the offer must either (1)
check the box in the section of the Letter of Transmittal captioned "Shares
Tendered at a Price Determined Pursuant to the Offer" or (2) check one of the
boxes in the section of the Letter of Transmittal captioned "Price (In Dollars)
per Share at Which Shares Are Being Tendered" indicating the price at which
shares are being tendered. A tender of shares will be proper if and only if, one
of these boxes is checked on the Letter of Transmittal.

If tendering shareholders wish to maximize the chance that their shares
will be purchased, they should check the box in the section on the Letter of
Transmittal captioned "Shares Tendered at a Price Determined Pursuant to the
Offer." Note that this election could result in the tendered shares being
purchased at the minimum price of $10.00 per share.

If tendering shareholders wish to indicate a specific price (in multiples
of $0.125) at which their shares are being tendered, they must check a box under
the section captioned "Price (In Dollars) per Share at

13
<PAGE> 16

Which Shares Are Being Tendered." Tendering shareholders should be aware that
this election could mean that none of their shares will be purchased if they
check a box other than the box representing the lowest price. A shareholder who
wishes to tender shares at more than one price must complete separate letters of
transmittal for each price at which shares are being tendered. The same shares
cannot be tendered (unless previously properly withdrawn in accordance with the
terms of the offer) at more than one price.

Odd Lot Holders who tender all their shares must also complete the section
captioned "Odd Lots" in the Letter of Transmittal and, if applicable, in the
Notice of Guaranteed Delivery, to qualify for the preferential treatment
available to Odd Lot Holders as set forth in Section 1.

Shareholders who hold shares through brokers or banks are urged to consult
the brokers or banks to determine whether transaction costs may apply if
shareholders tender shares through the brokers or banks and not directly to the
Depositary.

Signature Guarantees and Method of Delivery. No signature guarantee is
required if:

(1) the Letter of Transmittal is signed by the registered holder of
the shares (which term, for purposes of this Section 3, will
include any participant in The Depository Trust Company (the
"Book-Entry Transfer Facility") whose name appears on a security
position listing as the owner of the shares) tendered and the
holder has not completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions"
on the Letter of Transmittal; or

(2) shares are tendered for the account of a bank, broker, dealer,
credit union, savings association or other entity that is a member
in good standing of the Securities Transfer Agents Medallion
Program or a bank, broker, dealer, credit union, savings
association or other entity that is an "eligible guarantor
institution," as the term is defined in Rule 17Ad-15 under the
Exchange Act (each of the foregoing constitutes an "Eligible
Institution"). See Instruction 1 of the Letter of Transmittal.

If a certificate for shares is registered in the name of a person other
than the person executing a Letter of Transmittal, or if payment is to be made,
or shares not purchased or tendered are to be issued, to a person other than the
registered holder, then the certificate must be endorsed or accompanied by an
appropriate stock power, in either case, signed exactly as the name of the
registered holder appears on the certificate, with the signature guaranteed by
an Eligible Institution.

In all cases, payment for shares tendered and accepted for payment pursuant
to the offer will be made only after timely receipt by the Depositary of
certificates for the shares (or a timely confirmation of the book-entry transfer
of the shares into the Depositary's account at the Book-Entry Transfer Facility
as described above), a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile of the Letter of Transmittal), an
Agent's Message in the case of a book-entry transfer or the specific
acknowledgment in the case of a tender through the Automated Tender Offer
Program of the Book-Entry Transfer Facility, and any other documents required by
the Letter of Transmittal.

The method of delivery of all documents, including certificates for shares,
the Letter of Transmittal and any other required documents, is at the election
and risk of the tendering shareholder. If delivery is by mail, we recommend that
shareholders use registered mail with return receipt requested, properly
insured. In all cases, sufficient time should be allowed to ensure timely
delivery.

Book-Entry Delivery. The Depositary will establish an account with respect
to the shares for purposes of the offer at the Book-Entry Transfer Facility
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of the shares by causing the
Book-Entry Transfer Facility to transfer shares into the Depositary's account in
accordance with the Book-Entry Transfer Facility's procedures for transfer.
Although delivery of shares may be effected through a book-entry transfer into
the Depositary's account at the Book-Entry Transfer Facility, either (1) a
properly completed and duly executed Letter of Transmittal (or a manually signed
facsimile of the Letter of Transmittal), with any required signature guarantees,
an Agent's

14
<PAGE> 17

Message in the case of a book-entry transfer or the specific acknowledgement in
the case of a tender through the Automated Tender Offer Program of the
Book-Entry Transfer Facility, and any other required documents must be
transmitted to and received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase before the Expiration Date, or (2)
the guaranteed delivery procedure described below must be followed. Delivery of
the Letter of Transmittal and any other required documents to the Book-Entry
Transfer Facility does not constitute delivery to the Depositary.

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 acknowledgement from the participant in the Book-Entry
Transfer Facility tendering shares that such participant has received and agrees
to be bound by the terms of the Letter of Transmittal and that we may enforce
such agreement against the participant.

Participants in the Book-Entry Transfer Facility may tender their shares in
accordance with the Automated Tender Offer Program to the extent it is available
to them for the shares they wish to tender. A shareholder tendering through the
Automated Tender Offer Program must expressly acknowledge that the shareholder
has received and agreed to be bound by the Letter of Transmittal and that the
Letter of Transmittal may be enforced against them.

Guaranteed Delivery. If a shareholder desires to tender shares pursuant to
the offer and the shareholder's share certificates are not immediately available
or cannot be delivered to the Depositary before the Expiration Date (or the
procedure for book-entry transfer cannot be completed on a timely basis), or if
time will not permit all required documents to reach the Depositary before the
Expiration Date, the shares still may be tendered, if all of the following
conditions are satisfied:

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

(2) the Depositary receives by hand, mail, overnight courier, telegram
or facsimile transmission, on or before the Expiration Date, a
properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form we have provided with this Offer to
Purchase, including (where required) a signature guarantee by an
Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery; and

(3) the certificates for all tendered shares, in proper form for
transfer (or confirmation of book-entry transfer of the shares
into the Depositary's account at the Book-Entry Transfer
Facility), together with a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile of the
Letter of Transmittal), including any required signature
guarantees, an Agent's Message in the case of a book-entry
transfer or the specific acknowledgement in the case of a tender
through the Automated Tender Offer Program of the Book-Entry
Transfer Facility, and any other documents required by the Letter
of Transmittal, are received by the Depositary within three Nasdaq
trading days after the date of receipt by the Depositary of the
Notice of Guaranteed Delivery.

Return of Unpurchased Shares. If any tendered shares are not purchased, or
if less than all shares evidenced by a shareholder's certificates are tendered,
certificates for unpurchased shares will be returned as promptly as practicable
after the expiration or termination of the offer or, in the case of shares
tendered by book-entry transfer at the Book-Entry Transfer Facility, the shares
will be credited to the appropriate account maintained by the tendering
shareholder at the Book-Entry Transfer Facility, in each case without expense to
the shareholder.

Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the number of shares
to be accepted, the purchase price to be paid for shares to be accepted and the
validity, form, eligibility (including time of receipt) and acceptance for
payment of any tender of shares will be determined by us, in our sole
discretion, and our determination will be final and binding on all parties. We
reserve the absolute right to reject any or all tenders of any shares that we
determine are not in proper form or the acceptance for payment of or payment for
which may, in the opinion of our counsel, be unlawful. We also reserve the
absolute right to waive any of the conditions of the offer or any
15
<PAGE> 18

defect or irregularity in any tender with respect to any particular shares or
any particular shareholder, and our interpretation of the terms of the offer
will be final and binding on all parties. No tender of shares will be deemed to
have been properly made until all defects or irregularities have been cured by
the tendering shareholder or waived by us. We will not, nor will the Dealer
Manager, the Depositary, the Information Agent or any other person, be obligated
to give notice of any defects or irregularities in tenders, nor will any of them
incur any liability for failure to give any notice.

Tendering Shareholder's Representation and Warranty; Our Acceptance
Constitutes an Agreement. A tender of shares pursuant to any of the procedures
described above will constitute the tendering shareholder's acceptance of the
terms and conditions of the offer, as well as the tendering shareholder's
representation and warranty to us that (1) the shareholder has a "net long
position," within the meaning of Rule 14e-4 promulgated by the SEC under the
Exchange Act, in the shares or equivalent securities at least equal to the
shares being tendered, and (2) the tender of shares complies with Rule 14e-4. It
is a violation of Rule 14e-4 for a person, directly or indirectly, to tender
shares for that person's own account unless, at the time of tender and at the
end of the proration period or period during which shares are accepted by lot
(including any extensions thereof), the person so tendering (1) has a net long
position equal to or greater than the amount of (a) shares tendered or (b) other
securities convertible into or exchangeable or exercisable for the shares
tendered and will acquire the shares for tender by conversion, exchange or
exercise and (2) will deliver or cause to be delivered the shares in accordance
with the terms of the offer. Rule 14e-4 provides a similar restriction
applicable to the tender or guarantee of a tender on behalf of another person.
Our acceptance for payment of shares tendered pursuant to the offer will
constitute a binding agreement between the tendering shareholder and us on the
terms and conditions of the offer.

United States Federal Income Tax Backup Withholding. Under the United
States federal income tax backup withholding rules, unless an exemption applies
under the applicable law and regulations, 31% of the gross proceeds payable to a
shareholder or other payee pursuant to the offer must be withheld and remitted
to the United States Internal Revenue Service ("IRS"), unless the shareholder or
other payee provides his or her taxpayer identification number (employer
identification number or social security number) to the Depositary (as payor)
and certifies under penalties of perjury that the number is correct. Therefore,
each tendering shareholder should complete and sign the Substitute Form W-9
included as part of the Letter of Transmittal so as to provide the information
and certification necessary to avoid backup withholding unless the shareholder
otherwise establishes to the satisfaction of the Depositary that the shareholder
is not subject to backup withholding. If the United States Holder does not
provide the Depositary with the correct taxpayer identification number, the
United States Holder (as defined in Section 14) may be subject to penalties
imposed by the IRS. If withholding results in an overpayment of taxes, a refund
may be obtained from the IRS in accordance with its refund procedures. Certain
"exempt recipients" (including, among others, all corporations and certain
Non-United States Holders (as defined in Section 14)) are not subject to these
backup withholding and information reporting requirements. In order for a
Non-United States Holder to qualify as an exempt recipient, that shareholder
must submit an IRS Form W-8 BEN or W-8 ECI, signed under penalties of perjury,
attesting to that shareholder's exempt status. These statements can be obtained
from the Depositary. See Instruction 14 of the Letter of Transmittal.

To prevent United States federal income tax backup withholding equal to 31%
of the gross payments made to shareholders for shares purchased pursuant to the
offer, each shareholder who does not otherwise establish an exemption from the
backup withholding must provide the Depositary with the shareholder's correct
taxpayer identification number and provide other information by completing the
Substitute Form W-9 included as part of the Letter of Transmittal.

Withholding For Non-United States Holders. Even if a Non-United States
Holder has provided the required certification to avoid backup withholding, the
Depositary will withhold United States federal income taxes equal to 30% of the
gross payments payable to a Non-United States Holder or his agent unless the
Depositary determines that a reduced rate of withholding is available under a
tax treaty or that an exemption from withholding is applicable because the gross
proceeds are effectively connected with the conduct of a trade or business
within the United States. To obtain a reduced rate of withholding under a tax
treaty, a Non-United States Holder must deliver to the Depositary before the
payment a properly completed and executed
16
<PAGE> 19

IRS Form W-8 BEN. To obtain an exemption from withholding on the grounds that
the gross proceeds paid pursuant to the offer are effectively connected with the
conduct of a trade or business within the United States, a Non-United States
Holder must deliver to the Depositary a properly completed and executed IRS Form
W-8 ECI. A Non-United States Holder that qualifies for an exemption from
withholding by delivering IRS Form W-8 ECI will generally be required to file a
United States federal income tax return and will be subject to United States
federal income tax on income derived from the sale of shares pursuant to the
offer in the manner and to the extent described in Section 14 as if it were a
United States Holder. The Depositary will determine a shareholder's status as a
Non-United States Holder and eligibility for a reduced rate of, or exemption
from, withholding by reference to any outstanding certificates or statements
concerning eligibility for a reduced rate of, or exemption from, withholding
(e.g., IRS Form W-8 BEN or IRS Form W-8 ECI) unless facts and circumstances
indicate that reliance is not warranted. A Non-United States Holder may be
eligible to obtain a refund of all or a portion of any tax withheld if the
Non-United States Holder meets those tests described in Section 14 that would
characterize the exchange as a sale (as opposed to a dividend) or is otherwise
able to establish that no tax or a reduced amount of tax is due.

Non-United States Holders are urged to consult their tax advisors regarding
the application of United States federal income tax withholding, including
eligibility for a withholding tax reduction or exemption, and the refund
procedure.

Lost or Destroyed Certificates. Shareholders whose certificates for part or
all of their shares have been lost, stolen or destroyed may contact the
Depositary for instructions as to the documents that will be required to be
submitted together with the Letter of Transmittal in order to receive stock
certificate(s) representing the shares. Shareholders are requested to contact
the Depositary immediately in order to permit timely processing of this
documentation.

Certificates for shares, together with a properly completed Letter of
Transmittal and any other documents required by the Letter of Transmittal, must
be delivered to the Depositary and not to us. Any documents delivered to us will
not be forwarded to the Depositary and will not be deemed to be properly
tendered.

4. WITHDRAWAL RIGHTS.

Shares tendered pursuant to the offer may be withdrawn at any time before
the Expiration Date and, unless already accepted for payment by us pursuant to
the offer, may also be withdrawn at any time after 5:00 p.m., Eastern time, on
Friday, December 15, 2000. Except as otherwise provided in this Section 4,
tenders of shares pursuant to the offer are irrevocable.

For a withdrawal to be effective, a notice of withdrawal must be in
written, telegraphic, telex or facsimile transmission form and must be received
in a timely manner by the Depositary at one of its addresses set forth on the
back cover of this Offer to Purchase. Any notice of withdrawal must specify the
name of the tendering shareholder, the number of shares to be withdrawn and the
name of the registered holder of the shares if different from that of the person
who tendered the shares. If the certificates for shares to be withdrawn have
been delivered or otherwise identified to the Depositary, then, before the
release of the certificates, the tendering shareholder must also submit the
serial numbers shown on the particular certificates for shares to be withdrawn
and the signature(s) on the notice of withdrawal must be guaranteed by an
Eligible Institution (except in the case of shares tendered for the account of
an Eligible Institution). If shares have been tendered pursuant to the procedure
for book-entry transfer described in Section 3, the notice of withdrawal also
must specify the name and the number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn shares and must otherwise comply with
the Book-Entry Transfer Facility's procedures.

All questions as to the form and validity, including the time of receipt,
of any notice of withdrawal will be determined by us, in our sole discretion,
which determination will be final and binding on all parties. Neither we nor the
Dealer Manager, the Depositary, the Information Agent or any other person will
be obligated to give notice of any defects or irregularities in any notice of
withdrawal, nor will any of them incur liability for failure to give any notice.

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<PAGE> 20

Withdrawals may not be rescinded, and any shares properly withdrawn will be
deemed not properly tendered for purposes of the offer. However, withdrawn
shares may be re-tendered before the Expiration Date by again following one of
the procedures described in Section 3.

If we extend the offer, are delayed in our purchase of shares or are unable
to purchase shares pursuant to the offer for any reason, then, without prejudice
to our rights under the offer, the Depositary may, subject to applicable law,
retain tendered shares on our behalf, and the shares may not be withdrawn except
to the extent tendering shareholders are entitled to withdrawal rights as
described in this Section 4. Our reservation of the right to delay payment for
shares that we have accepted for payment is limited by Rule 13e-4(f)(5) under
the Exchange Act, which requires that we must pay the consideration offered or
return the shares tendered promptly after termination or withdrawal of a tender
offer.

5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE.

As promptly as practicable following the Expiration Date, we (1) will
determine a single per share purchase price we will pay for the shares properly
tendered and not properly withdrawn before the Expiration Date, taking into
account the number of shares tendered and the prices specified by tendering
shareholders, and (2) will accept for payment and pay for (and thereby purchase)
up to 1,500,000 shares properly tendered at prices at or below the purchase
price and not properly withdrawn before the Expiration Date. For purposes of the
offer, we will be deemed to have accepted for payment (and therefore purchased),
subject to the "odd lot" priority, proration and conditional tender provisions
of this offer, shares that are properly tendered at or below the purchase price
selected by us and not properly withdrawn only when, as and if we give oral or
written notice to the Depositary of its acceptance of the shares for payment
pursuant to the offer.

We will accept for payment and pay the per share purchase price for all of
the shares accepted for payment pursuant to the offer as soon as practicable
after the Expiration Date. In all cases, payment for shares tendered and
accepted for payment pursuant to the offer will be made promptly, subject to
possible delay in the event of proration or conditional tender, but only after
timely receipt by the Depositary of certificates for shares, or of a timely
Book-Entry Confirmation of shares into the Depositary's account at the
Book-Entry Transfer Facility, and a properly completed and duly executed Letter
of Transmittal (or manually signed facsimile of the Letter of Transmittal), an
Agent's Message in the case of a book-entry transfer or the specific
acknowledgement in the case of a tender through the Automated Tender Offer
Program of the Book-Entry Transfer Facility, and any other required documents.

We will pay for shares purchased pursuant to the offer by depositing the
aggregate purchase price for the shares with the Depositary, which will act as
agent for tendering shareholders for the purpose of receiving payment from us
and transmitting payment to the tendering shareholders.

In the event of proration, we will determine the proration factor and pay
for those tendered shares accepted for payment as soon as practicable after the
Expiration Date. However, we do not expect to be able to announce the final
results of any proration and commence payment for shares purchased until
approximately seven business days after the Expiration Date. Certificates for
all shares tendered and not purchased, including all shares tendered at prices
in excess of the purchase price and shares not purchased due to proration or
conditional tenders, will be returned or, in the case of shares tendered by
book-entry transfer, will be credited to the account maintained with the
Book-Entry Transfer Facility by the participant who delivered the shares, to the
tendering shareholder at our expense as promptly as practicable after the
Expiration Date or termination of the offer without expense to the tendering
shareholders. Under no circumstances will we pay interest on the purchase price,
including but not limited to, by reason of any delay in making payment. In
addition, if certain events occur, we may not be obligated to purchase shares
pursuant to the offer. See Section 7.

We will pay all stock transfer taxes, if any, payable on the transfer to us
of shares purchased pursuant to the offer. If, however, payment of the purchase
price is to be made to, or (in the circumstances permitted by the offer) if
unpurchased shares are to be registered in the name of, any person other than
the registered holder, or if tendered certificates are registered in the name of
any person other than the person signing the Letter of Transmittal, the amount
of all stock transfer taxes, if any (whether imposed on the registered holder
18
<PAGE> 21

or the other person), payable on account of the transfer to the person will be
deducted from the purchase price unless satisfactory evidence of the payment of
the stock transfer taxes, or exemption from payment of the stock transfer taxes,
is submitted. See Instruction 7 of the Letter of Transmittal.

Any tendering shareholder or other payee who fails to complete fully, sign
and return to the Depositary the Substitute Form W-9 included with the Letter of
Transmittal may be subject to required United States federal income tax backup
withholding of 31% of the gross proceeds paid to the shareholder or other payee
pursuant to the offer. See Section 3. Also see Section 3 regarding United States
federal income tax consequences for Non-United States shareholders.

6. CONDITIONAL TENDER OF SHARES.

Under certain circumstances and subject to the exceptions for Odd Lot
Holders described in Section 1, we may prorate the number of shares purchased
pursuant to the offer. As discussed in Section 14, the number of shares to be
purchased from a particular shareholder may affect the tax treatment of the
purchase to the shareholder and the shareholder's decision whether to tender.
The conditional tender alternative is made available so that a shareholder may
seek to structure the purchase of shares from the shareholder pursuant to the
offer in such a manner that it will be treated as a sale of such shares by the
shareholder, rather than the payment of a dividend to the shareholder, for
federal income tax purposes. Accordingly, a shareholder may tender shares
subject to the condition that a specified minimum number of the shareholder's
shares tendered pursuant to a Letter of Transmittal or Notice of Guaranteed
Delivery must be purchased if any shares tendered are purchased. Any shareholder
desiring to make a conditional tender must so indicate in the box captioned
"Conditional Tender" in the Letter of Transmittal or, if applicable, the Notice
of Guaranteed Delivery. Each shareholder is urged to consult with his or her own
tax advisor.

Any tendering shareholder wishing to make a conditional tender must
calculate and appropriately indicate the minimum number of shares that must be
purchased if any are purchased. If the effect of accepting tenders on a pro rata
basis would be to reduce the number of shares to be purchased from any
shareholder (tendered pursuant to a Letter of Transmittal or Notice of
Guaranteed Delivery) below the minimum number specified by that shareholder, the
conditional tender will automatically be regarded as withdrawn (except as
provided in the next paragraph). All shares tendered by a shareholder subject to
a conditional tender pursuant to the Letter of Transmittal or Notice of
Guaranteed Delivery and regarded as withdrawn as a result of proration will be
returned as promptly as practicable after the Expiration Date.

If conditional tenders would otherwise be regarded as withdrawn because of
proration and would cause the total number of shares to be purchased to fall
below 1,500,000, then to the extent feasible, we will select enough of the
conditional tenders that would otherwise have been deemed withdrawn to permit us
to purchase 1,500,000 shares. In selecting among the conditional tenders, we
will select by lot and will limit our purchase in each case to the designated
minimum of shares to be purchased.

7. CONDITIONS OF THE OFFER.

Notwithstanding any other provision of the offer, we may terminate or amend
the offer or may postpone the acceptance for payment of, or the purchase of and
the payment for shares tendered, subject to the rules under the Exchange Act, if
at any time on or after November 9, 2000 and before the Expiration Date any of
the following events have occurred (or have been determined by us to have
occurred) that, in our sole judgment and regardless of the circumstances giving
rise to the event or events (including any action or omission to act by us),
makes it inadvisable to proceed with the offer or with acceptance for payment:

- there has been threatened, instituted or pending any action, suit or
proceeding by any government or governmental, regulatory or
administrative agency, authority or tribunal or by any other person,
domestic or foreign, before any court, authority, agency or other
tribunal that directly or indirectly:

(1) challenges or seeks to make illegal, or to delay or otherwise directly
or indirectly to restrain, prohibit or otherwise affect the making of
the offer, the acquisition of some or all of the shares pursuant to
the offer or otherwise relates in any manner to the offer; or

19
<PAGE> 22

(2) in our reasonable judgment, could materially and adversely affect our
business, condition (financial or otherwise), income, operations or
prospects, taken as a whole, or otherwise materially impair in any way
the contemplated future conduct of our business or materially impair
the contemplated benefits of the offer to us;

- there has been any action threatened, instituted, pending or taken,
including any settlement, or any approval withheld, or any statute, rule,
regulation, judgment, order or injunction threatened, invoked, proposed,
sought, promulgated, enacted, entered, amended, enforced or deemed to be
applicable to the offer or us, including any settlement, by any court,
government or governmental, regulatory or administrative authority,
agency or tribunal, domestic or foreign, that, in our reasonable
judgment, could directly or indirectly:

(1) make the acceptance for payment of, or payment for, some or all of the
shares illegal or otherwise restrict or prohibit consummation of the
offer;

(2) delay or restrict our ability, or render us unable, to accept for
payment or pay for some or all of the shares;

(3) materially impair the contemplated benefits of the offer to us; or

(4) materially and adversely affect our business, condition (financial or
otherwise), income, operations or prospects, taken as a whole, or
otherwise materially impair in any way the contemplated future conduct
of our business;

- there has occurred any of the following:

(1) any general suspension of trading in, or limitation on prices for,
securities on any United States national securities exchange or in the
over-the-counter market;

(2) the declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States, whether or not mandatory;

(3) the commencement of a war, armed hostilities or other international or
national calamity directly or indirectly involving the United States;

(4) any limitation, whether or not mandatory, by any governmental,
regulatory or administrative agency or authority on, or any event
that, in our reasonable judgment, could materially affect, the
extension of credit by banks or other lending institutions in the
United States;

(5) any significant decrease in the market price of our common stock or in
the market prices of equity securities generally in the United States
or any changes in the general political, market, economic or financial
conditions in the United States or abroad that could have, in our
reasonable judgment, a material adverse effect on our business,
condition (financial or otherwise), income, operations or prospects,
taken as a whole, or on the trading in the shares of our common stock
or on the benefits of the offer to us;

(6) in the case of any of the foregoing existing at the time of the
commencement of the offer, a material acceleration or worsening
thereof; or

(7) any decline in the Nasdaq Composite Index by an amount in excess of
10% measured from the close of business on November 9, 2000.

- a tender or exchange offer for any or all of our shares (other than this
offer), or any merger, acquisition proposal, business combination or
other similar transaction with or involving us has been proposed,
announced or made by any person or has been publicly disclosed;

We learn that:

(1) any entity, "group" (as that term is used in Section 13(d)(3) of
the Exchange Act) or person has acquired or proposes to acquire
beneficial ownership of more than 5% of our outstanding shares,
whether through the acquisition of stock, the formation of a
group, the grant of any
20
<PAGE> 23

option or right, or otherwise (other than as and to the extent disclosed in a
Schedule 13D or Schedule 13G filed with the SEC on or before November 9, 2000);
or

(2) any entity, group or person who has filed a Schedule 13D or
Schedule 13G with the SEC on or before November 9, 2000 has
acquired or proposes to acquire, whether through the acquisition
of stock, the formation of a group, the grant of any option or
right, or otherwise, beneficial ownership of an additional 2% or
more of our outstanding shares.

- any person, entity or group has filed a Notification and Report Form
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, reflecting an intent to acquire us or any of our shares of
common stock, or has made a public announcement reflecting an intent to
acquire us or any of our assets or securities; or

- any change or changes have occurred or are threatened in our business,
condition (financial or otherwise), assets, income, operations, prospects
or stock ownership that, in our reasonable judgment, is or may be
material to us; or

- we determine that the consummation of the offer and the purchase of the
shares may cause our common stock to be delisted from The Nasdaq Stock
Market or to be eligible for deregistration under the Exchange Act.

The conditions referred to above are for our sole benefit and may be
asserted by us regardless of the circumstances (including any action or omission
to act by us) giving rise to any condition, and may be waived by us, in whole or
in part, at any time and from time to time in our sole discretion. Our failure
at any time to exercise any of the foregoing rights will not be deemed a waiver
of any right, and each such right will be deemed an ongoing right that may be
asserted at any time and from time to time. In certain circumstances, if we
waive any of the conditions described above, we may be required to extend the
Expiration Date. Any determination by us concerning the events described above
will be final and binding on all parties.

21
<PAGE> 24

8. PRICE RANGE OF SHARES; DIVIDENDS; RIGHTS PLAN.

Our common stock is listed for trading on The Nasdaq Stock Market under the
symbol "WLHN". It began trading in 1971 following our initial public offering.
The following table sets forth, for the fiscal quarters indicated, the high and
low sales prices per share as reported on The Nasdaq Stock Market and the cash
dividends paid per share in each fiscal quarter.

<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
------- ------- ---------
<S> <C> <C> <C>
1998
First quarter............................................. $14 $11 $.07
Second quarter............................................ 13 1/2 11 .07
Third quarter............................................. 13 1/2 11 .07
Fourth quarter............................................ 13 5/8 8 3/8 .07

1999
First quarter............................................. 13 12 1/4 .07
Second quarter............................................ 12 7/8 10 3/4 .07
Third quarter............................................. 13 3/4 12 1/4 .07
Fourth quarter............................................ 13 3/16 11 5/8 .07

2000
First quarter............................................. 13.875 11.00 .07
Second quarter............................................ 11.438 8.50 .07
Third quarter............................................. 12.156 8.125 .07
Fourth quarter (through November 8, 2000)................. 10.313 8.00 (1)
</TABLE>

On November 8, 2000, the last full trading day before the announcement of
the offer, the last reported sale price of the shares as reported on The Nasdaq
Stock Market was $8.141. We urge shareholders to obtain current market
quotations for the shares.

(1) At a meeting of the Board of Directors of Wolohan held on November 3,
2000, the Board of Directors declared a regular quarterly dividend of $.07 per
share payable on January 2, 2001 to shareholders of record on December 1, 2000.
Shareholders tendering shares pursuant to the offer will continue to be
shareholders of record until the shares are purchased in the offer. Accordingly,
if you are the record holder on the record date, tendering your shares will NOT
prevent you from receiving the dividend because no shares will be purchased in
the offer until after December 15, 2000.

Rights Plan. In February 2000, our Board of Directors adopted a
shareholder rights plan to replace a rights plan which expired on February 15,
2000, pursuant to which we declared a dividend of one common stock purchase
right for each share of our common stock outstanding. One right attaches to each
share of our common stock, and, when exercisable, each right will entitle the
registered holder to purchase from us shares of common stock at a price of
$50.00, subject to adjustment.

In general, the rights become exercisable or transferable only upon the
occurrence of certain events relating to the acquisition by any person or group,
other than us or the Wolohan Family Trust, of beneficial ownership of 20% or
more of the aggregate voting power represented by our outstanding securities or
the commencement of a tender offer to acquire such beneficial ownership or if a
person is deemed to be an "adverse person" (as defined in the shareholder rights
plan) by the Board of Directors. The rights will expire on February 15, 2010,
subject to our right to extend the date, unless earlier redeemed or exchanged by
us or terminated. The rights may be redeemed in whole, but not in part, at a
price of $.01 per right by the Board of Directors at any time before the time a
person crosses the beneficial ownership threshold.

The common stock purchase rights are not currently exercisable and trade
together with shares of our common stock. Absent circumstances causing the
rights to become exercisable or separately tradable prior to the Expiration
Date, the tender of any shares pursuant to the offer will include the tender of
the associated rights. No separate consideration will be paid for the rights.
Upon the purchase of shares by us pursuant to this

22
<PAGE> 25

offer, the sellers of the shares purchased will no longer own the common stock
purchase rights associated with the purchased shares.

The foregoing description of the common stock purchase rights is qualified
in its entirety by reference to the form of the Rights Agreement, a copy of
which has been filed as an exhibit to a Form 8-K dated February 4, 2000. This
exhibit may be obtained from the SEC in the manner provided in Section 11.

9. INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS;
TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES.

As of November 9, 2000, we had 4,577,260 issued and outstanding shares and
475,994 shares reserved for issuance as performance shares and upon exercise of
outstanding stock options. The 1,500,000 shares that we are offering to purchase
hereunder represent approximately 33% of the shares outstanding on November 9,
2000.

Each of our executive officers and directors has advised us that he does
not intend to tender any shares pursuant to our offer, except for one officer.
See Section 2.

The following sets forth as of November 9, 2000, the number of shares
beneficially owned by each director and executive officer and all directors and
executive officers as a group.

<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OUTSTANDING
NAME POSITION OF SHARES(1) SHARES
---- -------- ------------ -------------
<S> <C> <C> <C>
Hugo E. Braun, Jr. Director 13,470(2) *
Leo B. Corwin Director 6,000(2) *
David G. Honaman Senior Vice President, Secretary and
Chief Financial Officer 57,364(3) 1.25
Curtis J. LeMaster Senior Vice President and Chief
Information Officer 13,000(3) *
Daniel P. Rogers Senior Vice President and General
Merchandise Manager 7,000(3) *
Lee A. Shobe Director 7,500(2) *
John A. Sieggreen Executive Vice President, Chief
Operating Officer and Director 22,020(3)
Charles R. Weeks Director 6,000(2) *
James L. Wolohan Chairman of the Board, President,
Chief Executive Officer and Director 1,570,850(4) 34.32
All Directors and Executive Officers as a Group (9 persons) 1,703,204(5) 37.21
</TABLE>

-------------------------
* Less than one percent

(1) The number of shares shown in the table does not include 9,498 shares owned
by spouses and children where beneficial ownership is disclaimed and does
not include any shares held in the Long-Term Incentive Plans.

(2) The number of shares shown in the table includes shares which the following
directors have the right to acquire upon the exercise of stock options
granted under the Stock Option Plan for Non-Employee Directors: Hugo E.
Braun, Jr., Leo B. Corwin, Lee A. Shobe and Charles R. Weeks, 5,000 shares
each.

(3) The number of shares shown in the table includes shares issuable upon the
exercise of stock options within 60 days of November 9, 2000 for the
following executive officers: David G. Honaman -- 26,000 shares, Curtis J.
LeMaster -- 13,000 shares, Daniel P. Rogers -- 7,000 shares, and John A.
Sieggreen -- 22,000 shares.

(4) The number of shares shown in the table as beneficially owned by James L.
Wolohan includes 70,506 shares which he owns in his own name, 60,000 shares
issuable upon the exercise of stock options within 60 days of November 9,
2000, 1,573 shares which he holds as custodian and 1,438,771 shares which he
holds with Michael J. Wolohan as Co-Trustee of the Wolohan Family Trust.

23
<PAGE> 26

(5) Includes 1,440,344 shares which directors and officers (including James L.
Wolohan) hold as trustees or in other fiduciary capacities but does not
include shares held by family members in their own right or in other trusts
for the benefit of family members where beneficial ownership is disclaimed
by the director or officer.

Based on our records and on information provided to us by our directors,
executive officers, we have not, and to the best of our knowledge, none of our
directors or executive officers have effected any transactions involving our
shares of common stock during the 60 days prior to November 9, 2000, except as
follows: On September 22, 2000, James L. Wolohan, John A. Sieggreen and Daniel
P. Rogers were each granted stock options to purchase 50,000 shares of common
stock at an option price of $10 1/16 per share. The options do not vest for a
period of thirty-six months from date of grant or an earlier change of control.
Of the options granted, 25,000 shares as to each officer are subject to
shareholder approval at the 2001 annual meeting of an amendment to the 1991 Long
Term Incentive Plan increasing the number of shares issuable thereunder.

As of November 9, 2000, no person was known by us to be the beneficial
owner of more than 5% of our outstanding stock, except as follows: Michael J.
Wolohan and James L. Wolohan as Trustees of the Wolohan Family Trust own
1,438,771 shares or 31.43% of the outstanding shares and Timothy W. and Georgine
Wolohan own collectively 266,953 shares or 5.83% of the outstanding shares. In
addition, James L. Wolohan may be deemed the beneficial owner of an additional
132,079 shares or 2.89% of the outstanding shares. We understand from public
available reports to the Securities and Exchange Commission that Franklin
Resources, Inc., 777 Mariners Island Boulevard, San Mateo, California 94404 may
be deemed to own 644,000 shares or 14.07% of the outstanding shares and that
Dimensional Fund Advisors, Inc., 1299 Ocean Avenue, Santa Monica, California
90401 may be deemed to own 427,926 shares or 9.35% of the outstanding shares. If
we purchase 1,500,000 shares pursuant to the offer, assuming no shares
beneficially owned by the Wolohan Family Trust, Timothy W. and Georgine Wolohan,
Franklin Resources, Inc. and Dimensional Fund Advisors, Inc. are tendered in the
offer, the Wolohan Family Trust might be deemed to own 46.76% of the outstanding
shares, Timothy W. and Georgine Wolohan might be deemed to own 8.68% of the
outstanding shares, Franklin Resources, Inc. might be deemed to own 20.9% of the
outstanding shares and Dimensional Fund Advisors, Inc. might be deemed to own
13.9% of the outstanding shares. Pursuant to the shareholders rights agreement,
any deemed increase in the share ownership of the Wolohan Family Trust or the
two institutional investors as a result of the offer will not cause the common
stock purchase rights under the shareholders rights agreement to become
exercisable. See Section 8.

Except as otherwise described in this Offer to Purchase, neither we nor, to
the best of our knowledge, any of our directors or executive officers, is a
party to any contract, arrangement, understanding or relationship with any other
person relating, directly or indirectly, to the offer or with respect to any of
our securities, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of the
securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss or the giving or withholding of
proxies, consents or authorizations.

10. SOURCE AND AMOUNT OF FUNDS.

Assuming we purchase 1,500,000 shares pursuant to this offer at the maximum
specified purchase price of $12.00 per share, we expect the maximum aggregate
cost, including all fees and expenses applicable to the offer, will be
approximately $18,300,000. We intend to fund the purchase price for the shares
pursuant to the offer and the payment of related fees and expenses from our cash
on hand.

11. CERTAIN INFORMATION CONCERNING US.

We are a full-line retailer of lumber, building materials and related
products used primarily for new-home construction and home-improvement projects.

We were founded in 1964 with three stores and at November 9, 2000 40 stores
were in operation under the names Wolohan Lumber and CML. Each store provides a
strong offering of quality materials, competitive prices and expert and personal
service. Each location includes a retail sales area (with most stores having
significant square footage devoted to displays of kitchens, baths, doors and
windows and other building
24
<PAGE> 27

materials), under-roof storage areas and an outside lumberyard area with
displays of pole barns, garages, decks and storage buildings. In addition, we
have one truss plant, a specialty millwork operation, two wall-panel facilities
and several stores with door-assembly capabilities.

Our primary customer focus is the professional builder and large
project-oriented consumers. We offer a wide range of services including house
design, delivery, installation, various financing options and job-site
contractor sales representatives with experienced store support coordination.

We are headquartered at 1740 Midland Road, Saginaw, Michigan 48603. Our
telephone number is (517) 793-4532.

On September 22, 2000, we issued the following news release.

"SAGINAW, Mich., September 22, 2000 -- Wolohan Lumber Co. (Nasdaq:NNM:WLHN)
announced the closure and redeployment of assets at four store locations. The
locations include Milan and Portsmouth, Ohio, Muncie, Ind., and South Haven,
Mich.

"Redeployment of these assets will allow us to place a greater focus on our
core markets and move along the course identified in our strategic plan," said
James L. Wolohan, President and Chief Executive Officer. "The Company's target
customer focus is the professional builder and the large project-oriented
consumer," he noted. "The locations did not have a strong presence in this
customer market segment and did not meet the financial objectives identified in
our strategic profit model," said Mr. Wolohan.

Third-quarter results for the Company will include the financial impact of
asset liquidations, inventory adjustments, and the accrual of future fixed costs
associated with the four closures, plus the impact of the consolidation of two
stores into one location in Dayton, Ohio (the latter event occurred in July,
2000). The estimated pretax charge will be $1.1 million (14 cents per share,
after tax).

These asset redeployments will continue to improve the Company's already
strong balance sheet. The Company has a liquidity position (cash and short-term
investments) of approximately $18 million. It has reduced long-term debt
(including the portion due in one year) to $12.6 million, less than 10 percent
of total assets. The Company has also repurchased 2.3 million shares of its
common stock since January 1, 1998 at an average price of $12.04 per share.

"The Company's strategic direction for the immediate future continues to
be: (1) revenue growth and operating improvement at existing stores through the
advancement of services to our target customers and development of better
operating efficiencies, and (2) strengthening our balance sheet by improving
working capital management of existing operations and redeploying investments
that do not meet our strategic profit model," Mr. Wolohan said. The Company has
consistently utilized its strategic profit model to evaluate overall performance
of its assets and will continue to do so going forward. This may result in
additional store closings or other asset redeployments.

After giving effect to the store closures, the Company will have 42
locations operating under the names of Wolohan Lumber and CML (the operating
name of Central Michigan Lumber, acquired by the Company in June, 1998).

Safe Harbor For Forward-Looking Statements

Statements contained herein which are not historical facts are
forward-looking statements within the meaning of the Securities Act of 1933 and
the Securities Exchange Act of 1934 which are intended to be covered by the safe
harbors created thereby. For a summary of important facts which could cause the
Company's actual results to differ materially from those included in, or
inferred by, the forward-looking statements, refer to the Company's Form 10-K
and other documents, which are on file with the Securities and Exchange
Commission."

Subsequent to the issuance of the press release, we closed two additional
stores in Columbus and Elkhart, Indiana.

25
<PAGE> 28

Financial information for the two years ended December 25, 1999 is
contained in our Annual Report on Form 10-K for the year ended December 25, 1999
(the "1999 Annual Report") and financial information for the quarter ended
September 23, 2000 is hereinafter set forth and is also contained in our
Quarterly Report on Form 10-Q for the quarter ended September 23, 2000 (the
"Third Quarter Report"), each of which is hereby incorporated herein by
reference.

The following information is derived from the Third Quarter Report. For a
more complete description of Wolohan's actual results, please refer to the Third
Quarter Report.

26
<PAGE> 29

WOLOHAN LUMBER CO.
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
SEPT. 23, DEC. 25,
2000 1999
--------- --------
(UNAUDITED) (NOTE)
(IN THOUSANDS)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents................................. $ 19,692 $ 3,217
Trade receivables, net.................................... 27,634 33,741
Builder Finance Program receivables....................... 1,827 5,220
Inventories -- at average cost............................ 37,488 48,796
Reduction to LIFO cost.................................... (11,543) (12,943)
-------- --------
Inventories at the lower of LIFO cost or market........... 25,945 35,853
Other current accounts.................................... 3,154 5,385
-------- --------
TOTAL CURRENT ASSETS........................................ 78,252 83,416
NET PROPERTIES.............................................. 38,091 43,344
OTHER ASSETS................................................ 16,342 13,886
-------- --------
TOTAL ASSETS................................................ $132,685 $140,646
======== ========
LIABILITIES AND SHAREOWNERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable.................................... $ 12,746 $ 12,467
Employee compensation and accrued expenses................ 12,085 14,458
Short-term bank borrowings................................ 2,500 --
Current portion of long-term debt......................... 4,179 4,189
-------- --------
TOTAL CURRENT LIABILITIES................................... 31,510 31,114
LONG-TERM DEBT, less current portion........................ 8,449 12,593
-------- --------
TOTAL LIABILITIES........................................... 39,959 43,707
SHAREOWNERS' EQUITY
Common stock.............................................. 4,616 5,031
Additional capital........................................ -- 673
Retained earnings......................................... 88,110 91,235
-------- --------
TOTAL SHAREOWNERS' EQUITY................................... 92,726 96,939
-------- --------
TOTAL LIABILITIES AND SHAREOWNERS' EQUITY................... $132,685 $140,646
======== ========
</TABLE>

Note: The consolidated balance sheet at December 25, 1999, has been derived
from the audited financial statements at that date but does not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.

27
<PAGE> 30

WOLOHAN LUMBER CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
---------------------- ----------------------
SEPT. 23, SEPT. 25, SEPT. 23, SEPT. 25,
2000 1999 2000 1999
--------- --------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
NET SALES............................................ $90,321 $118,727 $248,174 $309,289
Cost of sales........................................ 68,788 91,713 189,281 238,776
------- -------- -------- --------
Gross profit......................................... 21,533 27,014 58,893 70,513
Other operating income............................... 849 1,054 2,492 2,724
------- -------- -------- --------
Total operating income............................. 22,382 28,068 61,385 73,237
OPERATING EXPENSES:
Selling, general and administrative................ 17,588 21,114 52,041 60,032
Store closing costs................................ 1,138 -- 1,623 --
Depreciation and amortization...................... 1,799 1,798 5,423 5,296
------- -------- -------- --------
Total operating expenses........................... 20,525 22,912 59,087 65,328
------- -------- -------- --------
INCOME FROM OPERATIONS............................... 1,857 5,156 2,298 7,909
OTHER INCOME (EXPENSES):
Interest expense................................... (267) (365) (796) (1,160)
Interest income.................................... 207 65 407 203
Gain on sale of properties......................... -- 1,035 312 2,716
------- -------- -------- --------
Other income, net.................................. (60) 735 (77) 1,759
------- -------- -------- --------
INCOME BEFORE INCOME TAXES........................... 1,797 5,891 2,221 9,668
Income taxes......................................... 712 2,283 880 3,777
------- -------- -------- --------
NET INCOME........................................... $ 1,085 $ 3,608 $ 1,341 $ 5,891
======= ======== ======== ========
Average shares outstanding........................... 4,680 5,269 4,830 5,331
Net income per share, basic.......................... $ 0.23 $ 0.68 $ 0.28 $ 1.11
Net income per share, assuming dilution.............. $ 0.22 $ 0.67 $ 0.27 $ 1.09
Dividends per share.................................. $ 0.07 $ 0.07 $ 0.21 $ 0.21
</TABLE>

28
<PAGE> 31

WOLOHAN LUMBER CO.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
----------------------
SEPT. 23, SEPT. 25,
2000 1999
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Net income.................................................. $ 1,341 $ 5,891
Adjustments to reconcile net income to cash provided by
(used in) operating activities:
Depreciation.............................................. 5,194 5,090
Amortization.............................................. 229 206
Provision for losses on accounts receivable............... 744 149
Gain on sale of properties................................ (312) (2,716)
Changes in operating assets & liabilities net of effects
in 1999 of sale of stores to Stock Lumber
Accounts receivable.................................... 5,363 (2,778)
Builder Finance Program receivables.................... 3,393 (3,490)
Other assets........................................... 1,992 1,527
Inventories............................................ 9,908 (8,021)
Accounts payable & accrued expenses.................... (1,783) (100)
------- -------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES......... 26,069 (4,242)
------- -------
INVESTING ACTIVITIES
Additions to properties..................................... (4,053) (6,336)
Proceeds from sale of stores to Stock Lumber................ -- 9,956
Proceeds from the sale of properties........................ 1,825 6,781
------- -------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES......... (2,228) 10,401
------- -------
FINANCING ACTIVITIES
Net credit lines borrowings (repayments).................... 2,500 --
Payments on long-term debt.................................. (4,154) (4,023)
Repurchase of common stock.................................. (4,702) (4,068)
Dividends paid.............................................. (1,010) (1,116)
------- -------
NET CASH USED IN FINANCING ACTIVITIES....................... (7,366) (9,207)
------- -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS............ 16,475 (3,048)
Cash and cash equivalents at beginning of period............ 3,217 3,166
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD.................. $19,692 $ 118
======= =======
</TABLE>

29
<PAGE> 32

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.

RESULTS OF OPERATIONS

Net income was $1.1 million (23 cents per share) for fiscal third-quarter
2000, compared with $3.6 million (68 cents per share) for the third quarter of
1999. The decline in net income for the quarter ended September 23, compared
with the third quarter of the prior year reflects: (1) $1.9 million in operating
losses (inclusive of store closing costs) associated with seven discontinued
stores in 2000. In 1999, the impact from discontinued stores was negligible. (2)
Gross margin dollars benefited from a $1.5 million LIFO credit in 2000 compared
with a decrease in gross margin dollars from a LIFO charge of $218,000 in 1999.
(3) $1.0 million in non-operating gains from the sale of real estate properties
recorded in 1999.

The decline in year-to-date net income for the period ended September 23,
compared with the same period in 1999 reflects: (1) $2.8 million in operating
losses (inclusive of store closing costs) associated with seven discontinued
stores in 2000. In 1999, $749,000 in operating losses were incurred from
discontinued stores. (2) Gross margin dollars benefited from a $1.5 million LIFO
credit in 2000 compared with a decrease in gross margin dollars from a LIFO
charge of $448,000 in 1999. (3) $312,000 in non-operating gains from the sale of
real estate properties in 2000, compared with $2.7 million in such gains in
1999.

Sales totaled $90.3 million for fiscal third-quarter 2000, falling 23.9
percent from fiscal third-quarter 1999 sales of $118.7 million. Sales for
comparable stores declined 18.5 percent in the third quarter of 2000 from the
third quarter of 1999. Sales for the nine-month period ended September 23, 2000
were $248.2 million, a 19.8 percent decrease from the corresponding period a
year earlier. Sales for comparable stores declined 15.3 percent for the 2000
nine-month period from the same period in 1999. The sales decline in both the
third quarter and nine-month period was due, in part, to significant price
deflation in lumber and structural panel products (the Company estimates that
sales were approximately 9 percent lower for the third quarter and 2 percent
lower for the nine-month period due to the lower selling prices of these
lumber-related products), an overall slowdown of housing and other construction
activity for the industry in general and the Company's decision to reduce or
eliminate certain product categories which are inconsistent with the Company's
long-term strategies.

Gross margins for the third-quarter and nine-month period of 2000 were 23.8
percent and 23.7 percent, respectively, 100 basis points higher than 1999's
third quarter and 90 basis points higher than the nine-month period of 1999.
Gross margins in the third quarter and nine-month period of 2000 benefited from
a $1.5 million LIFO credit, compared with a decrease from a LIFO charge of
$218,000 and $448,000, respectively, for the corresponding periods of 1999. The
LIFO credit reflects the price deflation in certain commodity products and lower
inventory levels.

Store closing costs related to the seven discontinued stores in 2000
totaled $1.7 million for the third quarter of 2000 and $2.2 million for the
nine-month period. There were no store closing costs for the similar periods in
1999. A portion of the closing costs ($.6 million) in the third quarter and
nine-month period was a charge to cost of sales. The closing costs in 2000 were
primarily related to liquidating inventories, writing down of certain owned real
property, expensing a portion of future lease payments and writing off leasehold
improvements for the one leased store and absorbing certain other on-going fixed
costs.

FINANCIAL CONDITION

At September 23, 2000, the Company's balance sheet remained strong. Net
working capital at September 23, 2000, totaled $46.7 million, compared with
$52.3 million at December 25, 1999. The current ratio at September 23, 2000, was
2.5 to 1, compared with 2.7 to 1 at December 25, 1999.

Cash and cash equivalents less short term debt were $17.2 million at
September 23, 2000, compared with $3.2 million at December 25, 1999. The
liquidity ratio at September 23, 2000, was .62 to 1, compared with .1 to 1 at
December 25, 1999. Cash and cash equivalents increased $16.5 million during the
first nine months of 2000. Operating activities provided net cash of $26.1
million in the first nine months of 2000, primarily from reductions in accounts
receivable, Builder Finance Program receivables, other assets and inventories
plus

30
<PAGE> 33

depreciation. Investing activities in the nine months of 2000 included $4.1
million of additions to properties and offset, in part, by $1.8 million of
proceeds from the sale of fixed assets (primarily closed facilities). Financing
activities in the nine months of 2000 used net cash of $7.4 million and included
$4.2 million for payments on long-term debt, $4.7 million for the purchase of
426,000 shares of Company common stock at an average price of $11.04 per share
(which included 102,000 shares in the third quarter at an average price per
share of $10.60), $1.0 million for dividend payments and net borrowings of $2.5
million under the Company's credit lines.

The Company expects that net cash from operating activities and available
lines of credit should be adequate to meet future working capital needs.

OUTLOOK

The Company expects revenues to continue to lag behind last year's levels
for the remainder of the year. Factors contributing to lower sales expectations
include lower demand for housing, significantly lower prices for commodity wood
products and the impact of store closings. In addition, as the Company moves its
strategic focus to professional builders and large project-oriented consumers,
it will continue to eliminate or reduce certain products previously sold to the
do-it-yourself home improvement market, which in turn, will continue to have a
negative impact on sales comparisons. Given these factors, the Company will
focus on improving market share to its target customers.

Where You Can Find More Information. We are subject to the informational
filing requirements of the Exchange Act, and, accordingly, are obligated to file
reports, statements and other information with the SEC relating to our business,
financial condition and other matters. Information, as of particular dates,
concerning our directors and officers, their remuneration, options granted to
them, the principal holders of our securities and any material interest of these
persons in transactions with us is required to be disclosed in proxy statements
distributed to our shareholders and filed with the SEC. We also have filed an
Issuer Tender Offer Statement on Schedule TO with the SEC that includes
additional information relating to the offer. These reports, statements and
other information can be inspected and copied at the public reference facilities
maintained by the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549; and at its regional offices located at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and 7 World Trade Center, 13th Floor, New York,
New York 10048. Copies of this material may also be obtained by mail, upon
payment of the SEC's customary charges, from the Public Reference Section of the
SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The SEC
also maintains a web site on the Internet at http://www.sec.gov that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the SEC.

Incorporation by Reference. The rules of the SEC allow us to "incorporate
by reference" information into this document, which means that we can disclose
important information to you by referring you to another document filed
separately with the SEC. These documents contain important information about us.

<TABLE>
<CAPTION>
SEC FILINGS (FILE NO. 0-6169) PERIOD OR DATE FILED
----------------------------- --------------------
<S> <C>
Annual Report on Form 10-K Year ended December 25, 1999
Quarterly Reports on Form 10-Q Quarter ended March 25, 2000
Quarter ended June 24, 2000
Quarter ended September 23, 2000
Reports on Form 8-K Report dated February 4, 2000
</TABLE>

We incorporate by reference these documents and any additional documents
that we may file with the SEC between the date of this offer and the date of
expiration of withdrawal rights. Those documents include periodic reports, such
as annual reports on Form 10-K, quarterly reports on Form 10-Q and current
reports on Form 8-K, as well as proxy statements.

You can obtain any of the documents incorporated by reference in this
document from us or from the SEC's web site at the address described above.
Documents incorporated by reference are available from us

31
<PAGE> 34

without charge, excluding any exhibits to those documents. You can obtain
documents incorporated by reference in this Offer to Purchase by requesting them
in writing or by telephone from us at 1740 Midland Road, Saginaw, Michigan
48603, telephone: (517) 793-4532. Please be sure to include your complete name
and address in your request. If you request any incorporated documents, we will
mail them to you by first class mail, or another equally prompt means, within
one business day after we receive your request.

12. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES;
REGISTRATION UNDER THE EXCHANGE ACT.

Our purchase of shares pursuant to the offer will reduce the number of
shares that might otherwise trade publicly and is likely to reduce the number of
shareholders. Nonetheless, we anticipate that there will be a sufficient number
of shares outstanding and publicly traded following consummation of the offer to
ensure a continued trading market for the shares. Based upon published
guidelines of The Nasdaq Stock Market, we do not believe that our purchase of
shares pursuant to the offer will cause our remaining shares to be delisted from
The Nasdaq Stock Market.

Our shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit to their customers using the shares as collateral. We believe
that, following the purchase of shares pursuant to the offer, the shares will
continue to be "margin securities" for purposes of the Federal Reserve Board's
margin regulations.

Our shares are registered under the Exchange Act, which requires, among
other things, that we furnish information to our shareholders and to the SEC and
comply with the SEC's proxy rules in connection with meetings of our
shareholders. We believe that our purchase of shares pursuant to the offer will
not result in the shares becoming eligible for deregistration under the Exchange
Act.

13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.

We are not aware of any license or regulatory permit material to our
business that might be adversely affected by our acquisition of shares as
contemplated in this offer or 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 our acquisition or ownership of shares as
contemplated by this offer. Should any approval or other action be required, we
currently contemplate that we will seek that approval or other action. We cannot
predict whether we will be required to delay the acceptance for payment of or
payment for shares tendered pursuant to the offer pending the outcome of any
such matter. There can be no assurance that any approval or other action, if
needed, would be obtained or would be obtained without substantial conditions or
that the failure to obtain the approval or other action might not result in
adverse consequences to our business. Our obligations under the offer to accept
for payment and pay for shares are subject to conditions. See Section 7.

14. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.

The following summary describes in general terms the principal United
States federal income tax consequences to United States Holders (as defined
below) of an exchange of shares for cash pursuant to the offer. Those
shareholders who do not participate in the exchange should not incur any United
States federal income tax liability from the exchange. This summary is based
upon the Internal Revenue Code of 1986, as amended to the date of this offer
(the "Code"), existing and proposed United States Treasury Regulations
promulgated under the Code, published rulings, administrative pronouncements and
judicial decisions, changes to which could affect the tax consequences described
in this offer (possibly on a retroactive basis).

This summary addresses only shares held as capital assets. It does not
address all of the tax consequences that may be relevant to particular
shareholders because of their personal circumstances, or to other types of
shareholders (such as certain financial institutions, traders in securities that
elect mark to market, dealers or traders in securities or commodities, insurance
companies, "S" corporations, expatriates, tax-exempt organizations,
tax-qualified retirement plans, Non-United States Holders (as defined below),
persons who are subject to alternative minimum tax, or persons who hold shares
as a position in a "straddle" or as part of a "hedging" or "conversion"
transaction or that have a functional currency other than the United States
dollar). This
32
<PAGE> 35

summary may not be applicable with respect to shares acquired as compensation
(including shares acquired upon the exercise of stock options or which were or
are subject to forfeiture restrictions) or shares acquired under a tax-qualified
retirement plan. This summary also does not address the state, local or foreign
tax consequences of participating in the offer.

You should consult your tax advisor as to the particular consequences to
you of participating in this offer.

A "United States Holder" is a holder of shares that for United States
federal income tax purposes is:

- a citizen or resident of the United States;

- a corporation (or other entity taxable as a corporation) created or
organized in or under the laws of the United States or any State or the
District of Columbia;

- unless otherwise provided by applicable Treasury Department regulations,
an entity taxable as a partnership that is created or organized in or
under the laws of the United States or any State or the District of
Columbia;

- an estate the income of which is subject to United States federal income
taxation regardless of its source; or

- a trust (a) the administration over which a United States court can
exercise primary supervision and (b) all of the substantial decisions of
which one or more United States persons have the authority to control and
certain other trusts considered United States Holders for federal income
tax purposes.

A "Non-United States Holder" is a holder of shares other than a United
States Holder.

An exchange of shares for cash pursuant to the offer will be a taxable
event. A United States Holder participating in the exchange will be treated
either as having sold shares or as having received a dividend distribution from
Wolohan. A United States Holder's exchange of shares for cash pursuant to the
offer will be treated as a dividend to the extent of Wolohan's current or
accumulated earnings and profits as determined under federal income tax
principles, unless the exchange:

- results in a "complete termination" of the holder's stock interest in
Wolohan under section 302(b)(3) of the Code;

- is a "substantially disproportionate" redemption with respect to the
holder under section 302(b)(2) of the Code; or

- is "not essentially equivalent to a dividend" with respect to the holder
under section 302(b)(1) of the Code.

In determining whether any of these tests have been met, a United States
Holder must take into account not only shares it actually owns, but also shares
it constructively owns within the meaning of section 318 of the Code.

A distribution to a shareholder is "not essentially equivalent to a
dividend" if it results in a "meaningful reduction" in the shareholder's stock
interest in Wolohan. If, as a result of an exchange of shares for cash pursuant
to the offer, a United States Holder of shares whose relative stock interest in
Wolohan is minimal and who exercises no control over corporate affairs suffers a
reduction in its proportionate percentage interest in Wolohan stock (including
any ownership of shares constructively owned), that United States Holder should
generally be regarded as having suffered a meaningful reduction in its interest
in Wolohan. No firm quantitative guidance has been issued by the IRS for
determining the level at which a United States Holder's relative stock interest
will be deemed "minimal". Satisfaction of the "complete termination" and
"substantially disproportionate" exceptions is dependent upon compliance with
the respective objective tests set forth in section 302(b)(3) and section
302(b)(2) of the Code. A distribution to a shareholder will result in a
"complete termination" if either (1) all of the shares actually and
constructively owned by the shareholder are exchanged pursuant to the offer or
(2) all of the shares actually owned by the shareholder are exchanged pursuant
to the offer and the shareholder is eligible to waive, and effectively waives,
the attribution of shares constructively owned by the shareholder in accordance
with the procedures described in section 302(c)(2) of
33
<PAGE> 36

the Code. A distribution to a shareholder will be "substantially
disproportionate" if a shareholder owns actually and constructively less than
50% of the total combined voting power of all classes of stock entitled to vote
and if the percentage of the outstanding shares actually and constructively
owned by the shareholder immediately following the exchange of shares pursuant
to the offer (treating shares exchanged pursuant to the offer as outstanding) is
less than 80% of the percentage of the outstanding shares actually and
constructively owned by the shareholder immediately before the exchange
(treating shares exchanged pursuant to the offer as outstanding).

Contemporaneous dispositions or acquisitions of shares by a shareholder or
related individuals or entities may be deemed to be part of a single integrated
transaction and may be taken into account in determining whether any of the
three tests under section 302(b) of the Code has been satisfied. Each
shareholder should be aware that because proration may occur in the offer, even
if all the shares actually and constructively owned by a shareholder are
tendered pursuant to the offer, fewer than all of such shares may be purchased
by us. Thus, proration may affect whether the surrender by a shareholder
pursuant to the offer will meet any of the three tests under section 302 of the
Code.

If an exchange of shares for cash by a United States Holder pursuant to the
offer is not treated as a distribution taxable as a dividend, the holder will
recognize capital gain or loss equal to the difference between the amount of
cash received and the holder's adjusted tax basis in the shares and in the
associated common stock purchase rights, if any, tendered to Wolohan, except to
the extent that the amount of cash received includes dividends that have been
declared by the Board of Directors of Wolohan before the exchange. The gain or
loss would be long-term capital gain or loss if the holding period for the
shares exceeded one year. In the case of a United States Holder that is an
individual, trust or estate, the maximum rate of United States federal income
tax applicable to net capital gain on shares held for more than one year is 20%.

Under the "wash sale" rules under the Code, loss recognized on Wolohan
shares sold pursuant to the offer will be disallowed to the extent the United
States Holder acquires Wolohan shares within 30 days before or after the date
the shares are purchased pursuant to the offer and, in that event, the basis and
holding period will be adjusted to reflect the disallowed loss.

If the amount received by a United States Holder in the offer is treated as
a distribution that is taxable as a dividend (as opposed to consideration
received in a sale or exchange), the amount of the distribution will be the
amount of cash received by the holder. The amount will be treated as a dividend,
taxable as ordinary income to the United States Holder, to the extent of
Wolohan's current or accumulated earnings and profits as determined under
Federal income tax principles. To the extent, if any, that the amount of the
distribution exceeds Wolohan's current and accumulated earnings and profits, the
excess first will be treated as a return of capital that will reduce the
holder's tax basis in the shares exchanged in the offer. Any remaining amount
after the United States Holder's basis has been reduced to zero will be treated
as a sale or exchange of the shares and be taxable as capital gain. If cash
received by a United States Holder is taxable as a dividend, the United States
Holder's adjusted tax basis in its shares exchanged in the offer generally will
be transferred to any of its remaining stockholdings in Wolohan, subject to, in
the case of corporate shareholders, reduction of basis or possible gain
recognition under section 1059 of the Code in an amount equal to the non-taxed
portion of the dividend. If the United States Holder does not retain any actual
stock ownership in Wolohan (having a stock interest only constructively), the
holder may lose the benefit of the holder's adjusted tax basis in its shares. A
dividend received by a corporate United States Holder may be (1) eligible for a
dividends-received deduction (subject to applicable exceptions and limitations)
and (2) subject to the "extraordinary dividend" provisions of section 1059 of
the Code. Corporate shareholders should consult their own tax advisors regarding
(1) whether a dividends-received deduction will be available to them, and (2)
the possible application of section 1059 to the ownership and disposition of
their shares.

See Section 3 with respect to the application of United States federal
income tax withholding to payments made to Non-United States Holders and the
backup withholding tax requirements.

The tax discussion set forth above is included for general information
only. You are urged to consult your tax advisor to determine the particular tax
consequences to you of the offer, including the applicability and effect of
state, local and foreign tax laws.
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<PAGE> 37

15. EXTENSION OF THE OFFER; TERMINATION; AMENDMENT.

We expressly reserve the right, in our sole discretion, at any time and
from time to time, and regardless of whether or not any of the events set forth
in Section 7 have occurred or are deemed by us to have occurred, to extend the
period of time the offer is open and delay acceptance for payment of, and
payment for, any shares by giving oral or written notice of the extension to the
Depositary and making a public announcement of the extension. We also expressly
reserve the right, in our sole discretion, to terminate the offer and reject for
payment and not pay for any shares not theretofore accepted for payment or paid
for or, subject to applicable law, to postpone payment for shares upon the
occurrence of any of the conditions specified in Section 7 by giving oral or
written notice of the termination or postponement to the Depositary and making a
public announcement of the termination or postponement. Our reservation of the
right to delay payment for shares that we have accepted for payment is limited
by Rule 13e-4(f)(5) under the Exchange Act, which requires that we must pay the
consideration offered or return the shares tendered promptly after termination
or withdrawal of a tender offer. Subject to compliance with applicable law, we
further reserve the right, in our sole discretion, and regardless of whether any
of the events set forth in Section 7 have occurred or are deemed by us to have
occurred, to amend the offer in any respect (including, without limitation, by
decreasing or increasing the consideration offered in the offer to holders of
shares or by decreasing or increasing the number of shares being sought in the
offer). Amendments to the offer may be made at any time and from time to time by
public announcement of the amendment. In the case of an extension, the amendment
must be issued no later than 9:00 a.m., Eastern time, on the first business day
after the last previously scheduled or announced Expiration Date. Any public
announcement made pursuant to the offer will be disseminated promptly to
shareholders in a manner reasonably designed to inform shareholders of the
change. Without limiting the manner in which we may choose to make a public
announcement, except as required by applicable law, we will have no obligation
to publish, advertise or otherwise communicate any public announcement other
than by issuing a press release to the Dow Jones News Service or comparable
service.

If we materially change the terms of the offer or the information
concerning the offer, or if we waive a material condition of the offer, we will
extend the offer to the extent required by Rules 13e-4(d)(2), 13e-4(e)(3) and
13e-4(f)(1) promulgated under the Exchange Act. These rules provide that the
minimum period during which an offer must remain open following material changes
in the terms of the offer or information concerning the offer (other than a
change in price or a change in percentage of securities sought) will depend on
the facts and circumstances, including the relative materiality of the terms or
information. If:

(1) we increase or decrease the price to be paid for shares, materially
increase the Dealer Manager's fee or increase or decrease the number of
shares being sought in the offer and, in the event of an increase in
the number of shares being sought, the increase exceeds 2% of the
outstanding shares of our common stock, and

(2) the offer is scheduled to expire at any time earlier than the
expiration of a period ending on the tenth business day from, and
including, the date that notice of an increase or decrease is first
published, sent or given in the manner specified in this Section 15,

then, in each case, the offer will be extended until the expiration of a period
of ten business days. For purposes of the offer, a "business day" means any day
other than a Saturday, Sunday or Federal holiday and consists of the time period
from 12:01 am through 5:00 p.m., Eastern time.

16. FEES AND EXPENSES.

We have retained U.S. Bancorp Piper Jaffray Inc. ("Piper Jaffray") to act
as our financial advisor, as well as the Dealer Manager, in connection with the
offer. Piper Jaffray will receive, for their services as Dealer Manager, a
customary fee in connection with the offer. We also have agreed to reimburse
Piper Jaffray for reasonable out-of-pocket expenses incurred in connection with
the offer, including reasonable fees and expenses of counsel, and to indemnify
Piper Jaffray against liabilities in connection with the offer, including
liabilities under the federal securities laws.

35
<PAGE> 38

We have retained MacKenzie Partners, Inc. to act as Information Agent and
Registrar and Transfer Company to act as Depositary in connection with the
offer. The Information Agent may contact holders of shares by mail, telephone,
telegraph and personal interviews and may request brokers, dealers and other
nominee shareholders to forward materials relating to the offer to beneficial
owners. The Information Agent and the Depositary will each receive reasonable
and customary compensation for their respective services, will be reimbursed by
us for reasonable out-of-pocket expenses and will be indemnified against certain
liabilities in connection with the offer, including liabilities under the
federal securities laws.

We will not pay any fees or commissions to brokers, dealers or other
persons (other than fees to the Dealer Manager and the Information Agent as
described above) for soliciting tenders of shares pursuant to the offer.
Shareholders holding shares through brokers or banks are urged to consult the
brokers or banks to determine whether transaction costs may apply if
shareholders tender shares through the brokers or banks and not directly to the
Depositary. We will, however, upon request, reimburse brokers, dealers and
commercial banks for customary mailing and handling expenses incurred by them in
forwarding the offer and related materials to the beneficial owners of shares
held by them as a nominee or in a fiduciary capacity. No broker, dealer,
commercial bank or trust company has been authorized to act as our agent or the
agent of, the Dealer Manager, the Information Agent or the Depositary for
purposes of the offer. We will pay or cause to be paid all stock transfer taxes,
if any, on our purchase of shares except as otherwise provided in Instruction 7
in the Letter of Transmittal.

17. MISCELLANEOUS.

We are not aware of any jurisdiction where the making of the offer is not
in compliance with applicable law. If we become aware of any jurisdiction where
the making of the offer or the acceptance of shares pursuant to the offer is not
in compliance with any valid applicable law, we will make a good faith effort to
comply with the applicable law. If, after a good faith effort, we cannot comply
with the applicable law, the offer will not be made to, nor will tenders be
accepted from or on behalf of, the holders of shares residing in that
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the offer to be made by a licensed broker or dealer, the offer will be
deemed to be made on our behalf by the Dealer Manager or one or more registered
brokers or dealers licensed under the laws of the jurisdiction.

Pursuant to Rule 13e-4 promulgated under the Exchange Act, we have filed
with the SEC an Issuer Tender Offer Statement on Schedule TO, which contains
additional information relating to the offer. The Schedule TO, including the
exhibits and any amendments thereto, may be examined, and copies may be
obtained, at the same places and in the same manner set forth in Section 11 with
respect to information concerning us.

Tendering shareholders should rely only on the information contained in
this document or to which we have referred them. We have not authorized anyone
to provide tendering shareholders with information or make any representation on
behalf of us in connection with this offer other than those contained in this
Offer to Purchase or in the related Letter of Transmittal. If given or made,
tendering shareholders should not rely on that information or representation as
having been authorized by us.

WOLOHAN LUMBER CO.

November 9, 2000

36
<PAGE> 39

Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for shares and any other
required documents should be sent or delivered by each shareholder or such
shareholder's broker, dealer, commercial bank, trust company or other nominee to
the Depositary at one of its addresses set forth below.

THE DEPOSITARY FOR THE OFFER IS:

REGISTRAR AND TRANSFER COMPANY

<TABLE>
<S> <C> <C>
By Mail: By Overnight Delivery: By Hand Delivery:
Registrar & Transfer Company Registrar & Transfer Company c/o The Depository Trust Co
10 Commerce Drive 10 Commerce Drive Transfer Agent Drop
Cranford, NJ 07016 Cranford, NJ 07016 55 Water St., 1st Floor
New York, New York 10041-0099
</TABLE>

Facsimile Transmission:

(908) 497-2311

Confirm Receipt of Facsimile by Telephone:

(908) 497-2300 x2526

Tendering shareholders may request additional copies of this offer, the
Letter of Transmittal or the Notice of Guaranteed Delivery and direct questions
and requests for assistance to the Information Agent or Dealer Manager at their
respective addresses and telephone numbers set forth below.

THE INFORMATION AGENT FOR THE OFFER IS:

[MACKENZIE PARTNERS, INC. LOGO]
156 Fifth Avenue
New York, New York 10010
[email protected]
(212) 929-5500 (call collect)
or
Toll-Free (800) 322-2885

THE DEALER MANAGER FOR THE OFFER IS:

U.S. BANCORP PIPER JAFFRAY INC.
800 Nicollet Mall
Minneapolis, MN 55402-7020
(800) 333-6000, Ext. 36352