GERBER PRODUCTS CO, SC 14D1, 1994-05-27

GERBER PRODUCTS CO
SC 14D1, 1994-05-27
CANNED, FROZEN & PRESERVD FRUIT, VEG & FOOD SPECIALTIES

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<PAGE> 1

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14D-1

Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934

GERBER PRODUCTS COMPANY
(Name of Subject Company)

SL Sub Corp. and
Sandoz Ltd.
(Bidder)

Common Stock, $2.50 par value
(including Preferred Stock Purchase Rights
issued with respect thereto)
(Title of Class of Securities)

373712 10 8
(CUSIP Number of Class of Securities)

Robert L. Thompson, Jr., Esq.
Sandoz Corporation
608 Fifth Avenue, 10th Floor
New York, New York 10020
Telephone: (212) 830-2401
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications on Behalf of Bidder)

Copy to:
David W. Heleniak, Esq.
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Telephone: (212) 848-4000

CALCULATION OF FILING FEE

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TRANSACTION VALUATION AMOUNT OF FILING FEE
----------------------------------------------------------------------------
$3,776,099,321* $755,219.86
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</TABLE>

- --- Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
Amount Previously Paid:
Form or Registration No.:
Filing Party:
Date Filed:
- ---------------
* Note: The Transaction Value is calculated by multiplying $53.00, the per share
tender offer price, by 71,247,157, the sum of the number of shares of Common
Stock outstanding and the 1,705,537 shares of Common Stock subject to options
outstanding.
<PAGE> 2

This Tender Offer Statement on Schedule 14D-1 (this "Statement") relates to
the offer by SL Sub Corp., a Delaware corporation ("Purchaser") and an indirect
wholly owned subsidiary of Sandoz Ltd., a corporation organized under the laws
of Switzerland ("Parent"), to purchase all outstanding shares of Common Stock,
par value $2.50 per share (the "Common Stock"), of Gerber Products Company, a
Michigan corporation, and the associated preferred stock purchase rights issued
pursuant to the Rights Agreement, dated as of July 25, 1990, as amended, between
Gerber Products Company and Harris Trust and Savings Bank, as Rights Agent
(together with the Common Stock, the "Shares"), at a price of $53.00 per Share,
net to the seller in cash, upon the terms and subject to the conditions set
forth in Purchaser's Offer to Purchase, dated May 27, 1994 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which together constitute
the "Offer"), copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively.

ITEM 1. SECURITY AND SUBJECT COMPANY.

(a) The name of the subject company is Gerber Products Company, a Michigan
corporation (the "Company"), which has its principal executive offices at 445
State Street, Fremont, Michigan 49413.

(b) The class of equity securities being sought is all the outstanding
shares of Common Stock, par value $2.50 per share, of the Company. The
information set forth in the Introduction and Section 1 ("Terms of the Offer;
Expiration Date") of the Offer to Purchase is incorporated herein by reference.

(c) The information concerning the principal market in which the Shares are
traded and certain high and low sales prices for the Shares in such principal
market set forth in Section 6 ("Price Range of Shares; Dividends") of the Offer
to Purchase is incorporated herein by reference.

ITEM 2. IDENTITY AND BACKGROUND.

(a)-(d) and (g) This Statement is filed by Purchaser and Parent. The
information concerning the name, state or other place of organization, principal
business and address of the principal office of each of Purchaser and Parent,
and the information concerning the name, business address, present principal
occupation or employment and the name, principal business and address of any
corporation or other organization in which such employment or occupation is
conducted, material occupations, positions, offices or employments during the
last five years and citizenship of each of the executive officers and directors
of Purchaser and Parent are set forth in the Introduction, Section 8 ("Certain
Information Concerning Purchaser and Parent") and Schedule I of the Offer to
Purchase and are incorporated herein by reference.

(e) and (f) During the last five years, none of Purchaser or Parent, and,
to the best knowledge of Purchaser and Parent, none of the persons listed in
Schedule I of the Offer to Purchase has been (i) convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding any violation of such
laws.

ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.

(a) The information set forth in Section 8 ("Certain Information Concerning
Purchaser and Parent") is incorporated herein by reference.

(b) The information set forth in the Introduction, Section 7 ("Certain
Information Concerning the Company"), Section 8 ("Certain Information Concerning
Purchaser and Parent"), Section 10 ("Background of the Offer; Contacts with the
Company; the Merger Agreement and the Rights Agreement") and Section 11
("Purpose of the Offer; Plans for the Company After the Offer and the Merger")
of the Offer to Purchase is incorporated herein by reference.

ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

(a)-(c) The information set forth in Section 9 ("Financing of the Offer and
the Merger") of the Offer to Purchase is incorporated herein by reference.

2
<PAGE> 3

ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.

(a)-(e) The information set forth in the Introduction, Section 10
("Background of the Offer; Contacts with the Company; the Merger Agreement and
the Rights Agreement") and Section 11 ("Purpose of the Offer; Plans for the
Company After the Offer and the Merger") of the Offer to Purchase is
incorporated herein by reference.

(f) and (g) The information set forth in Section 13 ("Effect of the Offer
on the Market for the Shares, Exchange Listing and Exchange Act Registration")
of the Offer to Purchase is incorporated herein by reference.

ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

(a) and (b) The information set forth in Section 8 ("Certain Information
Concerning Purchaser and Parent") of the Offer to Purchase is incorporated
herein by reference.

ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.

The information set forth in the Introduction, Section 8 ("Certain
Information Concerning Purchaser and Parent"), Section 10 ("Background of the
Offer; Contacts with the Company; the Merger Agreement and the Rights
Agreement") and Section 11 ("Purpose of the Offer; Plans for the Company After
the Offer and the Merger") of the Offer to Purchase is incorporated herein by
reference.

ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.

The information set forth in the Introduction and Section 16 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.

ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.

The information set forth in Section 8 ("Certain Information Concerning
Purchaser and Parent") of the Offer to Purchase is incorporated herein by
reference.

ITEM 10. ADDITIONAL INFORMATION.

(a) Not applicable.

(b) and (c) The information set forth in Section 15 ("Certain Legal Matters
and Regulatory Approvals") of the Offer to Purchase is incorporated herein by
reference.

(d) Not applicable.

(e) Not applicable.

(f) The information set forth in the Offer to Purchase is incorporated
herein by reference.

ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.

<TABLE>
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(a)(1) Form of Offer to Purchase dated May 27, 1994.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter from Morgan Stanley & Co. Incorporated to Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees.
(a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees to Clients.
</TABLE>

3
<PAGE> 4

<TABLE>
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(a)(6) Form of Letter to Participants in the Dividend Reinvestment Plan of Gerber
Products Company.
(a)(7) Form of Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(8) Summary Advertisement as published in The Wall Street Journal on May 27 1994.
(a)(9) Press Release issued by Parent on May 23, 1994.
(c)(1) Agreement and Plan of Merger, dated as of May 21, 1994, among Parent, Purchaser
and the Company.
(c)(2) Amendment No. 1 to Agreement and Plan of Merger, dated as of May 27, 1994, among
Parent, Purchaser and the Company.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>

4
<PAGE> 5

SIGNATURE

After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct.

May 27, 1994 SL SUB CORP.

By /s/ ROBERT L. THOMPSON, JR.
------------------------------------
Name: Robert L. Thompson, Jr.
Title: Vice President and
Secretary

SANDOZ LTD.

By /s/ MARC MORET
------------------------------------
Name: Marc Moret
Title: Chairman of the Board

By /s/ ROLF W. SCHWEIZER
------------------------------------
Name: Rolf W. Schweizer
Title: Chief Executive Officer

5
<PAGE> 6

EXHIBIT INDEX

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PAGE IN
EXHIBIT SEQUENTIAL
NO. NUMBERING SYSTEM
- ------- ----------------
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(a)(1) Form of Offer to Purchase dated May 27, 1994.........................
(a)(2) Form of Letter of Transmittal........................................
(a)(3) Form of Notice of Guaranteed Delivery................................
(a)(4) Form of Letter from Morgan Stanley & Co. Incorporated to Brokers,
Dealers, Commercial Banks, Trust Companies and Nominees..............
(a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees to Clients....................................
(a)(6) Form of Letter to Participants in the Dividend Reinvestment Plan of
Gerber Products Company..............................................
(a)(7) Form of Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9........................................
(a)(8) Summary Advertisement as published in The Wall Street Journal on
May 27, 1994.........................................................
(a)(9) Press Release issued by Parent on May 23, 1994.......................
(c)(1) Agreement and Plan of Merger, dated as of May 21, 1994, among Parent,
Purchaser and the Company............................................
(c)(2) Amendment No. 1 to Agreement and Plan of Merger, dated as of May 27,
1994, among Parent, Purchaser and the Company........................
</TABLE>

<PAGE> 1

Offer to Purchase for Cash

All Outstanding Shares of Common Stock
(Including the Associated Rights)
of

Gerber Products Company
at

$53.00 Net Per Share
by

SL Sub Corp.
an indirect wholly owned subsidiary
of

Sandoz Ltd.
------------------------

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
THURSDAY, JUNE 30, 1994, UNLESS THE OFFER IS EXTENDED.
------------------------

THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED
AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST A MAJORITY OF
THE SHARES (AND THE ASSOCIATED RIGHTS) OUTSTANDING ON A FULLY DILUTED
BASIS. THE OFFER IS ALSO CONDITIONED UPON, AMONG OTHER THINGS, THE
RECEIPT OF APPROVAL OF THE SUPERINTENDENT OF INSURANCE OF THE STATE
OF NEW YORK FOR THE ACQUISITION OF CONTROL OF GERBER LIFE
INSURANCE COMPANY, A WHOLLY OWNED SUBSIDIARY OF GERBER PRODUCTS
COMPANY, BY SANDOZ LTD. PURSUANT TO THE OFFER. IT IS NOT EXPECTED
THAT THIS CONDITION WILL BE SATISFIED BEFORE A SUBSTANTIAL
PERIOD OF TIME HAS ELAPSED.
------------------------

THE BOARD OF DIRECTORS OF GERBER PRODUCTS COMPANY UNANIMOUSLY HAS DETERMINED
THAT EACH OF THE OFFER AND THE MERGER (AS DEFINED HEREIN) IS FAIR TO, AND IN
THE BEST INTERESTS OF, THE SHAREHOLDERS OF GERBER PRODUCTS COMPANY,
AND RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
------------------------

IMPORTANT

Any shareholder desiring to tender all or any portion of such shareholder's
shares of common stock, par value $2.50 per share (the "Common Stock"), of
Gerber Products Company and the associated Rights (as defined herein; and,
together with the Common Stock, the "Shares") should either (1) complete and
sign the Letter of Transmittal (or a facsimile thereof) in accordance with the
instructions in the Letter of Transmittal and mail or deliver it together with
the certificate(s) evidencing tendered Shares, and any other required documents,
to the Depositary or tender such Shares pursuant to the procedure for book-entry
transfer set forth in Section 3 or (2) request such shareholder's broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for such shareholder. Any shareholder whose Shares are registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
must contact such broker, dealer, commercial bank, trust company or other
nominee if such shareholder desires to tender such Shares.

A shareholder who desires to tender Shares and whose certificates
evidencing such Shares are not immediately available, or who cannot comply with
the procedure for book-entry transfer on a timely basis, may tender such Shares
by following the procedure for guaranteed delivery set forth in Section 3.

Questions or requests for assistance may be directed to the Information
Agent or to the Dealer Manager at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Additional copies
of this Offer to Purchase, the Letter of Transmittal and the Notice of
Guaranteed Delivery may also be obtained from the Information Agent or from
brokers, dealers, commercial banks or trust companies.
------------------------

The Dealer Manager for the Offer is:
MORGAN STANLEY & CO.
Incorporated
May 27, 1994
<PAGE> 2

TABLE OF CONTENTS

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PAGE
----
<C> <S> <C>
INTRODUCTION
1. Terms of the Offer; Expiration Date............................................. 3
2. Acceptance for Payment and Payment for Shares................................... 4
3. Procedures for Accepting the Offer and Tendering Shares......................... 5
4. Withdrawal Rights............................................................... 7
5. Certain Federal Income Tax Consequences......................................... 8
6. Price Range of Shares; Dividends................................................ 8
7. Certain Information Concerning the Company...................................... 9
8. Certain Information Concerning Purchaser and Parent............................. 11
9. Financing of the Offer and the Merger........................................... 14
10. Background of the Offer; Contacts with the Company; the Merger Agreement and the
Rights Agreement................................................................ 15
11. Purpose of the Offer; Plans for the Company After the Offer and the Merger...... 25
12. Dividends and Distributions..................................................... 26
13. Effect of the Offer on the Market for the Shares, Exchange Listing and Exchange
Act Registration................................................................ 27
14. Certain Conditions of the Offer................................................. 28
15. Certain Legal Matters and Regulatory Approvals.................................. 29
16. Fees and Expenses............................................................... 32
17. Miscellaneous................................................................... 33
</TABLE>

Schedule I. Directors and Executive Officers of Parent and Purchaser
<PAGE> 3

To the Holders of Common Stock of
Gerber Products Company:

INTRODUCTION

SL Sub Corp., a Delaware corporation ("Purchaser") and an indirect wholly
owned subsidiary of Sandoz Ltd., a corporation organized under the laws of
Switzerland ("Parent"), hereby offers to purchase all outstanding shares of
common stock, par value $2.50 per share (the "Common Stock"), of Gerber Products
Company, a Michigan corporation (the "Company"), and the associated preferred
stock purchase rights (the "Rights" and, together with the Common Stock, the
"Shares") issued pursuant to the Rights Agreement, dated as of July 25, 1990, as
amended, between the Company and Harris Trust and Savings Bank, as Rights Agent
(the "Rights Agreement"), at a price of $53.00 per Share, net to the seller in
cash, upon the terms and subject to the conditions set forth in this Offer to
Purchase and in the related Letter of Transmittal (which together constitute the
"Offer"). Until the Distribution Date (as defined in the Rights Agreement), the
Rights will be evidenced by and trade with the certificates evidencing the
Common Stock. See Section 10 for a brief description of the Rights Agreement and
its application to the Offer and the Merger (as defined below).

Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by
Purchaser pursuant to the Offer. Purchaser will pay all charges and expenses of
Morgan Stanley & Co. Incorporated ("Morgan Stanley"), which is acting as Dealer
Manager for the Offer (in such capacity, the "Dealer Manager"), Chemical Bank
(the "Depositary") and Georgeson & Company Inc. (the "Information Agent")
incurred in connection with the Offer. See Section 16.

THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") UNANIMOUSLY HAS
DETERMINED THAT EACH OF THE OFFER AND THE MERGER IS FAIR TO, AND IN THE BEST
INTERESTS OF, THE SHAREHOLDERS OF THE COMPANY, AND RECOMMENDS THAT SHAREHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.

The Company has advised Parent that Goldman, Sachs & Co. ("Goldman Sachs")
and Wasserstein Perella & Co., Inc. ("Wasserstein Perella") have each delivered
to the Board its opinion as to the fairness of the $53.00 per Share cash
consideration to be received by the shareholders of the Company pursuant to the
Offer and the Merger. Copies of the opinions of Goldman Sachs and Wasserstein
Perella, which set forth the procedures followed, the factors considered and the
assumptions made by Goldman Sachs and Wasserstein Perella, are contained in the
Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule
14D-9"), which is being mailed to shareholders herewith.

THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST A
MAJORITY OF THE SHARES THEN OUTSTANDING ON A FULLY DILUTED BASIS (THE "MINIMUM
CONDITION") AND (II) THE RECEIPT OF APPROVAL OF THE SUPERINTENDENT OF INSURANCE
OF THE STATE OF NEW YORK FOR THE ACQUISITION OF CONTROL OF GERBER LIFE INSURANCE
COMPANY BY PARENT PURSUANT TO THE OFFER (THE "REGULATORY APPROVAL CONDITION").
IT IS NOT EXPECTED THAT THE REGULATORY APPROVAL CONDITION WILL BE SATISFIED
BEFORE A SUBSTANTIAL PERIOD OF TIME HAS ELAPSED. SEE SECTION 14, WHICH SETS
FORTH IN FULL THE CONDITIONS TO THE OFFER. SEE ALSO SECTION 15, WHICH DESCRIBES
CERTAIN ASPECTS OF THE NEW YORK INSURANCE LAW.

The Company owns Gerber Life Insurance Company, a stock life insurance
company domiciled in the State of New York ("Gerber Life"). Under Section 1506
of the New York Insurance Law (the "Insurance Law"), the acquisition of Shares
pursuant to the Offer will require the approval of the Superintendent of
Insurance of the State of New York (the "Superintendent"). In connection with
obtaining such approval, Parent and Purchaser intend to file promptly following
the date of this Offer to Purchase an Application for Approval of Acquisition of
Control (the "Form A") with the Superintendent, as required by the Insurance Law
and the rules and regulations thereunder. There are no specific requirements
imposed on the
<PAGE> 4

Superintendent as to the timing of the Superintendent's determination with
respect to such application. Accordingly, the consideration and determination of
the Superintendent may result in substantial delay in the consummation of the
Offer. Purchaser and Parent anticipate that the Regulatory Approval Condition
will be satisfied in three to six months following the date hereof. However,
there can be no assurance that such condition will be satisfied within such time
period. The Merger Agreement (as defined below) provides that Purchaser is
required to extend the Offer at any time up to November 30, 1994 if the
Regulatory Approval Condition has not been satisfied or waived; provided that
(i) such extension must be for a reasonable amount of time in light of the
circumstances related to satisfying such condition, (ii) any extension made
before August 10, 1994 may not extend the Offer beyond August 24, 1994, (iii)
unless waived in writing by the Company, any extension made on or after August
10, 1994 may not be for a period in excess of 10 Business Days and (iv)
Purchaser shall, if permitted by applicable law, amend the Offer to cause the
Offer to expire on a date not more than 10 Business Days from the date the
Regulatory Approval Condition is met or waived if the Offer has been extended
and is not due to expire within 15 Business Days of the receipt of such approval
or waiver.

The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of May 21, 1994, as amended (the "Merger Agreement"), among Parent, Purchaser
and the Company. The Merger Agreement provides that, among other things, as soon
as practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement and in
accordance with the relevant provisions of the General Corporation Law of the
State of Delaware ("Delaware Law") and the Michigan Business Corporation Act
("Michigan Law"), Purchaser will be merged with and into the Company (the
"Merger"). Following consummation of the Merger, the Company will continue as
the surviving corporation (the "Surviving Corporation") and will become an
indirect wholly owned subsidiary of Parent. At the effective time of the Merger
(the "Effective Time"), each Share issued and outstanding immediately prior to
the Effective Time (other than Shares held in the treasury of the Company or
owned by Purchaser, Parent or any direct or indirect wholly owned subsidiary of
Parent or of the Company) will be cancelled and converted automatically into the
right to receive $53.00 in cash, or any higher price that may be paid per Share
in the Offer, without interest (the "Merger Consideration"). The Merger
Agreement is more fully described in Section 10.

The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer and from time to time thereafter, Purchaser
shall be entitled to designate up to such number of directors, rounded up to the
next whole number, on the Board as will give Purchaser representation on the
Board equal to the product of the total number of directors on the Board
multiplied by the percentage that the aggregate number of Shares then
beneficially owned by Purchaser and its affiliates following such purchase bears
to the total number of Shares then outstanding. In the Merger Agreement, the
Company has agreed to use all reasonable efforts to cause Purchaser's designees
to be elected as directors of the Company, including increasing the size of the
Board or securing the resignations of incumbent directors or both.
Notwithstanding the foregoing, the Company and Purchaser have agreed to use all
reasonable efforts to assure that at all times prior to the Effective Time the
Board shall include at least three directors who were directors on the date of
the Merger Agreement or persons designated by such directors and neither were
designated by Purchaser nor are employees of the Company.

The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including, if required by law, the approval and adoption of
the Merger Agreement by the requisite vote of the shareholders of the Company.
See Section 11. Under the Company's Restated Articles of Incorporation and
Michigan Law, except as otherwise described below, the affirmative vote of the
holders of a majority of the outstanding Shares is required to approve and adopt
the Merger Agreement and the Merger. Consequently, if Purchaser acquires
(pursuant to the Offer or otherwise) at least a majority of the then outstanding
Shares, Purchaser will have sufficient voting power to approve and adopt the
Merger Agreement and the Merger without the vote of any other shareholder.

Under Michigan Law and Delaware Law, if Purchaser acquires, pursuant to the
Offer or otherwise, at least 90% of the then outstanding Shares, Purchaser will
be able to approve and adopt the Merger Agreement and the transactions
contemplated thereby, including the Merger, without a vote of the Company's
shareholders. In such event, Parent, Purchaser and the Company have agreed to
take, at the request of

2
<PAGE> 5

Purchaser, all necessary and appropriate action to cause the Merger to become
effective as soon as reasonably practicable after such acquisition, without a
meeting of the Company's shareholders. If, however, Purchaser does not acquire
at least 90% of the then outstanding Shares pursuant to the Offer or otherwise
and a vote of the Company's shareholders is required under Michigan Law, a
significantly longer period of time will be required to effect the Merger. See
Section 11.

The Company has advised Purchaser that as of May 21, 1994, 69,519,935
Shares and options to purchase 1,705,537 Shares were issued and outstanding and
21,685 Shares were authorized to be issued under the Company's Stock Ownership
Plan and Annual Bonus Plan. As a result, as of such date, the Minimum Condition
would be satisfied if Purchaser acquired 35,623,579 Shares.

THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.

1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of such extension or amendment), Purchaser will accept for
payment and pay for all Shares validly tendered prior to the Expiration Date (as
hereinafter defined) and not withdrawn as permitted by Section 4. The term
"Expiration Date" means 5:00 p.m., New York City time, on Thursday, June 30,
1994, unless and until Purchaser, in its sole discretion (but subject to the
terms and conditions of the Merger Agreement), shall have extended the period
during which the Offer is open, in which event the term "Expiration Date" shall
mean the latest time and date at which the Offer, as so extended by Purchaser,
shall expire. The Merger Agreement provides that Purchaser is required to extend
the Offer at any time up to November 30, 1994 if the Regulatory Approval
Condition has not been satisfied or waived.

Subject to the applicable regulations of the Securities and Exchange
Commission (the "Commission"), Purchaser also expressly reserves the right, in
its sole discretion (but subject to the terms and conditions of the Merger
Agreement), at any time and from time to time, (i) to delay acceptance for
payment of, or, regardless of whether such Shares were theretofore accepted for
payment, payment for, any Shares pending receipt of any regulatory approval
specified in Section 15, (ii) to terminate the Offer and not accept for payment
any Shares upon the occurrence of any of the conditions specified in Section 14
and (iii) to waive any condition or otherwise amend the Offer in any respect, by
giving oral or written notice of such delay, termination, waiver or amendment to
the Depositary and by making a public announcement thereof. The Merger Agreement
provides that, without the consent of the Company, Purchaser will not (i)
decrease the price per Share payable pursuant to the Offer, (ii) change the form
of consideration to be paid in the Offer, (iii) reduce the maximum number of
Shares to be purchased in the Offer or the Minimum Condition, (iv) impose
conditions to the Offer in addition to those set forth in Section 14 or modify
the conditions set forth in Section 14 or (v) amend any other term of the Offer
in a manner adverse to the holders of Shares. Purchaser acknowledges that (i)
Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires Purchaser to pay the consideration offered or return
the Shares tendered promptly after the termination or withdrawal of the Offer
and (ii) Purchaser may not delay acceptance for payment of, or payment for
(except as provided in clause (i) of the first sentence of this paragraph), any
Shares upon the occurrence of any of the conditions specified in Section 14
without extending the period of time during which the Offer is open.

Any such extension, delay, termination, waiver or amendment will be
followed as promptly as practicable by public announcement thereof, such
announcement in the case of an extension to be made no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date. Subject to

3
<PAGE> 6

applicable law (including Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange
Act, which require that material changes be promptly disseminated to
shareholders in a manner reasonably designed to inform them of such changes) and
without limiting the manner in which Purchaser may choose to make any public
announcement, Purchaser shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a press
release to the Dow Jones News Service.

If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will extend the Offer to the extent required by Rules 14d-4(c),
14d-6(d) and 14e-1 under the Exchange Act.

Subject to the terms of the Merger Agreement, if, prior to the Expiration
Date, Purchaser should decide to decrease the number of Shares being sought or
to increase or decrease the consideration being offered in the Offer, such
decrease in the number of Shares being sought or such increase or decrease in
the consideration being offered will be applicable to all shareholders whose
Shares are accepted for payment pursuant to the Offer and, if at the time notice
of any such decrease in the number of Shares being sought or such increase or
decrease in the consideration being offered is first published, sent or given to
holders of such Shares, the Offer is scheduled to expire at any time earlier
than the period ending on the tenth business day from and including the date
that such notice is first so published, sent or given, the Offer will be
extended at least until the expiration of such ten business day period. 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 a.m.
through 12:00 midnight, New York City time.

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

2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and
subject to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of any such extension or amendment), Purchaser
will accept for payment, and will pay for, all Shares validly tendered prior to
the Expiration Date and not properly withdrawn, promptly after the latest to
occur of (i) the Expiration Date, (ii) the expiration or termination of any
applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), (iii) the receipt of approval of the
Superintendent for the acquisition of control of Gerber Life by Parent pursuant
to the Offer and (iv) the satisfaction or waiver of the conditions to the Offer
set forth in Section 14. Subject to applicable rules of the Commission and the
terms and conditions of the Merger Agreement, Purchaser expressly reserves the
right to delay acceptance for payment of, or payment for, Shares pending receipt
of any regulatory approvals specified in Section 15.

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 (i) the
certificates evidencing such Shares (the "Share Certificates") or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such
Shares into the Depositary's account at The Depository Trust Company, the
Midwest Securities Trust Company or the Philadelphia Depository Trust Company
(each, a "Book-Entry Transfer Facility" and, collectively, the "Book-Entry
Transfer Facilities") pursuant to the procedures set forth in Section 3, (ii)
the Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, with any required signature guarantees and (iii) any other documents
required under the Letter of Transmittal.

On May 25, 1994, Sandoz Corporation, a New York corporation and an indirect
wholly owned subsidiary of Parent ("Sandoz Corporation") filed on behalf of
Parent with the Federal Trade Commission (the "FTC") and the Antitrust Division
of the Department of Justice (the "Antitrust Division") a Premerger Notification
and Report Form under the HSR Act with respect to the Offer. Accordingly, it is
anticipated that the waiting period under the HSR Act applicable to the Offer
will expire at 11:59 p.m., New York City time, on June 9, 1994. Prior to the
expiration or termination of such waiting period, the FTC or the Antitrust
Division may

4
<PAGE> 7

extend such waiting period by requesting additional information from Parent with
respect to the Offer. If such a request is made, the waiting period will expire
at 11:59 p.m., New York City time, on the tenth calendar day after substantial
compliance by Parent with such a request. Thereafter, the waiting period may
only be extended by court order. The waiting period may be terminated prior to
its expiration by the FTC and the Antitrust Division. Parent has requested early
termination of the waiting period, although there can be no assurance that this
request will be granted. See Section 15 for additional information regarding the
HSR Act.

Parent and Purchaser intend to file promptly following the date of this
Offer to Purchase the Form A, as required by the Insurance Law and the rules and
regulations thereunder, in connection with obtaining the approval of the
Superintendent for the acquisition of control of Gerber Life by Parent pursuant
to the Offer. There are no specific requirements imposed on the Superintendent
as to the timing of the Superintendent's determination with respect to such
application. Accordingly, the consideration and determination of the
Superintendent may result in substantial delay in the consummation of the Offer.
See Section 15 for additional information regarding certain aspects of the
Insurance Law.

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

Purchaser reserves the right to transfer or assign, in whole or from time
to time in part, to one or more of its affiliates, the right to purchase all or
any portion of the Shares tendered pursuant to the Offer, but any such transfer
or assignment will not relieve Purchaser of its obligations under the Offer and
will in no way prejudice the rights of tendering shareholders to receive payment
for Shares validly tendered and accepted for payment pursuant to the Offer.

3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES. In order for a
holder of Shares validly to tender Shares pursuant to the Offer, the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed,
together with any required signature guarantees and any other documents required
by the Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase and either (i)
the Share Certificates evidencing tendered Shares must be received by the
Depositary at such address or such Shares must be tendered pursuant to the
procedure for book-entry transfer described below and a Book-Entry Confirmation
must be received by the Depositary, in each case prior to the Expiration Date,
or (ii) the tendering shareholder must comply with the guaranteed delivery
procedures described below.

THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.

5
<PAGE> 8

Book-Entry Transfer. The Depositary will establish accounts with respect
to the Shares at the Book-Entry Transfer Facilities for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the system of any Book-Entry Transfer
Facility may make a book-entry delivery of Shares by causing such Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account at such
Book-Entry Transfer Facility in accordance with such Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer at a Book-Entry Transfer Facility,
the Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, together with any required signature guarantees and any other required
documents, must, in any case, be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, or the tendering shareholder must comply with the guaranteed
delivery procedure described below. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.

Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a firm which is a member of the Medallion Signature Guarantee
Program (an "Eligible Institution"), except in cases where Shares are tendered
(i) by a registered holder of Shares who has not completed either the box
entitled "Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. If a Share Certificate is registered in the name of a
person other than the signer of the Letter of Transmittal, or if payment is to
be made, or a Share Certificate not accepted for payment or not tendered is to
be returned, to a person other than the registered holder(s), then the Share
Certificate must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name(s) of the registered holder(s) appear on
the Share Certificate, with the signature(s) on such Share Certificate or stock
powers guaranteed by an Eligible Institution. See Instructions 1 and 5 of the
Letter of Transmittal.

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

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

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

(iii) the Share Certificates (or a Book-Entry Confirmation) evidencing
all tendered Shares, in proper form for transfer, in each case together
with the Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, with any required signature guarantees, and any other
documents required by the Letter of Transmittal are received by the
Depositary within five New York Stock Exchange, Inc. ("NYSE") trading days
after the date of execution of such Notice of Guaranteed Delivery.

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

In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of the
Share Certificates evidencing such Shares, or a Book-Entry Confirmation of the
delivery of such Shares, and the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
and any other documents required by the Letter of Transmittal.

Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by Purchaser in its sole discretion, which
determination shall be final and binding on all parties. Purchaser reserves the
absolute right to reject

6
<PAGE> 9

any and all tenders determined by it not to be in proper form or the acceptance
for payment of which may, in the opinion of its counsel, be unlawful. Purchaser
also reserves the absolute right to waive any condition of the Offer or any
defect or irregularity, in the tender of any Shares of any particular
shareholder, whether or not similar defects or irregularities are waived in the
case of other shareholders. No tender of Shares will be deemed to have been
validly made until all defects and irregularities have been cured or waived.
None of Purchaser, Parent, the Dealer Manager, the Depositary, the Information
Agent or any other person will be under any duty to give notification of any
defects or irregularities in tenders or incur any liability for failure to give
any such notification. Purchaser's interpretation of the terms and conditions of
the Offer (including the Letter of Transmittal and the instructions thereto)
will be final and binding.

Other Requirements. By executing the Letter of Transmittal as set forth
above, a tendering shareholder irrevocably appoints designees of Purchaser as
such shareholder's proxies, each with full power of substitution, in the manner
set forth in the Letter of Transmittal, to the full extent of such shareholder's
rights with respect to the Shares tendered by such shareholder and accepted for
payment by Purchaser (and with respect to any and all other Shares or other
securities issued or issuable in respect of such Shares on or after May 21,
1994). All such proxies shall be considered coupled with an interest in the
tendered Shares. Such appointment will be effective when, and only to the extent
that, Purchaser accepts such Shares for payment. Upon such acceptance for
payment, all prior proxies given by such shareholder with respect to such Shares
(and such other Shares and securities) will be revoked without further action,
and no subsequent proxies may be given nor any subsequent written consent
executed by such shareholder (and, if given or executed, will not be deemed to
be effective) with respect thereto. The designees of Purchaser will, with
respect to the Shares for which the appointment is effective, be empowered to
exercise all voting and other rights of such shareholder as they in their sole
discretion may deem proper at any annual or special meeting of the Company's
shareholders or any adjournment or postponement thereof, by written consent in
lieu of any such meeting or otherwise. Purchaser reserves the right to require
that, in order for Shares to be deemed validly tendered, immediately upon
Purchaser's payment for such Shares, Purchaser must be able to exercise full
voting rights with respect to such Shares.

The acceptance for payment by Purchaser of Shares pursuant to any of the
procedures described above will constitute a binding agreement between the
tendering shareholder and Purchaser upon the terms and subject to the conditions
of the Offer.

TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO PAYMENT TO
CERTAIN SHAREHOLDERS OF THE PURCHASE PRICE OF SHARES PURCHASED PURSUANT TO THE
OFFER, EACH SUCH SHAREHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH SHAREHOLDER'S
CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT SUCH SHAREHOLDER IS NOT
SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE
FORM W-9 IN THE LETTER OF TRANSMITTAL. IF BACKUP WITHHOLDING APPLIES WITH
RESPECT TO A SHAREHOLDER, THE DEPOSITARY IS REQUIRED TO WITHHOLD 31% OF ANY
PAYMENTS MADE TO SUCH SHAREHOLDER. SEE INSTRUCTION 9 OF THE LETTER OF
TRANSMITTAL.

4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer are
irrevocable except that such Shares may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment by Purchaser
pursuant to the Offer, may also be withdrawn at any time after July 25, 1994. If
Purchaser extends the Offer, is delayed in its acceptance for payment of Shares
or is unable to accept Shares for payment pursuant to the Offer for any reason,
then, without prejudice to Purchaser's rights under the Offer, the Depositary
may, nevertheless, on behalf of Purchaser, retain tendered Shares, and such
Shares may not be withdrawn except to the extent that tendering shareholders are
entitled to withdrawal rights as described in this Section 4. Any such delay
will be by an extension of the Offer to the extent required by law.

For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover page of this Offer to Purchase.
Any such notice of withdrawal must specify the name of the person who tendered
the Shares to be withdrawn, the number of Shares to be withdrawn and the name of
the registered holder of such Shares if different from that of the person who
tendered such Shares. If Share Certificates evidencing Shares to be withdrawn
have been delivered or otherwise identified to the Depositary, then, prior to
the physical release of

7
<PAGE> 10

such Share Certificates, the serial numbers shown on such Share Certificates
must be submitted to the Depositary and the signature(s) on the notice of
withdrawal must be guaranteed by an Eligible Institution, unless such Shares
have been tendered for the account of an Eligible Institution. If Shares have
been tendered pursuant to the procedure for book-entry transfer as set forth in
Section 3, any notice of withdrawal must specify the name and number of the
account at the Book-Entry Transfer Facility to be credited with the withdrawn
Shares.

All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by Purchaser, in its sole
discretion, whose determination will be final and binding. None of Purchaser,
Parent, the Dealer Manager, the Depositary, the Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give any such notification.

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

5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The receipt of cash for Shares
pursuant to the Offer or in the Merger will be a taxable transaction for federal
income tax purposes and may also be a taxable transaction under applicable
state, local or foreign tax laws. In general, a shareholder will recognize gain
or loss for federal income tax purposes equal to the difference between the
amount of cash received in exchange for the Shares sold and such shareholder's
adjusted tax basis in such Shares. Assuming the Shares constitute capital assets
in the hands of the shareholder, such gain or loss will be capital gain or loss
and will be long term capital gain or loss if the holder will have held the
Shares for more than one year at the time of the sale. Gain or loss will be
calculated separately for each block of Shares tendered pursuant to the Offer.

THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE TO CERTAIN TYPES OF
SHAREHOLDERS, INCLUDING SHAREHOLDERS WHO ACQUIRED SHARES PURSUANT TO THE
EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS COMPENSATION, INDIVIDUALS WHO
ARE NOT CITIZENS OR RESIDENTS OF THE UNITED STATES AND FOREIGN CORPORATIONS.

THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND IS BASED UPON PRESENT LAW. SHAREHOLDERS ARE URGED TO
CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE
OFFER AND THE MERGER TO THEM, INCLUDING THE APPLICATION AND EFFECT OF THE
ALTERNATIVE MINIMUM TAX, AND STATE, LOCAL AND FOREIGN TAX LAWS.

6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are listed and principally
traded on the NYSE. The following table sets forth, for the calendar quarters
indicated, the high and low sales prices per Share on the NYSE as reported by
the Dow Jones News Service and the amount of cash dividends paid or declared per
Share according to published financial sources. All prices and dividends prior
to August 5, 1992 have been adjusted to reflect a two-for-one stock split of the
Shares effected on such date.

<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
---- --- ---------
<S> <C> <C> <C>
1992:
First Quarter.......................................... $38 7/16 $331/4 $.180
Second Quarter......................................... $34 11/16 $30 $.180
Third Quarter.......................................... $35 7/8 $321/4 $.205
Fourth Quarter......................................... $37 $293/8 $.205
1993:
First Quarter.......................................... $32 1/2 $293/8 $.205
Second Quarter......................................... $30 7/8 $251/2 $.205
Third Quarter.......................................... $28 3/8 $241/8 $.215
Fourth Quarter......................................... $29 3/8 $253/4 $.215
1994:
First Quarter.......................................... $34 3/4 $261/4 $.215
Second Quarter (through May 26, 1994).................. $51 3/4 $283/8 $.215
</TABLE>

8
<PAGE> 11

On May 20, 1994, the last full trading day prior to the announcement of the
execution of the Merger Agreement and of Purchaser's intention to commence the
Offer, the closing price per Share as reported on the NYSE was $34 5/8. On May
26, 1994, the last full trading day prior to the commencement of the Offer, the
closing price per Share as reported on the NYSE was $50 1/2.

SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.

7. CERTAIN INFORMATION CONCERNING THE COMPANY. Except as otherwise set
forth herein, the information concerning the Company contained in this Offer to
Purchase, including financial information, has been furnished by the Company or
has been taken from or based upon publicly available documents and records on
file with the Commission and other public sources. Neither Purchaser nor Parent
assumes any responsibility for the accuracy or completeness of the information
concerning the Company furnished by the Company or contained in such documents
and records or for any failure by the Company to disclose events which may have
occurred or may affect the significance or accuracy of any such information but
which are unknown to Purchaser or Parent.

General. The Company is a Michigan corporation with its principal
executive offices located at 445 State Street, Fremont, Michigan 49413.

The Company was incorporated in 1901 as the Fremont Canning Company. The
Company and its subsidiaries primarily produce products and provide services for
families with infants and small children. Products consist primarily of baby
foods, infant formula (pursuant to agreements with Bristol-Myers U.S.
Pharmaceutical and Nutrition Group), juvenile apparel and a baby care line of
feeding products and infant care items. In addition, Gerber Life, a subsidiary
of the Company, offers life and health insurance products.

Financial Information. Set forth below is certain selected consolidated
financial information relating to the Company and its subsidiaries which has
been excerpted or derived from the audited financial statements contained in the
Company's Current Report on Form 8-K dated May 21, 1994 (the "Form 8-K"). More
comprehensive financial information is included in the Form 8-K and other
documents filed by the Company with the Commission. The financial information
that follows is qualified in its entirety by reference to such reports and other
documents, including the financial statements and related notes contained
therein. Such reports and other documents may be examined and copies may be
obtained from the offices of the Commission in the manner set forth below.

9
<PAGE> 12

GERBER PRODUCTS COMPANY

SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
FISCAL YEAR ENDED MARCH
31,
-------------------------
1994 1993
---------- ----------
<S> <C> <C>
INCOME STATEMENT DATA:
Net sales and revenue............................................. $1,171,838 $1,269,484
Interest, royalties and other income.............................. 29,199 23,921
---------- ----------
TOTAL INCOME................................................... 1,201,037 1,293,405
Deductions from income:
Cost of products sold and services provided.................... 624,947 716,621
Marketing, distribution, administrative and general expenses... 371,116 376,625
Gain on sale of subsidiary..................................... -- (11,850)
Restructuring charges.......................................... 22,353 --
Interest expense............................................... 11,335 12,361
---------- ----------
TOTAL DEDUCTIONS............................................... 1,029,751 1,093,757
---------- ----------
EARNINGS BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF
ACCOUNTING CHANGES............................................ 171,286 199,648
Income taxes...................................................... 57,656 66,803
---------- ----------
EARNINGS BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGES........ 113,630 132,845
Cumulative effect of accounting changes........................... -- (90,390)
---------- ----------
NET EARNINGS................................................... $ 113,630 $ 42,455
---------- ----------
---------- ----------
Earnings per share:
Before cumulative effect of accounting changes................. $ 1.63 $ 1.80
Cumulative effect of accounting changes........................ -- (1.22)
---------- ----------
NET EARNINGS PER SHARE......................................... $ 1.63 $ 0.58
</TABLE>

<TABLE>
<CAPTION>
AT MARCH 31,
-------------------------
1994 1993
---------- ----------
<S> <C> <C>
BALANCE SHEET DATA:
ASSETS
Current Assets
Cash and short-term investments................................... $ 47,562 $ 120,328
Trade accounts receivable, less allowances........................ 107,061 103,073
Inventories....................................................... 191,148 194,769
Other current assets.............................................. 94,797 74,578
---------- ----------
TOTAL CURRENT ASSETS........................................... 440,568 492,748
Other assets...................................................... 327,265 265,848
Land, buildings and equipment..................................... 234,170 235,844
---------- ----------
TOTAL ASSETS................................................... $1,002,003 $ 994,440
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities............................................... $ 271,910 $ 266,620
Long-term debt, less current maturities........................... 115,677 116,831
Postretirement benefits........................................... 156,582 150,138
Other liabilities................................................. 111,064 94,384
Shareholders' equity.............................................. 346,770 366,467
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY..................... $1,002,003 $ 994,440
---------- ----------
---------- ----------
</TABLE>

10
<PAGE> 13

In connection with Parent's review of the Company and in the course of the
negotiations between the Company and Parent described in Section 10, the Company
provided Parent with certain business and financial information which Parent and
Purchaser believe is not publicly available, including the following forecasts:

<TABLE>
<CAPTION>
FISCAL YEAR ENDING MARCH 31,
----------------------------------------
1995 1996 1997
---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
Net sales...................................... $1,241,123 $1,352,665 $1,476,104
Operating income............................... 207,310 245,070 280,175
Net earnings................................... 125,276 150,572 172,655
Net earnings per Share......................... $ 1.83 $ 2.26 $ 2.67
</TABLE>

These projections do not give effect to the Offer or the Merger.

PROJECTED INFORMATION OF THIS TYPE IS BASED ON ESTIMATES AND ASSUMPTIONS
THAT ARE INHERENTLY SUBJECT TO SIGNIFICANT ECONOMIC AND COMPETITIVE
UNCERTAINTIES AND CONTINGENCIES, ALL OF WHICH ARE DIFFICULT TO PREDICT AND MANY
OF WHICH ARE BEYOND THE COMPANY'S CONTROL. ACCORDINGLY, THERE CAN BE NO
ASSURANCE THAT THE PROJECTED RESULTS WOULD BE REALIZED OR THAT ACTUAL RESULTS
WOULD NOT BE SIGNIFICANTLY HIGHER OR LOWER THAN THOSE SET FORTH ABOVE. IN
ADDITION, THESE PROJECTIONS WERE NOT PREPARED WITH A VIEW TO PUBLIC DISCLOSURE
OR COMPLIANCE WITH THE PUBLISHED GUIDELINES OF THE COMMISSION OR THE GUIDELINES
ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS REGARDING
PROJECTIONS AND FORECASTS AND ARE INCLUDED IN THIS OFFER TO PURCHASE ONLY
BECAUSE SUCH INFORMATION WAS MADE AVAILABLE TO PARENT BY THE COMPANY. NONE OF
PARENT, PURCHASER, THE COMPANY OR ANY OTHER PARTY ASSUMES ANY RESPONSIBILITY FOR
THE ACCURACY OR VALIDITY OF THE FOREGOING PROJECTIONS.

The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Information as of particular
dates concerning the Company's directors and officers, their remuneration, stock
options granted to them, the principal holders of the Company's securities and
any material interest of such persons in transactions with the Company is
required to be disclosed in proxy statements distributed to the Company's
shareholders and filed with the Commission. Such reports, proxy statements and
other information should be available for inspection at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and also should be available for inspection at the
Commission's regional offices located at Seven World Trade Center, 13th Floor,
New York, New York 10048 and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials may also
be obtained by mail, upon payment of the Commission's customary fees, by writing
to its principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The
information should also be available for inspection at the NYSE, 20 Broad
Street, New York, New York 10005.

8. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT. Purchaser is a
newly incorporated Delaware corporation organized in connection with the Offer
and the Merger and has not carried on any activities other than in connection
with the Offer and the Merger. The principal offices of Purchaser are located at
608 Fifth Avenue, New York, New York 10020. Purchaser is an indirect wholly
owned subsidiary of Parent.

Until immediately prior to the time that Purchaser will purchase Shares
pursuant to the Offer, it is not anticipated that Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions contemplated
by the Offer and the Merger. Because Purchaser is newly formed and has minimal
assets and capitalization, no meaningful financial information regarding
Purchaser is available.

Parent is a corporation organized under the laws of Switzerland. Its
principal offices are located at Lichtstrasse 35, CH-4002 Basle, Switzerland.
The principal business of Parent is the research, development, manufacture and
marketing of pharmaceutical, nutrition, seed, chemical, agro and construction
chemical products and environmental services.

11
<PAGE> 14

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

Set forth below are certain selected consolidated financial data relating
to Parent and its subsidiaries (collectively, the "Sandoz Group") for the last
two fiscal years, which has been excerpted from the audited financial statements
contained in the Sandoz Group's Annual Report for the fiscal year ended December
31, 1993, which has been furnished by Parent to the Commission. More
comprehensive financial information is included in such Annual Report, and the
following financial data is qualified in its entirety by reference to such
Annual Report, including the financial information and related notes contained
therein. Such Annual Report may be inspected and copies may be obtained from the
offices of the Commission in the same manner as set forth with respect to
information about the Company in Section 7. The data contained in the financial
statements set forth below were prepared in accordance with accounting
principles formulated by the International Accounting Standards Committee. The
Sandoz Group adopted accounting principles under International Accounting
Standards ("IAS") as of January 1, 1992. Such principles are substantially
similar to United States generally accepted accounting principles ("US GAAP").
The only material difference between the recognition and measurement criteria in
the accounting principles adopted by the Sandoz Group and those under US GAAP
relates to the treatment of goodwill.

Under US GAAP, goodwill relating to the acquisition of an investment is
capitalized and amortized over the period of its estimated useful life, up to a
maximum of 40 years. Because of a need to satisfy the requirements of diverse
legal and accounting systems around the world, IAS contain alternative
accounting procedures considered acceptable for the treatment of goodwill. From
the alternatives allowed under IAS, the Sandoz Group has elected to charge
goodwill directly to reserves in the year of acquisition, which is the same
accounting procedure as was followed by the Sandoz Group with respect to
goodwill prior to the adoption of the IAS by the Sandoz Group as of January 1,
1992.

12
<PAGE> 15

SANDOZ GROUP

SELECTED CONSOLIDATED FINANCIAL DATA
(IN MILLIONS OF SWISS FRANCS)

<TABLE>
<CAPTION>
FISCAL YEAR
ENDED DECEMBER 31,
-----------------------------
1993 1992
----------- -----------
<S> <C> <C>
INCOME STATEMENT DATA:
Sales...................................................................... Sfr. 15,100 Sfr. 14,416
Cost of goods sold......................................................... (5,773) (5,519)
----------- -----------
GROSS MARGIN........................................................... 9,327 8,897
Marketing and distribution................................................. (4,416) (4,298)
Research and development................................................... (1,744) (1,496)
Administration and general overheads....................................... (978) (1,095)
----------- -----------
OPERATING INCOME....................................................... 2,189 2,008
Financial income, net...................................................... 104 27
Other income and expense................................................... (99) (55)
----------- -----------
INCOME BEFORE TAXES AND MINORITY INTERESTS............................. 2,194 1,980
Taxes...................................................................... (481) (470)
----------- -----------
Income before minority interests........................................... 1,713 1,510
Minority interests......................................................... (7) (15)
----------- -----------
NET INCOME............................................................. Sfr. 1,706 Sfr. 1,495
</TABLE>

<TABLE>
<CAPTION>
AT DECEMBER 31,
-----------------------------
1993 1992
----------- -----------
<S> <C> <C>
BALANCE SHEET DATA:
ASSETS
Long-term assets
Tangible fixed assets...................................................... Sfr. 6,610 Sfr. 6,358
Intangible assets.......................................................... 120 74
Financial fixed assets..................................................... 358 235
----------- -----------
TOTAL LONG-TERM ASSETS................................................. 7,088 6,667
Current assets
Inventories................................................................ 2,972 3,027
Trade accounts receivable.................................................. 2,737 2,563
Other current assets....................................................... 1,224 1,129
Marketable securities...................................................... 1,481 1,598
Cash and short-term deposits............................................... 4,699 3,026
----------- -----------
TOTAL CURRENT ASSETS................................................... 13,113 11,343
----------- -----------
TOTAL ASSETS........................................................... Sfr. 20,201 Sfr. 18,010
EQUITY AND LIABILITIES
EQUITY
Share capital.............................................................. Sfr. 629 Sfr. 629
- -- bearer shares held by the Group......................................... (36) (39)
Participation capital...................................................... 187 187
- -- held by the Group....................................................... (50) (50)
Reserves................................................................... 8,121 7,106
Net income for the year.................................................... 1,706 1,495
----------- -----------
TOTAL EQUITY........................................................... 10,557 9,328
MINORITY INTERESTS..................................................... 195 175
</TABLE>

<TABLE>
<CAPTION>
AT DECEMBER 31,
-----------------------------
1993 1992
----------- -----------
<S> <C> <C>
LIABILITIES
Long-term liabilities
Financial debts............................................................ Sfr. 1,762 Sfr. 1,301
Deferred taxes............................................................. 512 562
Others..................................................................... 872 698
TOTAL LONG-TERM LIABILITIES............................................ 3,146 2,561
----------- -----------
Short-term liabilities
Trade accounts payable..................................................... 1,031 1,178
Financial debts............................................................ 2,943 2,339
Others..................................................................... 2,329 2,429
TOTAL SHORT-TERM LIABILITIES........................................... 6,303 5,946
----------- -----------
TOTAL LIABILITIES...................................................... 9,449 8,507
----------- -----------
TOTAL EQUITY AND LIABILITIES........................................... Sfr. 20,201 Sfr. 18,010
</TABLE>

13
<PAGE> 16

The consolidated financial statements of the Sandoz Group are published in
Swiss francs. The following table sets forth, for the periods and dates
indicated, certain information concerning the exchange rate for Swiss francs
into U.S. dollars based upon the noon buying rate in New York City for cable
transfers in foreign currencies as determined from publicly available sources:

SWISS FRANCS PER U.S. DOLLAR

<TABLE>
<CAPTION>
PERIOD AT DECEMBER 31, AVERAGE RATE(1) HIGH LOW
- -------------------------------------------- --------------- --------------- ------ ------
<S> <C> <C> <C> <C>
1992........................................ 1.4665 1.4060 1.5508 1.2173
1993........................................ 1.4850 1.4778 1.5470 1.3849
</TABLE>

- ---------------
(1) The average of the exchange rates on the last day of each month during the
year.

Except as described in this Offer to Purchase, (i) none of Purchaser,
Parent nor, to the best knowledge of Purchaser and Parent, any of the persons
listed in Schedule I to this Offer to Purchase or any associate or
majority-owned subsidiary of Purchaser, Parent or any of the persons so listed
beneficially owns or has any right to acquire, directly or indirectly, any
Shares and (ii) none of Purchaser, Parent nor, to the best knowledge of
Purchaser and Parent, any of the persons or entities referred to above nor any
director, executive officer or subsidiary of any of the foregoing has effected
any transaction in the Shares during the past 60 days.

Except as provided in the Merger Agreement and as otherwise described in
this Offer to Purchase, none of Purchaser, Parent nor, to the best knowledge of
Purchaser and Parent, any of the persons listed in Schedule I to this Offer to
Purchase, has any contract, arrangement, understanding or relationship with any
other person with respect to any securities of the Company, including, but not
limited to, any contract, arrangement, understanding or relationship concerning
the transfer or voting of such securities, joint ventures, loan or option
arrangements, puts or calls, guaranties of loans, guaranties against loss or the
giving or withholding of proxies. Except as set forth in this Offer to Purchase,
since April 1, 1990, neither Purchaser nor Parent nor, to the best knowledge of
Purchaser and Parent, any of the persons listed on Schedule I hereto, has had
any business relationship or transaction with the Company or any of its
executive officers, directors or affiliates that is required to be reported
under the rules and regulations of the Commission applicable to the Offer.
Except as set forth in this Offer to Purchase, since April 1, 1990, there have
been no contacts, negotiations or transactions between any of Purchaser, Parent,
or any of their respective subsidiaries or, to the best knowledge of Purchaser
and Parent, any of the persons listed in Schedule I to this Offer to Purchase,
on the one hand, and the Company or its affiliates, on the other hand,
concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, an election of directors or a sale or other transfer
of a material amount of assets.

9. FINANCING OF THE OFFER AND THE MERGER. The total amount of funds
required by Purchaser to consummate the Offer and the Merger and to pay related
fees and expenses is estimated to be approximately $3.8 billion. Purchaser will
obtain all of such funds from Parent or its affiliates. Parent will provide such
funds from its working capital or its affiliates' working capital or from
existing credit facilities or new credit facilities established for this purpose
or from a combination of the foregoing. No decision has been made concerning
which of the foregoing sources Parent will utilize. Such decision will be made
based on Parent's review from time to time of the advisability of particular
actions, as well as on prevailing interest rates and financial and other
economic conditions and such other factors as Parent may deem appropriate.
Parent will file an amendment to its Tender Offer Statement on Schedule 14D-1
(the "Schedule 14D-1") promptly after any such decision is made.

Parent anticipates that any indebtedness incurred through borrowings under
credit facilities will be repaid from a variety of sources, which may include,
but may not be limited to, funds generated internally by Parent and its
affiliates (including, following the Merger, funds generated by the Surviving
Corporation), bank refinancing, and the public or private sale of debt or equity
securities. No decision has been made concerning

14
<PAGE> 17

the method Parent will employ to repay such indebtedness. Such decision will be
made based on Parent's review from time to time of the advisability of
particular actions, as well as on prevailing interest rates and financial and
other economic conditions and such other factors as Parent may deem appropriate.

10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER
AGREEMENT AND THE RIGHTS AGREEMENT.

On April 19, 1994, Dr. Raymund Breu, Parent's Chief Financial Officer, and
representatives of Morgan Stanley phoned the Company's financial advisors to
indicate Parent's interest in pursuing a possible business combination with the
Company. The Company's financial advisors recommended that Parent contact the
Company directly as soon as possible.

On April 21, 1994, Dr. Marc Moret, Chairman of the Board of Directors of
Parent, phoned Alfred Piergallini, Chairman of the Board, President and Chief
Executive Officer of the Company, to express Parent's high regard for the
Company's organization and operations, and to reiterate Parent's interest in
exploring a business combination. Mr. Piergallini invited representatives of
Parent to participate in more detailed discussions in Chicago.

On April 27, 1994, Dr. Breu and other representatives of Parent met with
Mr. Piergallini and other representatives of the Company in Chicago. The parties
discussed potential forms of business combinations and made mutual presentations
about their respective companies. The Company indicated a willingness to
continue discussions and suggested that the parties enter into a confidentiality
agreement. Representatives of the Company were invited to continue discussions
in Basle, Switzerland, Parent's headquarters.

The Company and Sandoz Corporation entered into a confidentiality agreement
as of April 29, 1994.

On May 2, 1994, Mr. Piergallini met with Dr. Moret and other
representatives of Parent in Basle, Switzerland. Representatives of the Company
made a presentation about its business and operations and made available to
Parent certain confidential financial and other materials. The Company indicated
that it was prepared to consider proposals concerning business combinations and
invited Parent to review more detailed information about the Company in Chicago.

From May 4 through May 9, 1994, the Company provided Parent access to
requested information at the offices of the Company's attorneys in Chicago,
Illinois.

From May 9, 1994 until the parties entered into the Merger Agreement, Dr.
Rolf Schweizer, Chief Executive Officer of Parent, and Mr. Piergallini held
several telephone conversations during which Dr. Schweizer expressed Parent's
continued interest in consummating a business combination with the Company.

On May 11, 1994, Parent's counsel received a draft of an agreement and plan
of merger and Parent was advised by the Company's advisors that the Company
would consider proposals from Parent and other interested bidders to be
submitted to the Company on May 18, 1994.

On May 18, 1994, Parent submitted to the Board a proposal to purchase all
of the outstanding Shares at a price of $53.00 per Share, together with a
mark-up of the form of agreement and plan of merger provided by the Company's
counsel. Such proposal expressed Parent's belief that the Company would serve as
an ideal foundation for Parent's food business in North America and reiterated
its commitment to the "Gerber" SUPERBRAND, and its continued expansion worldwide
and to sharing with the Company the full benefit of Parent's extensive worldwide
marketing expertise and unique knowledge of certain key markets. Such proposal
also expressed Parent's intention to maintain the Company's headquarters at
Fremont, Michigan under the leadership of the Company's existing senior
management to function as a base for Parent's North American consumer food
business and as the center of excellence for Parent's worldwide infant and baby
food operations. Further, Parent's proposal stated that it was not subject to
any financing contingency, that Purchaser was in a position to make all required
regulatory filings, including the Form A filing with the Superintendent,
promptly following execution of the Merger Agreement and that Parent was
prepared to modify the transaction structure if a structure were identified
which would accelerate the closing of the transaction. Parent also stated that
the Company should not assume that Parent would remain a bidder if its proposal
were not accepted at or prior to 6:00 p.m., New York City time, on Sunday, May
22, 1994.

15
<PAGE> 18

After the Company considered such proposal and discussed it with its legal
and financial advisors, the Company's financial advisors requested that Parent
submit its best and final offer for an acquisition of the Company not later than
10:00 a.m. on May 19, 1994. On May 19, 1994, Parent submitted to the Board a
letter reiterating its proposal to purchase all the outstanding Shares at a
price of $53.00 per Share and, in response to the Company's objection to the
amount of the termination fee requested by Parent, reducing such amount from
$150 million to $95 million.

After considering such proposal and discussing it with the Company's legal
and financial advisors, Mr. Piergallini and Fred Schomer, Executive Vice
President and Chief Financial Officer of the Company, met with Drs. Schweizer
and Breu during the afternoon of May 19, 1994. The Company's representatives
stated that Parent's proposal was higher than the proposals submitted by other
potential acquirors and that if an acceptable acquisition agreement could be
negotiated, it was prepared to recommend that Parent's proposal be accepted by
the Board. The parties then discussed the conditions to the Company's
acceptance, including a further reduction in the amount of the termination fee
that Parent had requested and a narrower scope of circumstances in which such
termination fee would be payable to Parent. Parent and the Company then
adjourned the discussions in order to consult with their advisors.

Representatives of the Company and Parent met during the evening of May 19
and on May 20, 1994, to negotiate the terms of the proposed agreement and plan
of merger, including the amount of the termination fee and the circumstances in
which it would be payable to Parent. All remaining issues under discussion were
resolved by telephone conference on the morning of May 21, 1994.

Following approval and adoption of the Merger Agreement by the Board,
Parent, Purchaser and the Company executed and delivered the Merger Agreement on
the afternoon of May 21, 1994.

THE MERGER AGREEMENT

The following is a summary of the Merger Agreement, a copy of which is
filed as an Exhibit to the Schedule 14D-1 filed by Purchaser and Parent with the
Commission in connection with the Offer. Such summary is qualified in its
entirety by reference to the Merger Agreement.

The Offer. The Merger Agreement provides for the commencement of the Offer
not later than the fifth business day from and including the date of the initial
public announcement of Purchaser's intention to commence the Offer. The
obligation of Purchaser to accept for payment and pay for Shares tendered
pursuant to the Offer is subject to the satisfaction of the Minimum Condition,
the Regulatory Approval Condition and certain other conditions that are
described in Section 14 hereof. Purchaser and Parent have agreed that, unless
previously approved by the Company in writing, no change in the Offer may be
made which decreases the price per Share payable in the Offer, which changes the
forms of consideration to be paid in the Offer, which reduces the maximum number
of Shares to be purchased in the Offer or the Minimum Condition, which imposes
conditions to the Offer in addition to those set forth in Section 14 hereof or
modifies those set forth in Section 14 hereof or which amends any other term of
the Offer in a manner adverse to the holders of the Shares. The Merger Agreement
provides that Purchaser is required to extend the Offer at any time up to
November 30, 1994 if the Regulatory Approval Condition has not been satisfied or
waived; provided that (i) such extension must be for a reasonable amount of time
in light of the circumstances related to satisfying such condition, (ii) any
extension made before August 10, 1994 may not extend the Offer beyond August 24,
1994, (iii) unless waived in writing by the Company, any extension made on or
after August 10, 1994 may not be for a period in excess of 10 Business Days and
(iv) Purchaser shall, if permitted by applicable law, amend the Offer to cause
the Offer to expire on a date not more than 10 Business Days from the date the
Regulatory Approval Condition is met or waived if the Offer has been extended
and is not due to expire within 15 Business Days of the receipt of such approval
or waiver.

The Merger. The Merger Agreement provides that, subject to the terms and
conditions thereof, and in accordance with Michigan Law and Delaware Law, at the
Effective Time, Purchaser shall be merged with and into the Company. As a result
of the Merger, the separate corporate existence of Purchaser will cease and the
Company will continue as the Surviving Corporation and will become an indirect
wholly owned subsidiary of

16
<PAGE> 19

Parent. Upon consummation of the Merger, each issued and then outstanding Share
(other than any Shares held in the treasury of the Company, or owned by
Purchaser, Parent or any direct or indirect wholly owned subsidiary of Parent or
of the Company) shall be cancelled and converted automatically into the right to
receive the Merger Consideration.

Pursuant to the Merger Agreement, each share of common stock, par value
$.01 per share, of Purchaser issued and outstanding immediately prior to the
Effective Time shall be converted into one share of common stock, par value
$2.50 per share, of the Surviving Corporation.

The Merger Agreement provides that the directors of Purchaser immediately
prior to the Effective Time will be the initial directors of the Surviving
Corporation and that the officers of the Company immediately prior to the
Effective Time will be the initial officers of the Surviving Corporation. The
Merger Agreement provides that, at the Effective Time the Restated Articles of
Incorporation of the Company will be the Articles of Incorporation of the
Surviving Corporation until thereafter amended as provided by law and such
Restated Articles of Incorporation. The Merger Agreement also provides that the
By-laws of the Company, as in effect immediately prior to the Effective Time,
will be the By-laws of the Surviving Corporation until thereafter amended as
provided by law, the Restated Articles of Incorporation of the Surviving
Corporation and such By-laws.

Agreements of Parent, Purchaser and the Company. Pursuant to the Merger
Agreement, the Company shall, if required by applicable law in order to
consummate the Merger, duly call, give notice of, convene and hold a special
meeting of its shareholders as soon as practicable following consummation of the
Offer for the purpose of considering and taking action on the Merger Agreement
and the transactions contemplated thereby (the "Shareholders' Meeting"). If
Purchaser acquires at least a majority of the outstanding Shares, Purchaser will
have sufficient voting power to approve the Merger, even if no other shareholder
votes in favor of the Merger.

The Merger Agreement provides that the Company shall, if required by
applicable law in order to consummate the Merger, as soon as practicable
following consummation of the Offer, file with the Commission under the Exchange
Act, and use all reasonable efforts to have cleared by the Commission, a proxy
statement and related proxy materials (the "Proxy Statement") with respect to
the Shareholders' Meeting and cause the Proxy Statement to be mailed to
shareholders of the Company at the earliest practicable time. The Company has
agreed, subject to its fiduciary duties to the Company's shareholders under
applicable law after consultation with independent legal counsel, to include in
the Proxy Statement the unanimous recommendation of the Board that the
shareholders of the Company approve and adopt the Merger Agreement and the
transactions contemplated thereby and to use all reasonable efforts to obtain
such approval and adoption. Parent and Purchaser have agreed to cause all Shares
then owned by them and their affiliates to be voted in favor of approval and
adoption of the Merger Agreement and the transactions contemplated thereby. The
Merger Agreement provides that, in the event that Purchaser shall acquire at
least 90 percent of the then outstanding Shares, Parent, Purchaser and the
Company agree, at the request of Purchaser, to take all necessary and
appropriate action to cause the Merger to become effective as soon as reasonably
practicable after such acquisition, without a meeting of the Company's
shareholders, in accordance with Michigan Law and Delaware Law.

Pursuant to the Merger Agreement, the Company has covenanted and agreed
that, between the date of the Merger Agreement and the Effective Time, unless
Parent shall otherwise agree in writing and except as otherwise contemplated by
the Merger Agreement, the Company and each of its subsidiaries (collectively,
the "Subsidiaries" and, individually, a "Subsidiary") shall conduct its
operations according to its ordinary and usual course of business consistent
with past practice and, to the extent consistent therewith, with no less
diligence and effort than would be applied in the absence of the Merger
Agreement, seek to preserve intact its current business organization, to keep
available the services of its current officers and employees and to preserve its
relationships with customers, suppliers and others having business dealings with
it to the end that goodwill and ongoing businesses shall not be impaired in any
material respect at the Effective Time. The Merger Agreement provides that,
without limiting the generality of the foregoing, and except as otherwise
permitted in the Merger Agreement, neither the Company nor any of the
Subsidiaries will, without the prior

17
<PAGE> 20

written consent of Parent: (i) except for a maximum of 1,705,537 Shares to be
issued as required pursuant to the terms of the Company's Stock Ownership
Program (or its predecessor plans), Retirement Investment Plan or Employee Stock
Ownership Plan, issue, sell, grant, dispose of, pledge or otherwise encumber, or
authorize or propose the issuance, sale, disposition or pledge or other
encumbrance of (A) any additional shares of capital stock of any class
(including the Shares), or any securities or rights convertible into,
exchangeable for, or evidencing the right to subscribe for any shares of capital
stock, or any rights, warrants, options (including the grant of any options
under the current Stock Plans), calls, commitments or any other agreements of
any character to purchase or acquire any shares of capital stock or any
securities or rights convertible into, exchangeable for, or evidencing the right
to subscribe for, any shares of capital stock, or any other ownership interest
(including, without limitation, any phantom interest), or (B) any other
securities in respect of, in lieu of, or in substitution for, Shares outstanding
on the date of the Merger Agreement; (ii) except as required pursuant to the
terms of the Company's stock-based employee benefit plans, redeem, purchase or
otherwise acquire, or propose to redeem, purchase or otherwise acquire, any of
its outstanding Shares; (iii) split, combine, subdivide or reclassify any Shares
or declare, set aside for payment or pay any dividend, or make any other actual,
constructive or deemed distribution, whether in cash, stock, property or
otherwise, in respect of any Shares or otherwise make any payments to
shareholders in their capacity as such, other than the declaration and payment
of regular quarterly cash dividends not to exceed $.215 per share in accordance
with past dividend policy and except for dividends by a wholly owned subsidiary
of the Company; (iv) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any Subsidiary not constituting an inactive
Subsidiary (other than the Merger); (v) adopt any amendments to its Restated
Articles of Incorporation or By-Laws or alter through merger, liquidation,
reorganization, restructuring or in any other fashion the corporate structure or
ownership of any Subsidiary not constituting an inactive Subsidiary; (vi) make
any material acquisition, by means of merger, consolidation or otherwise, or
material disposition, of assets or securities; (vii) incur any indebtedness for
borrowed money or guarantee any such indebtedness or make any loans, advances or
capital contributions to, or investments in, any other person, other than to the
Company or any wholly owned subsidiary of the Company, except for the incurrence
of (A) short term indebtedness in the ordinary course of business consistent
with past practice and (B) up to $10 million of indebtedness related to the
construction of the Company's new plant in Costa Rica; (viii) grant any
increases in the compensation of any of its directors, officers or key
employees, except in the ordinary course of business consistent with past
practice or as may be approved on a case by case basis by a designated
representative of Parent; (ix) pay or agree to pay any pension, retirement
allowance, severance or other employee benefit not required or contemplated by
any of the existing benefit, severance, termination, pension or employment
plans, agreements or arrangements as in effect on the date of the Merger
Agreement to any such director or officer, whether past or present; (x) enter
into any new or amend any existing employment or severance or termination
agreement with any such director or officer; (xi) except in the ordinary course
of business consistent with past practice or as may be required to comply with
applicable law, become obligated under any new pension plan, welfare plan,
multiemployer plan, employee benefit plan, severance plan, benefit arrangement,
or similar plan or arrangement, which was not in existence on the date of the
Merger Agreement, or amend any such plan or arrangement in existence on the date
of the Merger Agreement if such amendment would have the effect of materially
enhancing any benefits thereunder; (xii) make any capital expenditures or
commitments for any capital expenditures, other than capital expenditures or
commitments for any capital expenditures in amounts consistent with the
Company's fiscal 1995 budget; (xiii) make any material changes in its customary
methods of marketing, distributing or licensing; (xiv) take, or agree or commit
to take, any action that would make any representation or warranty of the
Company contained in the Merger Agreement inaccurate in any respect at, or as of
any time prior to, the Effective Time; or (xv) authorize, recommend, propose or
announce an intention to do any of the foregoing, or enter into any contract,
agreement, commitment or arrangement to do any of the foregoing.

The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer, and from time to time thereafter, Purchaser
shall be entitled to designate up to such number of directors, rounded up to the
next whole number, on the Board as shall give Purchaser representation on the
Board equal to the product of the total number of directors on the Board (giving
effect to the directors elected

18
<PAGE> 21

pursuant to this sentence), multiplied by the percentage that the aggregate
number of Shares beneficially owned by Purchaser or any affiliate of Purchaser
following such purchase bears to the total number of Shares then outstanding,
and the Company shall, at such time, promptly use all reasonable efforts to
cause Purchaser's designees to be elected as directors of the Company, including
increasing the size of the Board or securing (to the extent possible) the
resignations of incumbent directors or both. The Merger Agreement also provides
that, at such times, the Company shall use all reasonable efforts to cause
persons designated by Purchaser to constitute the same percentage as persons
designated by Purchaser shall constitute of the Board of (i) each committee of
the Board, (ii) each board of directors of each domestic Subsidiary and (iii)
each committee of each such board, in each case only to the extent permitted by
applicable law or the rules of any stock exchange on which the Shares are
listed. Notwithstanding the foregoing, until the earlier of (i) the time
Purchaser acquires a majority of the then outstanding Shares on a fully diluted
basis and (ii) the Effective Time, the Company has agreed to use all reasonable
efforts to ensure that all the members of the Board and each committee of the
Board and such boards and committees of the domestic Subsidiaries as of the date
of the Merger Agreement who are not employees of the Company shall remain
members of the Board and of such boards and committees. The Company's obligation
to appoint Purchaser's designees to the Board is subject to Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder.

The Merger Agreement provides that following the election of Purchaser's
designees in accordance with the immediately preceding paragraph and prior to
the Effective Time, any amendment of the Merger Agreement or the Restated
Articles of Incorporation or By-laws of the Company, any termination of the
Merger Agreement by the Company, any extension by the Company of the time for
the performance of any of the obligations or other acts of Parent or Purchaser
or waiver of any of the Company's rights thereunder, will require the
concurrence of a majority of the directors of the Company then in office who are
directors on the date of the Merger Agreement or persons designated by such
directors and neither were designated by Purchaser nor are employees of the
Company ("Continuing Directors"). Prior to the Effective Time, the Company and
Purchaser will use all reasonable efforts to ensure that the Board at all times
includes at least three Continuing Directors.

Pursuant to the Merger Agreement, upon reasonable notice until the
Effective Time, the Company shall, and shall cause the Subsidiaries to, afford
the officers, directors, employees, counsel, accountants and other authorized
representatives of Parent ("Representatives"), in order to evaluate the
transactions contemplated by the Merger Agreement, reasonable access during
normal business hours to its properties, officers, directors, employees,
counsel, accountants and other representatives, books and records and, during
such period, shall (and shall cause the Subsidiaries to) furnish promptly to
such Representatives all information concerning its business, properties and
personnel and all financial, operating and other data and information as they
may reasonably request, and Parent has agreed that it will not, and will cause
its Representatives not to, use any information obtained pursuant to this
paragraph for any purpose unrelated to the consummation of the transactions
contemplated by the Merger Agreement.

The Company has agreed that the Company and the Subsidiaries and their
respective officers, directors and employees shall immediately cease any
existing discussions or negotiations with any parties other than Purchaser and
Parent with respect to any proposal or offer for a merger, asset acquisition or
other business combination or any proposal or offer to acquire a significant
equity interest in, or a significant portion of the assets of, the Company.
However, the Merger Agreement provides that the Company may, directly or
indirectly, furnish information and access, in each case only in response to
requests which were not solicited by the Company after the date of the Merger
Agreement, to any corporation, partnership, person or other entity or group
pursuant to confidentiality agreements, and may participate in discussions and
negotiate with such person, entity or group concerning any merger, sale of
assets, sale of shares of capital stock or similar transactions involving the
Company or any Subsidiary or division of the Company, if such entity or group
has submitted a bona fide written proposal to the Board relating to any such
transaction which the Board reasonably determines represents a superior
transaction to the Offer and the Merger, and if in the opinion of the Board
after consultation with independent legal counsel, the failure to provide such
information or access or to engage in such discussions or negotiations would be
inconsistent with their fiduciary duties to the Company's shareholders under
applicable law. The Company has also agreed to notify Parent immediately if

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<PAGE> 22

any such request or proposal, or any inquiry or contact with any person with
respect thereto, is made and shall keep Parent apprised of all developments
which could reasonably be expected to culminate in the Board withdrawing,
modifying or amending its recommendation of the Offer, the Merger and the other
transactions contemplated by the Merger Agreement. The Company has also agreed
not to release any third party from, or waive any provision of, any
confidentiality or standstill agreement to which the Company is a party unless,
in the opinion of the Board after consultation with independent legal counsel,
the failure to provide such release or waiver would be inconsistent with their
fiduciary duties to the Company's shareholders under applicable law.

The Merger Agreement provides that after the Effective Time, each option to
purchase Shares (an "Option" ) which has been granted under the Company's Stock
Ownership Program or any predecessor plans thereto and is outstanding at the
Effective Time, whether or not then exercisable, will be exchanged for, and the
holder of each such Option will be entitled to receive upon surrender of such
Option for cancellation, cash equal to the difference between the Merger
Consideration and the exercise price of each such Option, multiplied by the
number of Shares covered by such Option.

Parent has agreed that for a period of at least two years after the
Effective Time, Parent shall cause the Surviving Corporation to continue to
maintain the Company's existing compensation, severance, welfare and pension
benefit plans, programs and arrangements (other than any stock based plans,
programs and arrangements for which alternative incentive compensation plans
will be developed during the one year period following the Effective Time, as
described below) for the benefit of current and former employees of the Company
and its subsidiaries, subject to certain modifications as may be required by
applicable law or to maintain the tax exempt status of any such plan. However,
the Merger Agreement provides that (i) nothing therein shall prohibit Parent
from replacing any such existing plans, programs or arrangements with plans,
programs or arrangements which provide such employees with benefits which are
not less favorable in the aggregate than the benefits that would have been
provided under the Company's existing plans, programs or arrangements to the
extent such replacement is permitted under the terms of the applicable plan,
program or arrangement and (ii) nothing therein shall obligate Parent to provide
such employees with any stock based compensation (including, without limitation,
stock options or stock appreciation rights) after the Effective Time. Parent has
further agreed to develop during the one year period following the Effective
Time a new performance based incentive compensation plan for the benefit of
employees of the Surviving Corporation and its subsidiaries as an appropriate
substitute for the Company's current stock based plans, programs and
arrangements.

The Merger Agreement provides that all service credited to each employee by
the Company through the Effective Time shall be recognized by Parent for all
purposes, including for purposes of eligibility, vesting and benefit accruals
under any employee benefit plan provided by Parent for the benefit of employees,
except that, to the extent necessary to avoid duplication of benefits, amounts
payable under employee benefit plans provided by Parent may be reduced by
amounts payable under similar Company plans with respect to the same periods of
service.

The Merger Agreement further provides that the Articles of Incorporation
and By-laws of the Surviving Corporation shall contain provisions no less
favorable with respect to indemnification than are set forth in the Restated
Articles of Incorporation and By-laws of the Company on the date of the Merger
Agreement, which provisions shall not be amended, repealed or otherwise modified
for a period of six years from the Effective Time in any manner that would
adversely affect the rights thereunder of individuals who at any time prior to
the Effective Time were directors or officers of the Company in respect of
actions or omissions occurring at or prior to the Effective Time (including,
without limitation, the transactions contemplated by the Merger Agreement),
unless such modification shall be required by law.

The Merger Agreement provides that Parent shall cause to be maintained in
effect for not less than three years from the Effective Time the current
directors' and officers' liability insurance policies maintained by the Company
and the Subsidiaries with respect to matters occurring at or prior to the
Effective Time; provided, however, that in no event shall the Surviving
Corporation be required to expend more than an amount per year

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<PAGE> 23

equal to 200% of the current annual premiums paid by the Company for such
insurance (which premiums the Company has represented and warranted to Parent
and Purchaser to be $251,800 in the aggregate).

Parent, Purchaser and the Company have also agreed that in the event the
Company or the Surviving Corporation or any of their respective successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, then, and in each such case, proper provision shall be made so
that the successors and assigns of the Company or the Surviving Corporation, as
the case may be, or at Parent's option, Parent, shall assume the foregoing
indemnity obligations.

The Merger Agreement provides that, subject to its terms and conditions,
each of the parties thereto shall use all reasonable efforts to take, or cause
to be taken, all action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by the Merger Agreement, including using
all reasonable efforts to obtain all necessary or appropriate waivers, consents
and approvals, and to effect all necessary registrations, filings and
submissions (including, but not limited to, (i) filings under the HSR Act and
any other submissions requested by the FTC or the Antitrust Division, (ii)
filings and consents required under the Insurance Law and any filings or
consents which may be required under the insurance laws of any other state in
which Gerber Life does business and (iii) such filings, consents, approvals,
orders, registrations and declarations as may be required under the laws of any
foreign country in which the Company or any of the Subsidiaries conducts any
business or owns any assets) and to lift any injunction or other legal bar to
the Merger (and, in such case, to proceed with the Merger as expeditiously as
possible), subject, however, to the requisite votes of the shareholders of any
or all of the Company, Purchaser and Parent. Notwithstanding the foregoing, the
Company shall not be obligated to use all reasonable efforts or take any action
pursuant to the above described provisions if, in the opinion of the Board after
consultation with independent legal counsel, such actions would be inconsistent
with their fiduciary duties to the Company's shareholders under applicable law.

Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including,
without limitation, representations by the Company as to the absence of certain
changes or events concerning the Company's business, compliance with law,
litigation, employee benefit plans and taxes.

Conditions to the Merger. Under the Merger Agreement, the respective
obligations of each party to effect the Merger are subject to the satisfaction
at or prior to the Effective Time of the following conditions: (a) if required
for the consummation of the Merger, the Merger Agreement and the transactions
contemplated thereby shall have been duly approved by the shareholders of the
Company in accordance with applicable law and the Company's Restated Articles of
Incorporation; (b) there shall not be in effect any statute, rule, regulation,
executive order, decree, ruling or injunction or other order of a court or
governmental or regulatory agency of competent jurisdiction directing that the
transactions contemplated by the Merger Agreement not be consummated or which
has the effect of making the acquisition of Shares by Purchaser illegal;
provided, however, that prior to invoking this condition each party shall use
its reasonable efforts to have any such decree, ruling, injunction or order
vacated; (c) all governmental consents, orders and approvals legally required
for the consummation of the Merger and the transactions contemplated by the
Merger Agreement shall have been obtained and be in effect (including, but not
limited to, the approval of the Superintendent and any approvals which may be
required under the insurance laws of any state in which Gerber Life does
business and such approvals and consents as may be required under the laws of
any foreign country in which the Company or any Subsidiary conducts any business
or owns any assets), except where the failure to obtain any such consent would
not reasonably be expected to have a Material Adverse Effect (as defined in the
Merger Agreement) on Parent (assuming the Merger had taken place), and the
waiting periods under the HSR Act shall have expired or been terminated; and (d)
Purchaser shall have purchased Shares pursuant to the Offer.

Termination; Fees and Expenses. The Merger Agreement provides that it may
be terminated and the Offer and the Merger may be abandoned at any time prior to
the Effective Time: (a) by the mutual written

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<PAGE> 24

consent of Parent and the Company; (b) by either Parent or the Company if (i)
any court of competent jurisdiction in the United States or some other
governmental body or regulatory authority issues an order, decree or ruling or
takes any other action permanently restraining, enjoining or otherwise
prohibiting the Merger and such order, decree, ruling or other action becomes
final and nonappealable or (ii) Purchaser does not purchase Shares pursuant to
the Offer on or prior to November 30, 1994 (provided that the right to terminate
the Merger Agreement pursuant to clause (b) is not available to any party whose
failure to fulfill any of its obligations under the Merger Agreement results in
such failure to purchase); or (c) by the Company if (i) Purchaser (x) fails to
commence the Offer within five days following the date of the initial public
announcement of the Offer or (y) terminates the Offer prior to the purchase of
the Shares pursuant to the Offer, (ii) Purchaser or Parent fails to perform in
any material respect any of their material obligations under the Merger
Agreement to be performed at or prior to such date of termination, which failure
to perform is incapable of being cured by November 30, 1994, (iii) any
representation or warranty of Purchaser or Parent contained in the Merger
Agreement is or becomes untrue or incorrect (except for changes permitted by the
Merger Agreement and those representations which address matters only as of a
particular date that remain true and correct as of such date), except, in any
case, such failures to be true and correct which are not reasonably likely to
adversely effect Parent's or Purchaser's ability to complete the Offer or the
Merger, which failure to be true and correct is incapable of being cured prior
to November 30, 1994, or (iv) the Board withdraws or materially modifies or
changes its recommendation of the Merger Agreement, the Offer or the Merger in
order to approve the execution by the Company of a definitive agreement relating
to a proposal or offer for a merger, asset acquisition or other business
combination or any proposal or offer to acquire a significant equity interest
in, or a significant portion of the assets of, the Company or any Subsidiary,
with any person other than Parent or Purchaser (an "Acquisition Proposal"), and
the Board after consultation with independent legal counsel determines that the
failure to take such action would be inconsistent with its fiduciary duties to
the Company's shareholders under applicable law. In addition, the Merger
Agreement provides that Parent may terminate the Merger Agreement and the Offer
and abandon the Merger at any time prior to the purchase of Shares pursuant to
the Offer by Purchaser if (i) the Company fails to perform in any material
respect any of its material obligations under the Merger Agreement to be
performed at or prior to such date of termination, which failure to perform is
incapable of being cured by November 30, 1994, (ii) any representation or
warranty of the Company contained in the Merger Agreement is or becomes untrue
or incorrect (except for changes permitted by the Merger Agreement and those
representations which address matters only as of a particular date that remain
true and correct as of such date), except, in any case, such failures to be true
and correct which are not reasonably likely to have a Material Adverse Effect
(as defined in the Merger Agreement) on the Company, which failure to be true
and correct is incapable of being cured prior to November 30, 1994, (iii) an
Acquisition Proposal exists and the Board withdraws or materially modifies or
changes (including by amendment of the Schedule 14D-9) its recommendation of the
Merger Agreement, the Offer or the Merger in a manner adverse to Parent or
Purchaser (provided that a statement by the Board that it is neutral or unable
to take a position with respect to the Offer, the Merger Agreement or the Merger
shall not be deemed to constitute a withdrawal, modification or change of its
recommendation of the Offer, the Merger Agreement or the Merger) or (iv) the
Board recommends to the shareholders of the Company an Acquisition Proposal.

In the event of the termination of the Merger Agreement, the Merger
Agreement provides that it shall forthwith become void and have no effect and
there shall be no liability thereunder on the part of any party thereto or its
affiliates, directors, officers or shareholders, except under the provisions of
the Merger Agreement related to fees and expenses described below and under
certain other provisions of the Merger Agreement which survive termination.

The Merger Agreement provides that in the event that the Merger Agreement
is terminated (a) by either Parent or the Company, if Purchaser fails to
purchase Shares pursuant to the Offer on or prior to November 30, 1994, and at
the time of such termination (i) the Minimum Condition had not been satisfied
and (ii) an Acquisition Proposal existed, (b) by Parent prior to the purchase of
Shares pursuant to the Offer by Purchaser if an Acquisition Proposal exists and
the Board withdraws or materially modifies or changes (including by amendment of
the Schedule 14D-9) its recommendation of the Merger Agreement, the Offer or the
Merger in a manner adverse to Parent or Purchaser, (c) by Parent prior to the
purchase of Shares

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<PAGE> 25

pursuant to the Offer by Purchaser if the Board recommends to the shareholders
of the Company an Acquisition Proposal or (d) by the Company if the Board
withdraws or materially modifies or changes its recommendation of the Merger
Agreement, the Offer or the Merger in order to approve the execution by the
Company of a definitive agreement relating to an Acquisition Proposal, the
Company shall pay to Parent an amount equal to $70 million.

The Merger Agreement also provides that in the event that the Merger
Agreement is terminated by Parent prior to the purchase of Shares by Purchaser
pursuant to the Offer as a result of a breach of a representation or warranty by
the Company, or a failure by the Company to perform an obligation in the Merger
Agreement, the Company shall reimburse Parent and Purchaser for up to $15
million, in the aggregate, of their actual out of pocket expenses incurred in
connection with the Merger Agreement and the Offer (including, without
limitation, legal fees, financial advisor fees, financing commitment fees and
printer fees).

Except as described in the preceeding paragraph, all costs and expenses
incurred in connection with the Merger Agreement and the transactions
contemplated thereby shall be paid by the party incurring such costs and
expenses, whether or not the Offer and the Merger are consummated.

THE RIGHTS AGREEMENT

On July 25, 1990, the Board declared a dividend distribution of one Right
for each outstanding share of Common Stock to shareholders of record at the
close of business on August 13, 1990. The following description of the Rights is
taken from the Rights Agreement (and the exhibits thereto) filed as an exhibit
to the Company's Registration Statement on Form 8-A, dated July 26, 1990 (the
"Form 8-A"), and is qualified in its entirety by reference to such Form 8-A.

Each Right issued pursuant to the Rights Agreement entitles the registered
holder to purchase from the Company a unit consisting of one one-hundredth of a
share (a "Unit") of Series A Junior Participating Preferred Stock ("Preferred
Stock"), at a Purchase Price of $180 per Unit, subject to adjustment.

The Rights were initially attached to all Common Stock certificates
representing shares outstanding on the dividend distribution date, and no
separate Rights Certificates (as defined in the Rights Agreement) were
distributed. As a result of the Company's two-for-one stock split on August 5,
1992, one-half Right is presently attached to each outstanding Share. The Rights
will separate from the Common Stock and a Distribution Date (as defined in the
Rights Agreement) will occur upon the earlier of (i) 10 days following a public
announcement that an Acquiring Person (as defined in the Rights Agreement) has
acquired, or obtained the right to acquire, beneficial ownership of 15% or more
of the outstanding Common Stock, (ii) 10 business days (or such later date as
the Board determines) following the commencement of a tender offer or exchange
offer that would result in a person or group beneficially owning 15% or more of
such outstanding Common Stock or (iii) 10 business days after the Board declares
any person to be an Adverse Person (as defined in the Rights Agreement). In
order to declare any Person to be an Adverse Person the Board must determine
that such person, alone or together with its affiliates and associates, has
become the Beneficial Owner (as defined in the Rights Agreement) of an amount of
Common Stock which the Board determines to be substantial (which amount may in
no event be less than 10% of the Common Stock then outstanding) and, after
reasonable inquiry and investigation, including consultation with such persons
as such directors deem appropriate, that (a) such beneficial ownership by such
person is intended to cause the Company to repurchase the Common Stock
beneficially owned by such person or to cause pressure on the Company to take
action or enter into a transaction or series of transactions intended to provide
such person with short-term financial gains under circumstances where the Board
determines that the best long-term interests of the Company and its shareholders
would not be served by taking such action or entering into such transaction or
series of transactions at that time or (b) such beneficial ownership is causing
or reasonably likely to cause a material adverse impact (including, but not
limited to, impairment of relationships with customers or impairment of the
Company's ability to maintain its competitive position) on the business or
prospects of the Company.

Until the Distribution Date, (i) the Rights are evidenced by the Common
Stock certificates and may be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued

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<PAGE> 26

after August 13, 1990 contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any certificates for Common
Stock outstanding will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificates. Pursuant to the Rights
Agreement, the Company reserved the right to require prior to the occurrence of
a Triggering Event (as defined below) that, upon any exercise of Rights, a
number of Rights be exercised so that only whole shares of Preferred Stock are
issued.

The Rights are not exercisable until the Distribution Date and expire at
the close of business on August 12, 2000, unless earlier redeemed by the Company
as described below.

As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. All Common Stock issued prior to
the Distribution Date will be issued with Rights. Common Stock issued after the
Distribution Date will be issued with Rights if such shares are issued pursuant
to the exercise of stock options or under an employee benefit plan, or upon the
conversion of securities issued after adoption of the Rights Agreement. Except
as otherwise determined by the Board, no other Common Stock issued after the
Distribution Date will be issued with Rights.

In the event that (i) a Person becomes the beneficial owner of more than
15% of the then outstanding Common Stock (except pursuant to an offer for all
outstanding Common Stock which the independent directors determine to be fair to
and otherwise in the best interests of the Company and its shareholders) or (ii)
the Board declares a person to be an Adverse Person, following the Distribution
Date, each holder of a Right will thereafter have the right to receive, upon
exercise, Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the Exercise Price
(as defined below) of the Right. The "Exercise Price" is the Purchase Price (as
defined in the Rights Agreement) multiplied by the number of Units issuable upon
exercise of a Right prior to any of the events described in this paragraph
(initially, one). Notwithstanding any of the foregoing, following the occurrence
of any of the events set forth in this paragraph, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person or Adverse Person will be null and void. However,
Rights are not exercisable following the occurrence of any of the events set
forth above until such time as the Rights are no longer redeemable by the
Company as set forth below.

In the event that, at any time following the Stock Acquisition Date (as
defined in the Rights Agreement), (i) the Company is acquired in a share
exchange, merger or other business combination transaction (other than a merger
which follows an offer described in the preceding paragraph) or (ii) 50% or more
of the Company's assets or earning power is sold or transferred, each holder of
a Right (except Rights which previously have been voided as set forth above)
thereafter has the right to receive, upon exercise, common shares of the
acquiring company having a value equal to two times the exercise price of the
Right. The events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events".

The Purchase Price payable, and the number of Units of Preferred Stock or
other securities or property issuable, upon exercise of the Rights is subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (ii) if holders of the Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or convertible securities at less than
the current market price of the Preferred Stock or (iii) upon the distribution
to holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).

With certain exceptions, no adjustment in the Purchase Price is required
until cumulative adjustments amount to at least 1% of the Purchase Price. No
fractional Units will be issued and, in lieu thereof, an adjustment in cash will
be made based on the market price of the Preferred Stock on the last trading
date prior to the date of exercise.

At any time until thirty days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right (payable, at the election of the Company, in cash,

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<PAGE> 27

Common Stock or such other consideration as the Board may determine).
Immediately upon the action of the Board ordering redemption of the Rights the
Rights will terminate and the only right of the holders of Rights will be to
receive the $.01 redemption price.

Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.

Other than those provisions relating to the principal economic terms of the
Rights, any of the provisions of the Rights Agreement may be amended by the
Board prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board in order to cure
any ambiguity, defect or inconsistency, to make changes which do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person or Adverse Person), or to shorten or lengthen any time period
under the Rights Agreement, except that no amendment to adjust the time period
governing redemption may be made at such time as the Rights are not redeemable.

Since (i) the Offer is an offer to purchase all of the outstanding Shares
and the Board has unanimously determined that the Offer is fair to and in the
best interests of the Company and its shareholders and (ii) on May 21, 1994, the
Company amended the Rights Agreement to provide that neither the execution of
the Merger Agreement, the commencement of the Offer nor the beneficial ownership
of Shares by Purchaser pursuant to the Merger Agreement shall cause a
Distribution Date to occur unless and until the Board resolves otherwise, the
acquisition of Shares pursuant to the Offer or the consummation of the Merger
will not (a) cause the Distribution Date to occur or (b) give rise to a
Triggering Event.

11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY AFTER THE OFFER AND THE
MERGER.

Purpose of the Offer. The purpose of the Offer and the Merger is for
Parent to acquire control of, and the entire equity interest in, the Company.
The purpose of the Merger is for Parent to acquire all Shares not purchased
pursuant to the Offer. Upon consummation of the Merger, the Company will become
an indirect wholly owned subsidiary of Parent. The Offer is being made pursuant
to the Merger Agreement.

Under Michigan Law, the approval of the Board and the affirmative vote of
the holders of a majority of the outstanding Shares is required to approve and
adopt the Merger Agreement and the transactions contemplated thereby, including
the Merger. The Board of Directors of the Company has unanimously approved and
adopted the Merger Agreement and the transactions contemplated thereby, and,
unless the Merger is consummated pursuant to the short-form merger provisions
under Michigan Law described below, the only remaining required corporate action
of the Company is the approval and adoption of the Merger Agreement and the
transactions contemplated thereby by the affirmative vote of the holders of a
majority of the Shares. Accordingly, if the Minimum Condition is satisfied,
Purchaser will have sufficient voting power to cause the approval and adoption
of the Merger Agreement and the transactions contemplated thereby without the
affirmative vote of any other shareholder of the Company.

In the Merger Agreement, the Company has agreed to take all action
necessary to convene a meeting of its shareholders as soon as practicable after
the consummation of the Offer for the purpose of considering and taking action
on the Merger Agreement and the transactions contemplated thereby, if such
action is required by Michigan Law in order to consummate the Merger. Parent and
Purchaser have agreed that all Shares owned by them and their subsidiaries will
be voted in favor of the Merger Agreement and the transactions contemplated
thereby.

If Purchaser purchases Shares pursuant to the Offer, the Merger Agreement
provides that Purchaser will be entitled to designate representatives to serve
on the Board in proportion to Purchaser's ownership of Shares following such
purchase; provided, however, that the Company and Purchaser have agreed to use
all reasonable efforts to ensure that at all times prior to the Effective Time
the Board shall include at least three directors who were directors on the date
of the Merger Agreement or persons designated by such directors and

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<PAGE> 28

neither were designated by Purchaser nor are employees of the Company. See
Section 10. Purchaser expects that such representation would permit Purchaser to
exert substantial influence over the Company's conduct of its business and
operations.

Under Michigan Law, if Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the outstanding Shares, Purchaser will be able to
approve the Merger without a vote of the Company's shareholders. In such event,
Parent, Purchaser and the Company have agreed in the Merger Agreement to take,
at the request of Purchaser, all necessary and appropriate action to cause the
Merger to become effective as soon as reasonably practicable after such
acquisition, without a meeting of the Company's shareholders. If, however,
Purchaser does not acquire at least 90% of the outstanding Shares pursuant to
the Offer or otherwise and a vote of the Company's shareholders is required
under Delaware Law, a significantly longer period of time would be required to
effect the Merger.

The Commission has adopted Rule 13e-3 under the Exchange Act which is
applicable to certain "going private" transactions and which may under certain
circumstances be applicable to the Merger or another business combination
following the purchase of Shares pursuant to the Offer in which Purchaser seeks
to acquire the remaining Shares not held by it. Purchaser believes, however,
that Rule 13e-3 will not be applicable to the Merger. Rule 13e-3 requires, among
other things, that certain financial information concerning the Company and
certain information relating to the fairness of the proposed transaction and the
consideration offered to minority shareholders in such transaction, be filed
with the Commission and disclosed to shareholders prior to consummation of the
transaction.

Appraisal Rights. No appraisal rights are available in connection with the
Offer and the Merger. Michigan Law provides that there shall be no right of
dissent in favor of holders of shares of any class or series in connection with
a merger in which shareholders receive cash in exchange for their shares, except
in certain situations which Purchaser believes would not be applicable to the
Merger.

Plans for the Company. It is expected that, initially following the
Merger, the business and operations of the Company will, except as set forth in
this Offer to Purchase, be continued by the Company substantially as they are
currently being conducted. Parent is committed to the continued expansion of the
"Gerber" SUPERBRAND worldwide and intends to share with the Company the full
benefit of its extensive worldwide marketing expertise and unique knowledge of
certain key markets. Parent intends to maintain the Company's headquarters at
Fremont, Michigan under the leadership of existing senior management to function
as the base for Parent's North American consumer food business and as the center
of excellence for its worldwide infant and baby food operations. In addition,
Parent will continue to evaluate the business and operations of the Company
during the pendency of the Offer and after the consummation of the Offer and the
Merger and will take such further actions as it deems appropriate under the
circumstances then existing.

Except as indicated in this Offer to Purchase, Parent does not have any
present plans or proposals which relate to or would result in an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Company or any Subsidiary, a sale or transfer of a material amount
of assets of the Company or any Subsidiary or any material change in the
Company's capitalization or dividend policy or any other material changes in the
Company's corporate structure or business, or the composition of the Board or
the Company's management.

12. DIVIDENDS AND DISTRIBUTIONS. The Merger Agreement provides that the
Company shall not, between the date of the Merger Agreement and the Effective
Time, without the prior written consent of Parent, (a) except for a maximum of
1,705,537 Shares to be issued pursuant to the terms of the Company's Stock
Ownership Program (or its predecessor plans), Retirement Investment Plan or
Employee Stock Ownership Plan, issue, sell, grant, dispose of, pledge or
otherwise encumber, or authorize or propose the issuance, sale, disposition,
pledge or other encumbrance of (i) any additional shares of capital stock of any
class (including the Shares) or any securities or rights convertible into,
exchangeable for, or evidencing the right to subscribe for any shares of capital
stock, or any rights, warrants, options (including the grant of any options
under the current Stock Plans), calls, commitments or any other agreements of
any character to purchase or acquire any shares of capital stock or any
securities or rights convertible into, exchangeable for or evidencing the right
to subscribe for, any shares of capital stock, or any other ownership interest
(including,

26
<PAGE> 29

without limitation, any phantom interest), of the Company, or (ii) any other
securities in respect of, in lieu of, or in substitution for, Shares outstanding
on the date hereof; (b) except as required pursuant to the terms of the
Company's stock-based employee benefit plans, redeem, purchase or otherwise
acquire, or propose to redeem, purchase or otherwise acquire, any of its
outstanding Shares; or (c) split, combine, subdivide or reclassify any Shares or
declare, set aside for payment or pay any dividend, or make any other actual,
constructive or deemed distribution, whether in case, stock, property or
otherwise, in respect of any Shares or otherwise make any payments to
shareholders in their capacity as such, other than the declaration and payment
of regular quarterly cash dividends not to exceed $.215 per Share in accordance
with past dividend policy and except for dividends by a wholly owned subsidiary
of the Company. See Section 10. If, however, the Company should, during the
pendency of the Offer, (i) split, combine or otherwise change the Shares or its
capitalization, (ii) acquire or otherwise cause a reduction in the number of
outstanding Shares or (iii) issue or sell any additional Shares, shares of any
other class or series of capital stock, other voting securities or any
securities convertible into, or options, rights or warrants, conditional or
otherwise, to acquire, any of the foregoing, then, without prejudice to
Purchaser's rights under Section 14, Purchaser may (subject to the provisions of
the Merger Agreement) make such adjustments to the purchase price and other
terms of the Offer (including the number and type of securities to be purchased)
as it deems appropriate to reflect such split, combination or other change.

If, on or after May 21, 1994, the Company should declare or pay any
dividend on the Shares or make any other distribution (including the issuance of
additional shares of capital stock pursuant to a stock dividend or stock split,
the issuance of other securities or the issuance of rights for the purchase of
any securities) with respect to the Shares that is payable or distributable to
stockholders of record on a date prior to the transfer to the name of Purchaser
or its nominee or transferee on the Company's stock transfer records of the
Shares purchased pursuant to the Offer (other than regular quarterly cash
dividends not in excess of $.215 per Share in accordance with past dividend
policy), then, without prejudice to Purchaser's rights under Section 14, (i) the
purchase price per Share payable by Purchaser pursuant to the Offer will be
reduced (subject to the Merger Agreement) to the extent any such dividend or
distribution is payable in cash and (ii) any non-cash dividend, distribution or
right shall be received and held by the tendering stockholder for the account of
Purchaser and will be required to be promptly remitted and transferred by each
tendering stockholder to the Depositary for the account of Purchaser,
accompanied by appropriate documentation of transfer. Pending such remittance
and subject to applicable law, Purchaser will be entitled to all the rights and
privileges as owner of any such non-cash dividend, distribution or right and may
withhold the entire purchase price or deduct from the purchase price the amount
or value thereof, as determined by Purchaser in its sole discretion.

13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, EXCHANGE LISTING AND
EXCHANGE ACT REGISTRATION. The purchase of Shares by Purchaser pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
will reduce the number of holders of Shares, which could adversely affect the
liquidity and market value of the remaining Shares held by the public.

Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of the NYSE for continued listing and
may be delisted from the NYSE. Parent intends to cause the delisting of the
Shares by the NYSE following consummation of the Offer.

According to the NYSE's published guidelines, the NYSE would consider
delisting the Shares if, among other things, the number of record holders of at
least 100 Shares should fall below 1,200, the number of publicly held Shares
(exclusive of holdings of officers, directors and their families and other
concentrated holdings of 10% or more ("NYSE Excluded Holdings")) should fall
below 600,000 or the aggregate market value of publicly held Shares (exclusive
of NYSE Excluded Holdings) should fall below $5 million. The Company has advised
Purchaser that, as of May 21, 1994, there were 69,519,935 Shares outstanding,
held by approximately 11,643 holders of record. If, as a result of the purchase
of Shares pursuant to the Offer or otherwise, the Shares no longer meet the
requirements of the NYSE for continued listing and the listing of the Shares is
discontinued, the market for the Shares could be adversely affected.

If the NYSE were to delist the Shares, it is possible that the Shares would
continue to trade on another securities exchange or in the over-the-counter
market and that price or other quotations would be reported by

27
<PAGE> 30

such exchange or through the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or other sources. The extent of the public
market therefor and the availability of such quotations would depend, however,
upon such factors as the number of shareholders and/or the aggregate market
value of such securities remaining at such time, the interest in maintaining a
market in the Shares on the part of securities firms, the possible termination
of registration under the Exchange Act as described below, and other factors.
Purchaser cannot predict whether the reduction in the number of Shares that
might otherwise trade publicly would have an adverse or beneficial effect on the
market price for or marketability of the Shares or whether it would cause future
market prices to be greater or less than the Merger Consideration.

The Shares are currently "margin securities", as such term is defined under
the rules of the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), which has the effect, among other things, of allowing brokers
to extend credit on the collateral of such securities. Depending upon factors
similar to those described above regarding listing and market quotations,
following the Offer it is possible that the Shares might no longer constitute
"margin securities" for purposes of the margin regulations of the Federal
Reserve Board, in which event such Shares could no longer be used as collateral
for loans made by brokers.

The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the Commission
if the Shares are not listed on a national securities exchange and there are
fewer than 300 record holders. The termination of the registration of the Shares
under the Exchange Act would substantially reduce the information required to be
furnished by the Company to holders of Shares and to the Commission and would
make certain provisions of the Exchange Act, such as the short-swing profit
recovery provisions of Section 16(b), the requirement of furnishing a proxy
statement in connection with shareholders' meetings and the requirements of Rule
13e-3 under the Exchange Act with respect to "going private" transactions, no
longer applicable to the Shares. In addition, "affiliates" of the Company and
persons holding "restricted securities" of the Company may be deprived of the
ability to dispose of such securities pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended. If registration of the Shares under the
Exchange Act were terminated, the Shares would no longer be "margin securities"
or be eligible for NASDAQ reporting. Purchaser currently intends to seek to
cause the Company to terminate the registration of the Shares under the Exchange
Act as soon after consummation of the Offer as the requirements for termination
of registration are met.

14. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision
of the Offer, Purchaser shall not be required to accept for payment or pay for
any Shares tendered pursuant to the Offer, and may terminate or amend the Offer
and may postpone the acceptance for payment of any Shares tendered, if (i)
immediately prior to the expiration of the Offer the Minimum Condition shall not
have been satisfied, (ii) the Regulatory Approval Condition shall not have been
satisfied (subject to Purchaser's obligations to extend the Offer at any time up
to November 30, 1994 if the Regulatory Approval Condition has not been satisfied
or waived and to use all reasonable efforts to obtain approval for the Merger
from the Superintendent), (iii) any applicable waiting period under the HSR Act
shall not have expired or been terminated prior to the expiration of the Offer
or (iv) at any time on or after May 21, 1994, and prior to the acceptance for
payment of Shares, any of the following conditions shall exist:

(a) Any government entity or federal or state court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered
any statute, rule, regulation, executive order, decree, injunction or other
order which is in effect and which (i) materially restricts, prevents or
prohibits consummation of the Offer, the Merger or any transaction
contemplated by the Merger Agreement, (ii) prohibits or limits materially
the ownership or operation by the Company, Parent or any of their
subsidiaries of all or any material portion of the business or assets of
the Company and its subsidiaries taken as a whole, or compels the Company,
Parent or any of their subsidiaries to dispose of or hold separate all or
any material portion of the business or assets of the Company, and its
subsidiaries taken as a whole, (iii) imposes limitations on the ability of
Parent, Purchaser or any other subsidiary of Parent to exercise effectively
full rights of ownership of any Shares, including, without limitation, the
right to vote any Shares acquired by Purchaser pursuant to the Offer or
otherwise on all matters properly presented to the Company's shareholders,
including, without limitation, the approval and adoption of the Merger
Agreement and the transactions contemplated thereby or (iv) requires
divestiture by Parent, Purchaser or any other affiliate

28
<PAGE> 31

of Parent of any Shares; provided that Parent shall have used all
reasonable efforts to cause any such decree, judgment, injunction or other
order to be vacated or lifted;

(b) The representations and warranties of the Company (without giving
effect to any materiality qualifications) contained in the Merger Agreement
shall not be true and correct as of the date of consummation of the Offer
as though made on and as of such date except (i) for changes specifically
permitted by the Merger Agreement, (ii) that those representations and
warranties which address matters only as of a particular date shall remain
true and correct as of such date and (iii) in any case where such failure
to be true and correct would not, in the aggregate, have a Material Adverse
Effect;

(c) The Company shall not have performed or complied in all material
respects with its material obligations under the Merger Agreement to be
performed or complied with by it;

(d) The Merger Agreement shall have been terminated in accordance with
its terms;

(e) Prior to the purchase of Shares pursuant to the Offer, an
Acquisition Proposal for the Company exists and the Board shall have
withdrawn or materially modified or changed (including by amendment of the
Schedule 14D-9) in a manner adverse to Purchaser its recommendation of the
Offer, the Merger Agreement or the Merger; provided, that a statement by
the Board that it is neutral or unable to take a position with respect to
the Offer shall not be deemed to constitute a withdrawal, modification or
change of its recommendation of the Offer, the Merger Agreement or the
Merger; or

(f) (i) it shall have been publicly disclosed or Purchaser shall have
otherwise learned that any person or "group" (as defined in Section
13(d)(3) of the Exchange Act), other than Parent or its affiliates or any
group of which any of them is a member, shall have acquired beneficial
ownership (determined pursuant to Rule 13d-3 promulgated under the Exchange
Act) of more than 25% of any class or series of capital stock of the
Company (including the Shares), through the acquisition of stock, the
formation of a group or otherwise, or shall have been granted an option,
right or warrant, conditional or otherwise, to acquire beneficial ownership
of more than 25% of any class or series of capital stock of the Company
(including the Shares); or (ii) any person or group shall have entered into
a definitive agreement or agreement in principle with the Company with
respect to a merger, consolidation or other business combination with the
Company;

which, in the judgment of Purchaser in any such case, and regardless of the
circumstances (including any action or omission by Purchaser) giving rise to any
such condition, makes it inadvisable to proceed with such acceptance for payment
or payments.

The foregoing conditions are for the sole benefit of Purchaser and Parent
and may be asserted by Purchaser or Parent regardless of the circumstances
giving rise to any such condition or may be waived by Purchaser or Parent in
whole or in part at any time and from time to time in their discretion. The
failure by Purchaser or Parent at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right; the waiver of any such
right with respect to particular facts and other circumstances shall not be
deemed a waiver with respect to any other facts and circumstances; and each such
right shall be deemed an ongoing right that may be asserted at any time and from
time to time.

15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.

General. Except as described in this Section 15, based upon its
examination of publicly available information with respect to the Company and
the review of certain information furnished by the Company to Parent and
discussions of representatives of Parent with representatives of the Company
during Parent's investigation of the Company (see Section 10), neither Purchaser
nor Parent is aware of any license or other regulatory permit that appears to be
material to the business of the Company and its subsidiaries, taken as a whole,
which might be adversely affected by the acquisition of Shares by Purchaser
pursuant to the Offer or, except as set forth below, of any approval or other
action by any domestic (federal or state) or foreign governmental,
administrative or regulatory authority or agency which would be required prior
to the acquisition of Shares by Purchaser pursuant to the Offer. Should any such
approval or other action be required, it is Purchaser's present intention to
seek such approval or action. Purchaser does not currently

29
<PAGE> 32

intend, however, to delay the purchase of Shares tendered pursuant to the Offer
pending the outcome of any such action or the receipt of any such approval
(subject to Purchaser's right to decline to purchase Shares if any of the
conditions in Section 14 shall have occurred). There can be no assurance that
any such approval or other action, if needed, would be obtained without
substantial conditions or that adverse consequences might not result to the
business of the Company, Purchaser or Parent or that certain parts of the
businesses of the Company, Purchaser or Parent might not have to be disposed of
or held separate or other substantial conditions complied with in order to
obtain such approval or other action or in the event that such approval was not
obtained or such other action was not taken. Purchaser's obligation under the
Offer to accept for payment and pay for Shares is subject to certain conditions,
including conditions relating to the legal matters discussed in this Section 15.
See Section 14.

New York State Insurance Approval. As a result of the Company's ownership
of Gerber Life, the acquisition of Shares pursuant to the Offer will require the
approval of the Superintendent. In connection with obtaining such approval,
Parent and Purchaser intend to file promptly following the date of this Offer to
Purchase the Form A as required by the Insurance Law and the rules and
regulations thereunder. There are no specific requirements imposed on the
Superintendent as to the timing of the Superintendent's determination with
respect to such application. Accordingly, the consideration and determination of
the Superintendent may result in substantial delay in the consummation of the
Offer. Purchaser and Parent anticipate that the Regulatory Approval Condition
will be satisfied in three to six months following the date hereof. However,
there can be no assurance that such condition will be satisfied within such time
period. The Merger Agreement provides that Purchaser is required to extend the
Offer at any time up to November 30, 1994 if the Regulatory Approval Condition
has not been satisfied or waived.

The Insurance Law directs the Superintendent to disapprove an acquisition
if he determines, after notice and an opportunity to be heard, that disapproval
"is reasonably necessary to protect the interests of the people" of New York. In
making such determination, the Superintendent may consider only the following
factors:

(i) the financial condition of the acquiring person and the insurer;

(ii) the trustworthiness of the acquiring person or any of its
officers and directors;

(iii) a plan for the proper and effective conduct of the insurer's
operations;

(iv) the source of the funds or assets for the acquisition;

(v) the fairness of any exchange of shares, assets, cash or other
consideration for the shares or assets to be received;

(vi) whether the effect of the acquisition may be substantially to
lessen competition in any line of commerce in insurance or to tend to
create a monopoly therein; and

(vii) whether the acquisition is likely to be hazardous or prejudicial
to the insurer's policyholders or shareholders.

Any adverse determination by the Superintendent is subject to judicial review in
a proceeding under article 78 of the Civil Practice Law and Rules of New York.

State Takeover Laws. The Company is incorporated under the laws of the
State of Michigan. In general, Sections 775 through 784 of Michigan Law (the
"Business Combination Statute") prevent an "interested shareholder" (generally a
person who owns or has the right to acquire 10% or more of a corporation's
outstanding voting stock, or an affiliate or associate thereof) from engaging in
a "business combination" (defined to include mergers and certain other
transactions) with a Michigan corporation for a period of five years following
the date such person became an interested shareholder unless, among other
things, the board of directors of the corporation approved the business
combination at any time prior to the time the interested shareholder first
became an interested shareholder. On May 21, 1994, prior to the execution of the
Merger Agreement, the Board of Directors of the Company, by unanimous vote of
all directors present at a meeting held on such date, approved the Merger
Agreement and determined that each of

30
<PAGE> 33

the Offer and the Merger is fair to, and in the best interest of, the
shareholders of the Company. Accordingly, the Business Combination Statute is
inapplicable to the Offer and the Merger.

In general, Sections 790 through 799 of Michigan Law (the "Control Share
Acquisition Statute") provide that "control shares" (defined as shares that,
except for this statute, would have voting power that would entitle a person,
immediately after acquisition of the shares, to exercise or direct the exercise
of the voting power of one-fifth or more of all voting power of the company's
shares) acquired in a "control share acquisition" (defined as an acquisition of
ownership or the power to direct the voting power of control shares) have voting
rights only to the extent granted by a resolution approved by both a majority of
all shares entitled to vote thereon and a majority of the shares entitled to
vote thereon excluding all interested shares. This statute does not apply to the
acquisition of any shares of a corporation if, among other things, the
corporation's articles or by-laws provide, before the control share acquisition,
that the provisions do not apply to such acquisitions. Article V, Section 6 of
the By-laws of the Company provides that the Control Share Acquisition Statute
does not apply to the acquisition of any shares of the Company's capital stock.
Accordingly, the Control Share Acquisition Statute is not applicable to the
Offer or the Merger.

A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, shareholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. However, in 1987 in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of
Indiana may, as a matter of corporate law and, in particular, with respect to
those aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without the prior approval of the remaining shareholders. The state
law before the Supreme Court was by its terms applicable only to corporations
that had a substantial number of shareholders in the state and were incorporated
there.

The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. Purchaser does not know whether any of these laws will, by their
terms, apply to the Offer or the Merger and has not complied with any such laws.
Should any person seek to apply any state takeover law, Purchaser will take such
action as then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings. In the event
it is asserted that one or more state takeover laws is applicable to the Offer
or the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, Purchaser might be required to
file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, Purchaser might be unable to accept for
payment any Shares tendered pursuant to the Offer, or be delayed in continuing
or consummating the Offer, and the Merger. In such case, Purchaser may not be
obligated to accept for payment any Shares tendered. See Section 14.

Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division and the
FTC and certain waiting period requirements have been satisfied. The acquisition
of Shares by Purchaser pursuant to the Offer are subject to such requirements.
See Section 2.

Pursuant to the HSR Act, on May 25, 1994, Sandoz Corporation filed on
behalf of Parent a Premerger Notification and Report Form in connection with the
purchase of Shares pursuant to the Offer with the Antitrust Division and the
FTC. Under the provisions of the HSR Act applicable to the Offer, the purchase
of Shares pursuant to the Offer may not be consummated until the expiration of a
15-calendar day waiting period following the filing by Parent. Accordingly, the
waiting period under the HSR Act applicable to the purchase of Shares pursuant
to the Offer will expire at 11:59 p.m., New York City time, on June 9, 1994,
unless such waiting period is earlier terminated by the FTC and the Antitrust
Division or extended by a request from the FTC or the Antitrust Division for
additional information or documentary material prior to the expiration of the
waiting period. Pursuant to the HSR Act, Parent has requested early termination
of the waiting period applicable to the Offer. There can be no assurance,
however, that such waiting period will be terminated early.

31
<PAGE> 34

If either the FTC or the Antitrust Division were to request additional
information or documentary material from Parent with respect to the Offer, the
waiting period with respect to the Offer would expire at 11:59 p.m., New York
City time, on the tenth calendar day after the date of substantial compliance by
Parent with such request. Thereafter, the waiting period could be extended only
by court order. If the acquisition of Shares is delayed pursuant to a request by
the FTC or the Antitrust Division for additional information or documentary
material pursuant to the HSR Act, the Offer may, but need not, be extended and,
in any event, the purchase of and payment for Shares will be deferred until 10
days after the request is substantially complied with, unless the extended
period expires on or before the date when the initial 15-day period would
otherwise have expired, or unless the waiting period is sooner terminated by the
FTC and the Antitrust Division. Only one extension of such waiting period
pursuant to a request for additional information is authorized by the HSR Act
and the rules promulgated thereunder, except by court order. Any such extension
of the waiting period will not give rise to any withdrawal rights not otherwise
provided for by applicable law. See Section 4. It is a condition to the Offer
that the waiting period applicable under the HSR Act to the Offer expire or be
terminated. See Section 2 and Section 14.

The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
Purchaser pursuant to the Offer. At any time before or after the purchase of
Shares pursuant to the Offer by Purchaser, the FTC or the Antitrust Division
could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer or seeking the divestiture of Shares purchased by
Purchaser or the divestiture of substantial assets of Parent, the Company or
their respective subsidiaries. Private parties and state attorneys general may
also bring legal action under federal or state antitrust laws under certain
circumstances. Based upon an examination of information available to Parent
relating to the businesses in which Parent, the Company and their respective
subsidiaries are engaged, Parent and Purchaser believe that the Offer will not
violate the antitrust laws. Nevertheless, there can be no assurance that a
challenge to the Offer on antitrust grounds will not be made or, if such a
challenge is made, what the result would be. See Section 14 for certain
conditions to the Offer, including conditions with respect to litigation.

16. FEES AND EXPENSES. Except as set forth below, Purchaser will not pay
any fees or commissions to any broker, dealer or other person for soliciting
tenders of Shares pursuant to the Offer.

Morgan Stanley is acting as Dealer Manager in connection with the Offer and
is providing certain financial advisory services to Parent in connection with
the acquisition of the Company. Parent has agreed to pay Morgan Stanley a fee of
$2.1 million, which fee became payable upon the execution of the Merger
Agreement, and a transaction fee of $13.3 million, against which the foregoing
fee will be credited, payable upon the acquisition by Purchaser of more than 50%
of the Shares.

Parent has also agreed to reimburse Morgan Stanley for all reasonable
out-of-pocket expenses incurred by Morgan Stanley, including the reasonable fees
and expenses of legal counsel, and to indemnify Morgan Stanley against certain
liabilities and expenses in connection with its engagement, including certain
liabilities under the federal securities laws.

Purchaser and Parent have retained Georgeson & Company Inc., as the
Information Agent, and Chemical Bank, as the Depositary, in connection with the
Offer. The Information Agent may contact holders of Shares by mail, telephone,
telecopy, telegraph and personal interview and may request banks, brokers,
dealers and other nominee shareholders to forward materials relating to the
Offer to beneficial owners.

As compensation for acting as Information Agent in connection with the
Offer, Georgeson & Company Inc. will be paid a fee of $20,000 and will also be
reimbursed for certain out-of-pocket expenses and may be indemnified against
certain liabilities and expenses in connection with the Offer, including certain
liabilities under the federal securities laws. Purchaser will pay the Depositary
reasonable and customary compensation for its services in connection with the
Offer, plus reimbursement for out-of-pocket expenses, and will indemnify the
Depositary against certain liabilities and expenses in connection therewith,
including under federal securities laws. Brokers, dealers, commercial banks and
trust companies will be reimbursed by Purchaser for customary handling and
mailing expenses incurred by them in forwarding material to their customers.

32
<PAGE> 35

17. MISCELLANEOUS. Purchaser is not aware of any jurisdiction where the
making of the Offer is prohibited by any administrative or judicial action
pursuant to any valid state statute. If Purchaser becomes aware of any valid
state statute prohibiting the making of the Offer or the acceptance of Shares
pursuant thereto, Purchaser will make a good faith effort to comply with any
such state statute. If, after such good faith effort, Purchaser cannot comply
with any such state statute, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) the holders of Shares in such state. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of Purchaser by the Dealer Manager or by one or more registered brokers
or dealers licensed under the laws of such jurisdiction.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER OR THE COMPANY NOT CONTAINED IN THIS OFFER
TO PURCHASE OR IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.

Pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, Parent and Purchaser have filed with the Commission the Schedule
14D-1, together with exhibits, furnishing certain additional information with
respect to the Offer. The Schedule 14D-1 and any amendments thereto, including
exhibits, may be inspected at, and copies may be obtained from, the same places
and in the same manner as set forth in Section 7 (except that they will not be
available at the regional offices of the Commission).

SL SUB CORP.

May 27, 1994

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<PAGE> 36

SCHEDULE I

DIRECTORS AND EXECUTIVE OFFICERS OF
PARENT AND PURCHASER

1. Directors and Executive Officers of Parent. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment, and material occupations, positions, offices or
employments for the past five years of each director and executive officer of
Parent. Unless otherwise indicated, the current business address of each person
is Lichtstrasse 35, CH-4002 Basle, Switzerland. Unless otherwise indicated, each
such person is a citizen of Switzerland and has held his present position as set
forth below for the past five years. Unless otherwise indicated, each occupation
set forth opposite an individual's name refers to employment with Parent.

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

* Members of the Praesidium.

<PAGE> 37

<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
NAME, CITIZENSHIP EMPLOYMENT; MATERIAL POSITIONS HELD
AND CURRENT BUSINESS ADDRESS DURING THE PAST FIVE YEARS
- ---------------------------------------------------------------------------------------
<S> <C>
Prof. Dr. Peter Bockli Director; Bockli & Thomann Law Office, Basle,
Bockli & Thomann Switzerland, Partner; Aral (Schweiz) AG, Basle,
St. Jakobs-Strasse 41 Switzerland, Director; Holler Stiftung, Munich,
4052 Basle Germany, Trustee since 1991; Swiss Bank Corporation,
Switzerland Basle, Switzerland, Director; Zurich Insurance, Zurich,
Switzerland, Director; Zurich Life Insurance, Zurich,
Switzerland, Director; Nestle SA, Vevey, Switzerland,
Director since 1993; Hason AG, Basle, Switzerland,
Director; Pertinax AG, Basle, Switzerland, Director;
Nomika Immobilien AG, Basle, Switzerland, Director;
Assivalor AG, Basle, Switzerland, Director; Anova
Holding AG, Hurden, Switzerland, Director; Wilhelm
Doerenkamp Stiftung, Chur, Switzerland, Managing
Director; Habasit Holding AG, Reinach BL, Switzerland,
Director; Habasit AG, Reinach BL, Switzerland,
Director; Suter & Suter AG, Basle, Switzerland,
Director from 1980 to 1994; Dictaphone (Switzerland),
Killwangen, Switzerland, Director from 1968 to 1994;
Volkswagen Versicherungsdienst AG, Zurich, Switzerland,
Director from 1975 to 1993.
Fred-Henri Firmenich Director; Firmenich International, Geneva, Switzerland,
Firmenich SA Chairman; Firmenich SA, Geneva, Switzerland, Director;
Chemin Bergere Swiss National Bank, Zurich/Berne, Switzerland,
Meyrin Director.
1217 Geneva
Switzerland
Robert Louis Genillard Director; Credit Suisse, Zurich, Switzerland, Director;
1, Quai du Mont-Blanc Credit Suisse Holding, Zurich, Switzerland, Director;
1211 Geneva TBG Holdings NV, Monaco, Director; Clariden Bank,
Switzerland Zurich, Switzerland, Director; Leu Holding AG, Zug,
Switzerland, Director since 1990; CS First Boston
Group, Inc., New York, New York, Director since 1991.
Dr. Nicholas Gossweiler Director; Physician.
Krayigenweg 34
3074 Muri
Switzerland
Pierre Landolt Director; Moco Agropecuaria LTDA, Santa Terezinha
Facenda Tamandua Paraiba, Brazil, Executive Director; Misu Irrigacio
Santa Terezinha-Paraiba Industria e Comericio LTDA, Santa Terezinha Paraiba,
PB 58772 Brazil, Director; Fair Corretora di Cambio e Valores
Brazil LTDA, Sao Paulo, Brazil, Director; Emasan SA, Basle,
Switzerland, Chairman; Banque Scandinave en Suisse,
Geneva, Switzerland, Director since 1994.
Louis Dominique de Meuron Director; M.L. Services, Paris, France, Managing
171 Boulevard du Montparnasse Director; Camrenon Bernard SGE, Rueil Malmaison,
75006 Paris France, Director since 1992; International Contractors
France Group, Kuwait, Consultant since 1994; Bonhote SA,
Neuchatel, Switzerland, Director since 1993; Sotraso
SA, Fribourg, Switzerland, Director since 1991.
</TABLE>
<PAGE> 38

<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
NAME, CITIZENSHIP EMPLOYMENT; MATERIAL POSITIONS HELD
AND CURRENT BUSINESS ADDRESS DURING THE PAST FIVE YEARS
- ---------------------------------------------------------------------------------------
<S> <C>
Tony R. Reis Director since 1993; IBM Europe, Vice President since
Vice President, Europe 1993; IBM Switzerland, Zurich, Switzerland, General
IBM Europe, Tour Pascal Manager and Chairman from 1992 to 1993; Held various
La Defense F. Suj., Cedex 40 positions in IBM Group for the past five years.
92075 Paris La Defense
France
Dr. Gian Pietro de Ry Director.
Casa San Rocco
6922 Morcote
Switzerland
Hans-Joerg Rudloff** Director since 1994; Marcuard & Company, Geneva,
11 Eaton Place Switzerland, Owner; Financiere Credit Suisse First
S.W. 1 London Boston, London, England, Chairman and Chief Executive
England Officer, from 1989 to 1993; Credit Suisse Holding,
Zurich, Switzerland, Member of Executive Board from
7, Rue des Alpes 1993 to 1994; BB Asset Management, Zurich, Switzerland,
1200 Geneva Chairman since 1994; Clariden Bank, Zurich,
Switzerland Switzerland, Vice Chairman; Pargesa Holding SA, Geneva,
Switzerland, Director.
Heinz Schoffler Director; Leofarin AG, Murten, Switzerland, Chairman
Ryf 6 and Chief Executive Officer.
3280 Murten
Switzerland
Daniel C. Wagniere Director and President since 1993; Sandoz Corporation,
New York, New York, Chief Executive Officer from 1986
to 1993.
Dr. Jean Wander Director; Tax and Legal Advisor; Berner Tagblatt Medien
Bollwerk 21 AG, Berne, Switzerland, Director.
3000 Berne
Switzerland
Josef Zumstein Director; KCE AG, Wallisellen, Switzerland, Vice
Schubelstrasse 11 Chairman; UTC, Basle, Switzerland, Director; Credit
8700 Kusnacht Suisse Holding, Zurich, Switzerland, Director from 1978
Switzerland to 1992; Grands Magasins Jelmoli, Zurich, Switzerland,
Director from 1978 to 1992; Innovation SA, Lausanne,
Switzerland, Director from 1978 to 1991; Grand Passage,
Geneva, Switzerland, Director from 1978 to 1992;
Baloise Holding, Basle, Switzerland, Director from 1982
to 1992.
Dr. Ulrich Oppikofer Secretary; Held various positions with the Sandoz Group
for the past five years.
GROUP MANAGEMENT
Dr. Rolf W. Schweizer Chief Executive Officer since 1994. (See above).
Daniel C. Wagniere President since 1993. (See above).
</TABLE>

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

** German Citizenship.
<PAGE> 39

2. Directors and Executive Officers of Purchaser. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment, and material occupations, positions, offices or
employments for the past five years of each director and executive officer of
Purchaser. Unless otherwise indicated, the current business address of each
person is 608 Fifth Avenue, 10th Floor, New York, New York 10020. Unless
otherwise indicated, each such person is a citizen of the United States of
America, and each occupation set forth opposite an individual's name, refers to
employment with Purchaser.

<TABLE>
<CAPTION>
NAME, CITIZENSHIP PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
AND CURRENT BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ----------------------------------- --------------------------------------------------------
<S> <C>
Heinz Imhof* Director, Chairman and President since May 21, 1994;
Sandoz Corporation, New York, New York, Vice Chairman
and Chief Executive Officer since 1993; Held various
positions with the Sandoz Group for the past five years.
Robert L. Thompson, Jr. Director, Vice President and Secretary since May 21,
1994; Sandoz Corporation, New York, New York, Vice
President, General Counsel and Secretary since 1989;
Organization for International Investment, Washington,
D.C., Director since December 7, 1993.
Roland Loesser** Director, Vice President and Treasurer since May 21,
1994; Sandoz Corporation, New York, New York, Group Vice
President and Chief Financial Officer since September
1990; Director and other various positions with Sandoz
Group for the past five years.
</TABLE>

- ---------------
* Swiss Citizenship.
** German Citizenship.
*** United States Citizenship.
**** Swedish Citizenship.
<PAGE> 40

Facsimiles of the Letter of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal, certificates evidencing
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:

CHEMICAL BANK

<TABLE>
<S> <C> <C>
By Facsimile Transmission
By Mail: (for Eligible Institutions By Hand or Overnight Delivery:
Only):
Chemical Bank (212) 629-8015 Chemical Bank
Reorganization Department (212) 629-8016 55 Water Street
P.O. Box 3085 Second Floor -- Room 234
G.P.O. Station Confirm by Telephone: New York, New York 10041
New York, New York 10116-3085 (212) 613-7137 Attn: Reorganization Department
</TABLE>

Questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of this Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent. A shareholder may also contact brokers, dealers, commercial
banks or trust companies for assistance concerning the Offer.

The Information Agent for the Offer is:

GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005

Banks and Brokers Call Collect:
(212) 440-9800

All Others Call Toll Free:
1-800-223-2064

The Dealer Manager for the Offer is:
MORGAN STANLEY & CO.
Incorporated

1251 Avenue of the Americas
New York, New York 10020
(212) 703-8477

<PAGE> 1

LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
(Including the Associated Rights)

Gerber Products Company
Pursuant to the Offer to Purchase
Dated May 27, 1994

SL Sub Corp.
an indirect wholly owned subsidiary
of

Sandoz Ltd.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
THURSDAY, JUNE 30, 1994, UNLESS THE OFFER IS EXTENDED.

THE DEPOSITARY FOR THE OFFER IS:

CHEMICAL BANK

<TABLE>
<S> <C> <C>
By Facsimile Transmission
By Mail: (for Eligible Institutions By Hand or Overnight Delivery:
Only):
Chemical Bank (212) 629-8015 Chemical Bank
Reorganization Department (212) 629-8016 55 Water Street
P.O. Box 3085 Confirm by Telephone: Second Floor -- Room 234
G.P.O. Station (212) 613-7137 New York, New York 10041
New York, New York 10116-3085 Attn: Reorganization Department
</TABLE>

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

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.

This Letter of Transmittal is to be completed by shareholders either if
certificates evidencing Shares (as defined below) are to be forwarded herewith
or if delivery of Shares is to be made by book-entry transfer to the
Depositary's account at The Depository Trust Company ("DTC"), the Midwest
Securities Trust Company ("MSTC") or the Philadelphia Depository Trust Company
("PDTC") (each a "Book-Entry Transfer Facility" and collectively, the
"Book-Entry Transfer Facilities") pursuant to the book-entry transfer procedure
described in Section 3 of the Offer to Purchase (as defined below). DELIVERY OF
DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
<PAGE> 2

Shareholders whose certificates evidencing Shares ("Share Certificates")
are not immediately available or who cannot deliver their Share Certificates and
all other documents required hereby to the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) or who cannot complete
the procedure for delivery by book-entry transfer on a timely basis and who wish
to tender their Shares must do so pursuant to the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase. See Instruction 2.

/ / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:

Name of Tendering Institution

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

Check Box of Applicable Book-Entry Transfer Facility:

(CHECK ONE) / / DTC / / MSTC / / PDTC

Account Number
---------------------------------- Transaction Code Number ----------------

/ / CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:

Name(s) of Registered Holder(s)
-----------------------------------------------------------------------------

Window Ticket No. (if any)
----------------------------------------------------------------------------

Date of Execution of Notice of Guaranteed Delivery
----------------------------------------------------------

Name of Institution which Guaranteed Delivery
---------------------------------------------------------------
- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF
SHARES EVIDENCED BY
SHARE CERTIFICATE SHARE NUMBER OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
TOTAL SHARES ...............................
------------------------------------------------------------------------------------------------------------------
</TABLE>

* Need not be completed by shareholders delivering Shares by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by
each Share Certificate delivered to the Depositary are being tendered
hereby. See Instruction 4.
- --------------------------------------------------------------------------------

NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
LETTER OF TRANSMITTAL CAREFULLY.
<PAGE> 3

Ladies and Gentlemen:

The undersigned hereby tenders to SL Sub Corp., a Delaware corporation
("Purchaser") and an indirect wholly owned subsidiary of Sandoz Ltd., a
corporation organized under the laws of Switzerland, the above-described shares
of common stock, par value $2.50 per share (the "Common Stock"), of Gerber
Products Company, a Michigan corporation (the "Company"), and the associated
preferred stock purchase rights issued pursuant to the Rights Agreement, dated
as of July 25, 1990, as amended, between the Company and Harris Trust and
Savings Bank, as Rights Agent (together with the Common Stock, the "Shares"),
pursuant to Purchaser's offer to purchase all Shares, at $53.00 per Share, net
to the seller in cash, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated May 27, 1994 (the "Offer to Purchase"), receipt of
which is hereby acknowledged, and in this Letter of Transmittal (which together
constitute the "Offer"). The undersigned understands that Purchaser reserves the
right to transfer or assign, in whole or from time to time in part, to one or
more of its affiliates, the right to purchase all or any portion of the Shares
tendered pursuant to the Offer.

Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms of the Offer (including, if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), the undersigned hereby sells, assigns and transfers to, or upon the
order of, Purchaser all right, title and interest in and to all the Shares that
are being tendered hereby and all dividends, distributions (including, without
limitation, distributions of additional Shares) and rights declared, paid or
distributed in respect of such Shares on or after May 21, 1994, except for
regular quarterly dividends on the Shares declared and paid at times consistent
with past practice in an amount not in excess of $.215 per Share (collectively,
"Distributions"), and irrevocably appoints the Depositary the true and lawful
agent and attorney-in-fact of the undersigned with respect to such Shares and
all Distributions, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (i) deliver
Share Certificates evidencing such Shares and all Distributions, or transfer
ownership of such Shares and all Distributions on the account books maintained
by a Book-Entry Transfer Facility, together, in either case, with all
accompanying evidences of transfer and authenticity, to or upon the order of
Purchaser, (ii) present such Shares and all Distributions for transfer on the
books of the Company and (iii) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares and all Distributions, all in
accordance with the terms of the Offer.

The undersigned hereby irrevocably appoints Heinz Imhof and Robert L.
Thompson, Jr., and each of them, as the attorneys and proxies of the
undersigned, each with full power of substitution, to vote in such manner as
each such attorney and proxy or his substitute shall, in his sole discretion,
deem proper and otherwise act (by written consent or otherwise) with respect to
all the Shares tendered hereby which have been accepted for payment by Purchaser
prior to the time of such vote or other action and all Shares and other
securities issued in Distributions in respect of such Shares, which the
undersigned is entitled to vote at any meeting of shareholders of the Company
(whether annual or special and whether or not an adjourned or postponed meeting)
or consent in lieu of any such meeting or otherwise. This proxy and power of
attorney is coupled with an interest in the Shares tendered hereby, is
irrevocable and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares by Purchaser in accordance with the terms
of the Offer. Such acceptance for payment shall revoke all other proxies and
powers of attorney granted by the undersigned at any time with respect to such
Shares (and all Shares and other securities issued in Distributions in respect
of such Shares), and no subsequent proxy or power of attorney shall be given or
written consent executed (and if given or executed, shall not be effective) by
the undersigned with respect thereto. The undersigned understands that, in order
for Shares to be deemed validly tendered, immediately upon Purchaser's
acceptance of such Shares for payment, Purchaser must be able to exercise full
voting and other rights with respect to such Shares, including, without
limitation, voting at any meeting of the Company's shareholders then scheduled.

The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, that the tender of the tendered Shares
complies with Rule 14e-4 under the Securities Exchange Act of 1934, as amended,
and that when such Shares are accepted for payment by Purchaser, Purchaser will
acquire good, marketable and
<PAGE> 4

unencumbered title thereto and to all Distributions, free and clear of all
liens, restrictions, charges and encumbrances, and that none of such Shares and
Distributions will be subject to any adverse claim. The undersigned, upon
request, shall execute and deliver all additional documents deemed by the
Depositary or Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby and all Distributions. In
addition, the undersigned shall remit and transfer promptly to the Depositary
for the account of Purchaser all Distributions in respect of the Shares tendered
hereby, accompanied by appropriate documentation of transfer, and, pending such
remittance and transfer or appropriate assurance thereof, Purchaser shall be
entitled to all rights and privileges as owner of each such Distribution and may
withhold the entire purchase price of the Shares tendered hereby, or deduct from
such purchase price, the amount or value of such Distribution as determined by
Purchaser in its sole discretion.

No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.

The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. Purchaser's acceptance of such Shares for payment
will constitute a binding agreement between the undersigned and Purchaser upon
the terms and subject to the conditions of the Offer.

Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates evidencing Shares not purchased or
not tendered, in the name(s) of the registered holder(s) appearing above under
"Description of Shares Tendered." Similarly, unless otherwise indicated in the
box entitled "Special Delivery Instructions," please mail the check for the
purchase price of all Shares purchased and all Share Certificates evidencing
Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing above
under "Description of Shares Tendered." In the event that the boxes entitled
"Special Payment Instructions" and "Special Delivery Instructions" are both
completed, please issue the check for the purchase price of all Shares purchased
and return all Share Certificates evidencing Shares not purchased or not
tendered in the name(s) of, and mail such check and Share Certificates to, the
person(s) so indicated. Unless otherwise indicated herein in the box entitled
"Special Payment Instructions," please credit any Shares tendered hereby and
delivered by book-entry transfer, but which are not purchased, by crediting the
account at the Book-Entry Transfer Facility designated above. The undersigned
recognizes that Purchaser has no obligation, pursuant to the Special Payment
Instructions, to transfer any Shares from the name of the registered holder(s)
thereof if Purchaser does not purchase any of the Shares tendered hereby.
<PAGE> 5

SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)

To be completed ONLY if the check for the purchase price of Shares purchased
or Share Certificates evidencing Shares not tendered or not purchased are to be
issued in the name of someone other than the undersigned, or if Shares tendered
hereby and delivered by book-entry transfer which are not purchased are to be
returned by credit to an account at one of the Book-Entry Transfer Facilities
other than that designated above.

Issue / / check / / Share Certificate(s) to:

Name: ------------------------------------------------------------------------
(Please Print)

Address: ---------------------------------------------------------------------

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

---------------------------------------------------------------------
(Zip Code)

TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)

/ / Credit Shares delivered by book-entry transfer and not purchased to the
account set forth below:

Check appropriate box:

/ / DTC / / MSTC / / PDTC
Account Number ----------------------------------------------------------------

SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)

To be completed ONLY if the check for the purchase price of Shares purchased
or Share Certificates evidencing Shares not tendered or not purchased are to be
mailed to someone other than the undersigned, or to the undersigned at an
address other than that shown under "Description of Shares Tendered."

Mail / / check / / Share Certificate(s) to:

Name: ------------------------------------------------------------------------
(Please Print)

Address: ---------------------------------------------------------------------

---------------------------------------------------------------------
(Zip Code)
<PAGE> 6

IMPORTANT

SHAREHOLDERS: SIGN HERE
(Please Complete Substitute Form W-9 on Reverse)

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

- --------------------------------------------------------------------------------
Signature(s) of Holder(s)

Dated: ------------------------ , 199--

(Must be signed by registered holder(s) exactly as name(s) appear(s) on
Share Certificates or on a security position listing or by a person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5.)

Name(s):
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
(Please Print)

Capacity (full title):
- --------------------------------------------------------------------------------

Address:
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
(Include Zip Code)

Area Code and Telephone No.:
- -------------------------------------------------------------------------

Taxpayer Identification or Social Security No.:
- ---------------------------------------------------------
(See Substitute Form W-9 on reverse side)

GUARANTEE OF SIGNATURE(S)
(If Required -- See Instructions 1 and 5)

FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE
BELOW.
<PAGE> 7

INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

1. Guarantee of Signatures. All signatures on this Letter of Transmittal
must be medallion guaranteed by a firm which is a member of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., or by a commercial bank or trust company having an office or
correspondent in the United States, or by any other "eligible guarantor
institution," as such term is defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended (each of the foregoing being referred to as an
"Eligible Institution"), unless (i) this Letter of Transmittal is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in a Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of Shares) tendered hereby
and such holder(s) has (have) completed neither the box entitled "Special
Payment Instructions" nor the box entitled "Special Delivery Instructions" on
the reverse hereof or (ii) such Shares are tendered for the account of an
Eligible Institution. See Instruction 5.

2. Delivery of Letter of Transmittal and Share Certificates. This Letter
of Transmittal is to be used either if Share Certificates are to be forwarded
herewith or if Shares are to be delivered by book-entry transfer pursuant to the
procedure set forth in Section 3 of the Offer to Purchase. Share Certificates
evidencing all physically tendered Shares, or a confirmation of a book-entry
transfer into the Depositary's account at a Book-Entry Transfer Facility of all
Shares delivered by book-entry transfer as well as a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) and any other documents
required by this Letter of Transmittal, must be received by the Depositary at
one of its addresses set forth on the reverse hereof prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase). If Share Certificates
are forwarded to the Depositary in multiple deliveries, a properly completed and
duly executed Letter of Transmittal must accompany each such delivery.
Shareholders whose Share Certificates are not immediately available, who cannot
deliver their Share Certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot complete the procedure for
delivery by book-entry transfer on a timely basis may tender their Shares
pursuant to the guaranteed delivery procedure described in Section 3 of the
Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by
or through an Eligible Institution; (ii) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form made available by
Purchaser, must be received by the Depositary prior to the Expiration Date; and
(iii) the Share Certificates evidencing all physically delivered Shares in
proper form for transfer by delivery, or a confirmation of a book-entry transfer
into the Depositary's account at a Book-Entry Transfer Facility of all Shares
delivered by book-entry transfer, in each case together with a Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees, and any other documents required by this
Letter of Transmittal, must be received by the Depositary within five New York
Stock Exchange, Inc. ("NYSE") trading days after the date of execution of such
Notice of Guaranteed Delivery, all as described in Section 3 of the Offer to
Purchase.

THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY.
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.

No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of Transmittal
(or a facsimile hereof), all tendering shareholders waive any right to receive
any notice of the acceptance of their Shares for payment.

3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate numbers, the number of
Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule and attached hereto.

4. Partial Tenders (not applicable to shareholders who tender by book-entry
transfer). If fewer than all the Shares evidenced by any Share Certificate
delivered to the Depositary herewith are to be tendered hereby,
<PAGE> 8

fill in the number of Shares which are to be tendered in the box entitled
"Number of Shares Tendered." In such cases, new Share Certificate(s) evidencing
the remainder of the Shares that were evidenced by the Share Certificates
delivered to the Depositary herewith will be sent to the person(s) signing this
Letter of Transmittal, unless otherwise provided in the box entitled "Special
Delivery Instructions" on the reverse hereof, as soon as practicable after the
expiration or termination of the Offer. All Shares evidenced by Share
Certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.

5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificates evidencing such Shares without alteration,
enlargement or any other change whatsoever.

If any Share tendered hereby is owned of record by two or more persons, all
such persons must sign this Letter of Transmittal.

If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.

If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate stock
powers are required, unless payment is to be made to, or Share Certificates
evidencing Shares not tendered or not purchased are to be issued in the name of,
a person other than the registered holder(s), in which case, the Share
Certificate(s) evidencing the Shares tendered hereby must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on such Share Certificate(s).
Signatures on such Share Certificate(s) and stock powers must be guaranteed by
an Eligible Institution.

If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on such
Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.

If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of such person's authority so to act must be
submitted.

6. Stock Transfer Taxes. Except as otherwise provided in this Instruction
6, Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or Share
Certificate(s) evidencing Shares not tendered or not purchased are to be issued
in the name of, a person other than the registered holder(s), the amount of any
stock transfer taxes (whether imposed on the registered holder(s), such other
person or otherwise) payable on account of the transfer to such other person
will be deducted from the purchase price of such Shares purchased, unless
evidence satisfactory to Purchaser of the payment of such taxes, or exemption
therefrom, is submitted. Except as provided in this Instruction 6, it will not
be necessary for transfer tax stamps to be affixed to the Share Certificates
evidencing the Shares tendered hereby.

7. Special Payment and Delivery Instructions. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificate(s)
evidencing Shares not tendered or not purchased are to be issued, in the name of
a person other than the person(s) signing this Letter of Transmittal or if such
check or any such Share Certificate is to be sent to someone other than the
person(s) signing this Letter of Transmittal or to the person(s) signing this
Letter of Transmittal but at an address other than that shown in the box
entitled "Description of Shares Tendered" on the reverse hereof, the appropriate
boxes on the reverse of this Letter of Transmittal must be completed.
Shareholders delivering Shares tendered hereby by book-entry transfer may
request that Shares not purchased be credited to such account maintained at a
Book-Entry Transfer Facility as such shareholder may designate in the box
entitled "Special Payment Instructions" on the
<PAGE> 9

reverse hereof. If no such instructions are given, all such Shares not purchased
will be returned by crediting the account at the Book-Entry Transfer Facility
designated on the reverse hereof as the account from which such Shares were
delivered.

8. Questions and Requests for Assistance or Additional Copies. Questions
and requests for assistance may be directed to the Information Agent or the
Dealer Manager at their respective addresses or telephone numbers set forth
below. Additional copies of the Offer to Purchase, this Letter of Transmittal
and the Notice of Guaranteed Delivery may be obtained from the Information Agent
or from brokers, dealers, commercial banks or trust companies.

9. Substitute Form W-9. Each tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and that
such shareholder is not subject to backup withholding of federal income tax. If
a tendering shareholder has been notified by the Internal Revenue Service that
such shareholder is subject to backup withholding, such shareholder must cross
out item (2) of the Certification box of the Substitute Form W-9, unless such
shareholder has since been notified by the Internal Revenue Service that such
shareholder is no longer subject to backup withholding. Failure to provide the
information on the Substitute Form W-9 may subject the tendering shareholder to
31% federal income tax withholding on the payment of the purchase price of all
Shares purchased from such shareholder. If the tendering shareholder has not
been issued a TIN and has applied for one or intends to apply for one in the
near future, such shareholder should write "Applied For" in the space provided
for the TIN in Part I of the Substitute Form W-9, and sign and date the
Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is
not provided with a TIN within 60 days, the Depositary will withhold 31% on all
payments of the purchase price to such shareholder until a TIN is provided to
the Depositary.

IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND
SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS
DEFINED IN THE OFFER TO PURCHASE).

IMPORTANT TAX INFORMATION

Under the federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such shareholder's correct TIN on Substitute Form W-9 below. If such
shareholder is an individual, the TIN is such shareholder's social security
number. If the Depositary is not provided with the correct TIN, the shareholder
may be subject to a $50 penalty imposed by the Internal Revenue Service. In
addition, payments that are made to such shareholder with respect to Shares
purchased pursuant to the Offer may be subject to backup withholding of 31%.

Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a statement, signed under penalties of
perjury, attesting to such individual's exempt status. Forms of such statements
can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.

If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the shareholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
<PAGE> 10

PURPOSE OF SUBSTITUTE FORM W-9

To prevent backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder is
required to notify the Depositary of such shareholder's correct TIN by
completing the form below certifying (a) that the TIN provided on Substitute
Form W-9 is correct (or that such shareholder is awaiting a TIN), and (b) that
(i) such shareholder has not been notified by the Internal Revenue Service that
such shareholder is subject to backup withholding as a result of a failure to
report all interest or dividends or (ii) the Internal Revenue Service has
notified such shareholder that such shareholder is no longer subject to backup
withholding.

WHAT NUMBER TO GIVE THE DEPOSITARY

The shareholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the name
of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance on
which number to report. If the tendering shareholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future, the shareholder should write "Applied For" in the space provided for the
TIN in Part I, and sign and date the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN within 60 days,
the Depositary will withhold 31% of all payments of the purchase price to such
shareholder until a TIN is provided to the Depositary.
<PAGE> 11

PAYER'S NAME: CHEMICAL BANK

<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------
SUBSTITUTE PART I - Taxpayer Identification -------------------------------
FORM W-9 Number - For all accounts, enter Social Security Number
DEPARTMENT OF THE taxpayer identification number in OR
TREASURY the box at right. (For most ------------------------------
Employer Identification
INTERNAL REVENUE SERVICE individuals, this is your social Number
security number. If you do not have (If awaiting TIN write
a number, see Obtaining a Number in "Applied For")
the enclosed Guidelines.) Certify by
signing and dating below. Note: If
the account is in more than one
name, see the chart in the enclosed
Guidelines to determine which number
to give the payer.
----------------------------------------------------------------------
Payer's Request for PART II -- For Payees Exempt From Backup Withholding, see the
Taxpayer enclosed Guidelines and complete as instructed therein.
Identification Number
(TIN)
- ----------------------------------------------------------------------------------------------
CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am
waiting for a number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been notified by the
Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result
of failure to report all interest or dividends, or the IRS has notified me that I am no
longer subject to backup withholding.
CERTIFICATE INSTRUCTIONS -- You must cross out item (2) above if you have been notified by
the IRS that you are subject to backup withholding because of underreporting interest or
dividends on your tax return. However, if after being notified by the IRS that you were
subject to backup withholding you received another notification from the IRS that you are no
longer subject to backup withholding, do not cross out item (2). (Also see instructions in
the enclosed Guidelines.)
- ----------------------------------------------------------------------------------------------
SIGNATURE DATE , 199
- ----------------------------------------------------------------------------------------------
</TABLE>

NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
<PAGE> 12

The Information Agent for the Offer is:

Georgeson & Company Inc.
Wall Street Plaza
New York, New York 10005

Banks and Brokers Call Collect:
(212) 440-9800

All Others Call Toll Free:
1-800-223-2064

The Dealer Manager for the Offer is:
MORGAN STANLEY & CO.
Incorporated

1251 Avenue of the Americas
New York, New York 10020
(212) 703-8477
May 27, 1994

<PAGE> 1

NOTICE OF GUARANTEED DELIVERY

for

Tender of Shares of Common Stock
(Including the Associated Rights)

Gerber Products Company
(Not To Be Used For Signature Guarantees)

This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) (i) if certificates
("Share Certificates") evidencing shares of common stock, par value $2.50 per
share (the "Common Stock"), of Gerber Products Company, a Michigan corporation
(the "Company"), and the associated preferred stock purchase rights issued
pursuant to the Rights Agreement, dated as of July 25, 1990, as amended, between
the Company and Harris Trust and Savings Bank, as Rights Agent (together with
the Common Stock, the "Shares"), are not immediately available, (ii) if Share
Certificates and all other required documents cannot be delivered to Chemical
Bank, as Depositary (the "Depositary"), prior to the Expiration Date (as defined
in Section 1 of the Offer to Purchase (as defined below)) or (iii) if the
procedure for delivery by book-entry transfer cannot be completed on a timely
basis. This Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by telegram or facsimile transmission to the Depositary. See Section
3 of the Offer to Purchase.

The Depositary for the Offer is:

CHEMICAL BANK

<TABLE>
<S> <C> <C>
By Facsimile Transmission
By Mail: (for Eligible Institutions By Hand or Overnight Delivery:
Only):
Chemical Bank (212) 629-8015 Chemical Bank
Reorganization Department (212) 629-8016 55 Water Street
P.O. Box 3085 Confirm by Telephone: Second Floor -- Room 234
G.P.O. Station (212) 613-7137 New York, New York 10041
New York, New York 10116-3085 Attn: Reorganization Department
</TABLE>

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.

This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE> 2

Ladies and Gentlemen:

The undersigned hereby tenders to SL Sub Corp., a Delaware corporation and
an indirect wholly owned subsidiary of Sandoz Ltd., a corporation organized
under the laws of Switzerland, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated May 27, 1994 (the "Offer to Purchase"),
and the related Letter of Transmittal (which together constitute the "Offer"),
receipt of each of which is hereby acknowledged, the number of Shares specified
below pursuant to the guaranteed delivery procedure described in Section 3 of
the Offer to Purchase.

<TABLE>
<S> <C>
Number of Shares: --------------------------------------------
Certificate Nos. (If Available):
--------------------------------------------
- -------------------------------------------- Signature(s) of Holder(s)
Check one box if Shares will be Dated: , 1994
delivered by book-entry transfer:
/ / The Depository Trust Company Name(s) of Holders:
/ / Midwest Securities Trust Company --------------------------------------------
/ / Philadelphia Depository Trust Company --------------------------------------------
Account No. ------------------------------- Please Type or Print

--------------------------------------------
Address

--------------------------------------------
Zip Code

--------------------------------------------
Area Code and Telephone No.
</TABLE>
<PAGE> 3

GUARANTEE

(NOT TO BE USED FOR SIGNATURE GUARANTEE)

The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.
or which is a commercial bank or trust company having an office or correspondent
in the United States, guarantees to deliver to the Depositary, at one of its
addresses set forth above, Share Certificates evidencing the Shares tendered
hereby, in proper form for transfer, or confirmation of book-entry transfer of
such Shares into the Depositary's account at The Depository Trust Company, the
Midwest Securities Trust Company or the Philadelphia Depository Trust Company,
in each case with delivery of a Letter of Transmittal (or facsimile thereof)
properly completed and duly executed, and any other required documents, all
within five New York Stock Exchange, Inc. trading days of the date hereof.

<TABLE>
<S> <C>
- ---------------------------------------- ----------------------------------------
Name of Firm Authorized Signature

- ---------------------------------------- ----------------------------------------
Address Title

- ---------------------------------------- Name:
Zip Code ----------------------------------
Please Type or Print

- ---------------------------------------- Dated: ,199
Area Code and Telephone No. -----------------------------

</TABLE>

DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES
SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.

<PAGE> 1

MORGAN STANLEY & CO.
Incorporated
1251 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10020

Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights)

Gerber Products Company
at

$53.00 Net Per Share
by

SL Sub Corp.
an indirect wholly owned subsidiary
of

Sandoz Ltd.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON THURSDAY, JUNE 30, 1994, UNLESS THE OFFER IS EXTENDED.

May 27, 1994

To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:

We have been appointed by SL Sub Corp., a Delaware corporation
("Purchaser") and an indirect wholly owned subsidiary of Sandoz Ltd., a
corporation organized under the laws of Switzerland ("Parent"), to act as Dealer
Manager in connection with Purchaser's offer to purchase all outstanding shares
of common stock, par value $2.50 per share (the "Common Stock"), of Gerber
Products Company, a Michigan corporation (the "Company"), and the associated
preferred stock purchase rights issued pursuant to the Rights Agreement, dated
as of July 25, 1990, as amended, between the Company and Harris Trust and
Savings Bank, as Rights Agent (together with the Common Stock, the "Shares"), at
a price of $53.00 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in Purchaser's Offer to Purchase, dated May
27, 1994 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") enclosed herewith. Please furnish copies of the
enclosed materials to those of your clients for whose accounts you hold Shares
registered in your name or in the name of your nominee.

The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer at least a
majority of the Shares outstanding on a fully diluted basis. The Offer is also
conditioned upon, among other things, the receipt of approval of the
Superintendent of Insurance of the State of New York for the acquisition of
control of Gerber Life Insurance Company, a wholly owned subsidiary of the
Company, by Parent pursuant to the Offer. It is not expected that this condition
will be satisfied before a substantial period of time has elapsed.
<PAGE> 2

Enclosed for your information and use are copies of the following
documents:

1. Offer to Purchase, dated May 27, 1994;

2. Letter of Transmittal to be used by holders of Shares in accepting
the Offer and tendering Shares;

3. Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents are not immediately available or
cannot be delivered to Chemical Bank (the "Depositary") by the Expiration
Date (as defined in the Offer to Purchase) or if the procedure for
book-entry transfer cannot be completed by the Expiration Date;

4. A letter to shareholders of the Company from Alfred A. Piergallini,
Chairman of the Board, President and Chief Executive Officer of the
Company, together with a Solicitation/Recommendation Statement on Schedule
14D-9 filed with the Securities and Exchange Commission by the Company;

5. A letter which may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;

6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and

7. Return envelope addressed to the Depositary.

WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
THURSDAY, JUNE 30, 1994, UNLESS THE OFFER IS EXTENDED.

In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of certificates
evidencing such Shares (or a confirmation of a book-entry transfer of such
Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities (as defined in the Offer to Purchase)), a Letter of Transmittal (or
facsimile thereof) properly completed and duly executed and any other required
documents in accordance with the instructions contained in the Letter of
Transmittal.

If a holder of Shares wishes to tender Shares, but cannot deliver such
holder's certificates or other required documents, or cannot comply with the
procedure for book-entry transfer, prior to the expiration of the Offer, a
tender of Shares may be effected by following the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase.

Purchaser will not pay any fees or commissions to any broker, dealer or
other person (other than the Dealer Manager, the Depositary and the Information
Agent as described in the Offer) in connection with the solicitation of tenders
of Shares pursuant to the Offer. However, Purchaser will reimburse you for
customary mailing and handling expenses incurred by you in forwarding any of the
enclosed materials to your clients. Purchaser will pay or cause to be paid any
stock transfer taxes payable with respect to the transfer of Shares to it,
except as otherwise provided in Instruction 6 of the Letter of Transmittal.

Any inquiries you may have with respect to the Offer should be addressed to
Morgan Stanley & Co. Incorporated or Georgeson & Company Inc. (the "Information
Agent") at their respective addresses and telephone numbers set forth on the
back cover page of the Offer to Purchase.

Additional copies of the enclosed material may be obtained from the
Information Agent, at the address and telephone numbers set forth on the back
cover page of the Offer to Purchase.

Very truly yours,

MORGAN STANLEY & CO.
Incorporated

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF PARENT, PURCHASER, THE COMPANY, THE DEALER
MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR OF ANY AFFILIATE OF ANY OF
THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR TO MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.

<PAGE> 1

Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights)

Gerber Products Company
at

$53.00 Net Per Share
by

SL Sub Corp.
an indirect wholly owned subsidiary
of

Sandoz Ltd.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON THURSDAY, JUNE 30, 1994, UNLESS THE OFFER IS EXTENDED.

May 27, 1994

To Our Clients:

Enclosed for your consideration are an Offer to Purchase dated May 27, 1994
(the "Offer to Purchase") and a related Letter of Transmittal (which together
constitute the "Offer") in connection with the offer by SL Sub Corp., a Delaware
corporation ("Purchaser") and an indirect wholly owned subsidiary of Sandoz
Ltd., a corporation organized under the laws of Switzerland ("Parent"), to
purchase all outstanding shares of common stock, par value $2.50 per share (the
"Common Stock"), of Gerber Products Company, a Michigan corporation (the
"Company"), and the associated preferred stock purchase rights issued pursuant
to the Rights Agreement, dated as of July 25, 1990, as amended, between the
Company and Harris Trust and Savings Bank, as Rights Agent (together with the
Common Stock, the "Shares"), at a price of $53.00 per Share, net to the seller
in cash, upon the terms and subject to the conditions set forth in the Offer.

We are the holder of record of Shares held by us for your account. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.

We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.

Your attention is invited to the following:

1. The tender price is $53.00 per Share, net to the seller in cash.

2. The Offer is being made for all outstanding Shares.

the Company, and recommends that shareholders accept the Offer and tender
their Shares pursuant to the Offer.

4. The Offer and withdrawal rights will expire at 5:00 p.m., New York
City time, on Thursday, June 30, 1994, unless the Offer is extended.

5. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the expiration of the Offer at
least a majority of the Shares outstanding on a fully diluted basis. The
Offer is also conditioned upon, among other things, the receipt of approval
of the Superintendent of Insurance of the State of New York for the
acquisition of control of Gerber Life Insurance Company, a wholly owned
subsidiary of the Company, by Parent pursuant to the Offer. It is not
expected that this condition will be satisfied before a substantial period
of time has elapsed.

6. Tendering shareholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, stock transfer taxes with respect to the purchase of
Shares by Purchaser pursuant to the Offer.

If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form contained
in this letter. An envelope in which to return your instructions to us is
enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless otherwise specified in your instructions. YOUR INSTRUCTIONS
SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR
BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.

The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and is being made to all holders of Shares. Purchaser is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. If Purchaser becomes aware
of any valid state statute prohibiting the making of the Offer or the acceptance
of Shares pursuant thereto, Purchaser will make a good faith effort to comply
with such state statute. If, after such good faith effort, Purchaser cannot
comply with such state statute, the Offer will not be made to (nor will tenders
be accepted from or on behalf of) the holders of Shares in such state. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of Purchaser by Morgan Stanley & Co. Incorporated or one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
<PAGE> 3

Instructions with Respect to the
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of

Gerber Products Company
by

SL Sub Corp.

The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated May 27, 1994, and the related Letter of Transmittal
(which together constitute the "Offer"), in connection with the offer by SL Sub
Corp., a Delaware corporation ("Purchaser") and an indirect wholly owned
subsidiary of Sandoz Ltd., a corporation organized under the laws of Switzerland
("Parent"), to purchase all outstanding shares of common stock, par value $2.50
per share (the "Common Stock"), of Gerber Products Company, a Michigan
corporation (the "Company"), and the associated preferred stock purchase rights
(together with the Common Stock, the "Shares" ).

This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.

<TABLE>
<S> <C>
SIGN HERE
Number of Shares to be Tendered:
Shares*
- ---------------------------------------------
Signature(s)

---------------------------------------------
Dated: , 199
---------------------------------------------
Please type or print name(s)

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

---------------------------------------------
Please type or print address

---------------------------------------------
Area Code and Telephone Number

---------------------------------------------
Taxpayer Identification or
Social Security Number
</TABLE>

- ---------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.

<PAGE> 1

Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights)

Gerber Products Company
at

$53.00 Net Per Share
by

SL Sub Corp.
an indirect wholly owned subsidiary

Sandoz Ltd.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON THURSDAY, JUNE 30, 1994, UNLESS THE OFFER IS EXTENDED.

May 27, 1994

To Participants in the Dividend Reinvestment Plan of Gerber Products Company:

Our nominee is the holder of record of Shares held for your account as a
participant in the Dividend Reinvestment Plan of the Company (the "Plan"). A
TENDER OF SUCH SHARES CAN BE MADE ONLY BY US THROUGH OUR NOMINEE AS THE HOLDER
OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS
FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER
SHARES HELD IN YOUR PLAN ACCOUNT.

We request instructions as to whether you wish to have us instruct our
nominee to tender on your behalf any or all of the Shares held in your Plan
account, upon the terms and subject to the conditions set forth in the Offer.

Your attention is directed to the following:

1. The tender price is $53.00 per Share, net to the Seller in cash.
<PAGE> 2

2. The Offer is being made for all outstanding Shares.

3. The Board of Directors of the Company unanimously has determined
that each of the Offer and the Merger (as defined in the Offer to Purchase)
is fair to, and in the best interests of, the shareholders of the Company,
and recommends that shareholders accept the Offer and tender their Shares
pursuant to the Offer.

4. The Offer and withdrawal rights will expire at 5:00 p.m., New York
City time, on Thursday, June 30, 1994, unless the Offer is extended.

If you wish to have us tender any or all of the Shares held in your Plan
account, please so instruct us by completing, executing and returning to us the
instruction form contained in this letter. An envelope in which to return your
instructions to us is enclosed. If you authorize tender of such Shares, all such
Shares will be tendered unless otherwise specified in your instructions. Your
instructions should be forwarded to us in ample time to permit us to instruct
our nominee to submit a tender on your behalf prior to the expiration of the
Offer.

The Offer is made solely by the Offer to Purchase and the Letter of
Transmittal and is being made to all holders of Shares. Purchaser is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. If Purchaser becomes aware
of any valid state statute prohibiting the making of the Offer or the acceptance
of Shares pursuant thereto, Purchaser will make a good faith effort to comply
with such state statute. If, after such good faith effort, Purchaser cannot
comply with such state statute, the Offer will not be made to (nor will tenders
be accepted from or on behalf of) the holders of Shares in such state. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of Purchaser by Morgan Stanley & Co. Incorporated or one or more
registered brokers or dealers licensed under the laws of such jurisdiction.

Very truly yours,

HARRIS TRUST AND SAVINGS BANK, AS
DIVIDEND REINVESTMENT AGENT
<PAGE> 3

PAYER'S NAME: CHEMICAL BANK

<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------

SUBSTITUTE PART I -- Taxpayer Identification -------------------------------
FORM W-9 Number -- For all accounts, enter Social Security Number
DEPARTMENT OF THE taxpayer identification number in the OR
TREASURY box at right. (For most individuals, ------------------------------
INTERNAL REVENUE SERVICE this is your social security number. Employer Identification
If you do not have a number, see Number
Obtaining a Number in the enclosed
Guidelines.) Certify by signing and (If awaiting TIN write
dating below. Note: If the account is "Applied For")
in more than one name, see the chart
in the enclosed Guidelines to
determine which number to give the
payer.
-----------------------------------------------------------------------
Payer's Request for PART II -- For Payees Exempt From Backup Withholding, see the enclosed
Taxpayer Guidelines and complete as instructed therein.
Identification Number
(TIN)
- -----------------------------------------------------------------------------------------------
CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am
waiting for a number to be issued to me) and
(2) I am not subject to backup withholding either because I have not been notified by the
Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result
of failure to report all interest or dividends, or the IRS has notified me that I am no
longer subject to backup withholding.
CERTIFICATE INSTRUCTIONS -- You must cross out item (2) above if you have been notified by the
IRS that you are subject to backup withholding because of underreporting interest or dividends
on your tax return. However, if after being notified by the IRS that you were subject to
backup withholding you received another notification from the IRS that you are no longer
subject to backup withholding, do not cross out item (2). (Also see instructions in the
enclosed Guidelines.)
- -----------------------------------------------------------------------------------------------
SIGNATURE DATE , 199
- -----------------------------------------------------------------------------------------------
</TABLE>

Gerber Products Company
by

SL Sub Corp.

This will instruct you, as Dividend Reinvestment Agent, to instruct your
nominee to tender the number of Shares indicated below (or, if no number is
indicated below, all Shares) that are held for the Plan account of the
undersigned, upon the terms and subject to the conditions set forth in the
Offer.

<TABLE>
<S> <C>
SIGN HERE
Number of Shares to be Tendered:
Shares*
- ---------------------------------------------
---------------------------------------------

---------------------------------------------
Signature(s)

---------------------------------------------
Dated: , 199
---------------------------------------------
Please type or print name(s)

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

---------------------------------------------
Please type or print address

---------------------------------------------
Area Code and Telephone Number

---------------------------------------------
Taxpayer Identification or
Social Security Number
</TABLE>

- ---------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.

<PAGE> 1

GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9

IRS INSTRUCTIONS
(SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE.)

PURPOSE OF FORM. -- A person who is required to file an information return
with the Internal Revenue Service (the IRS) must obtain your correct taxpayer
identification number (TIN) to report income paid to you, real estate
transactions, mortgage interest you paid, the acquisition or abandonment of
secured property, or contributions you made to an individual retirement account
(IRA). Use Form W-9 to furnish your correct TIN to the requester (the person
asking you to furnish your TIN), and, when applicable, (1) to certify that the
TIN you are furnishing is correct (or that you are waiting for a number to be
issued), (2) to certify that you are not subject to backup withholding, and (3)
to claim exemption from backup withholding if you are an exempt payee.
Furnishing your correct TIN and making the appropriate certifications will
prevent certain payments from being subject to backup withholding.

NOTE: IF A REQUESTER GIVES YOU A FORM OTHER THAN A W-9 TO REQUEST YOUR TIN,
YOU MUST USE THE REQUESTER'S FORM.

HOW TO OBTAIN A TIN. -- If you do not have a TIN, apply for one immediately.
To apply, get FORM SS-5, Application for a Social Security Card (SSN) (for
individuals), from your local office of the Social Security Administration, or
FORM SS-4, Application for Employer Identification Number (EIN) (for businesses
and all other entities), from your local IRS office.

To complete Form W-9, if you do not have a TIN, check the box in Part 3 of the
substitute Form W-9, sign and date the form, and give it to the requester.
Generally, you will then have 60 days to obtain a TIN and furnish it to the
requester. If the requester does not receive your TIN within 60 days, backup
withholding, if applicable, will begin and continue until you furnish your TIN
to the requester. For reportable interest or dividend payments, the payer must
exercise one of the following options concerning backup withholding during this
60-day period. Under option (1), a payer must backup withhold on any withdrawals
you make from your account after 7 business days after the requester receives
this form back from you. Under option (2), the payer must backup withhold on any
reportable interest or dividend payments made to your account, regardless of
whether you make any withdrawals. The backup withholding under option (2) must
begin no later than 7 business days after the requester receives this form back.
Under option (2), the payer is required to refund the amounts withheld if your
certified TIN is received within the 60-day period and you were not subject to
backup withholding during the period.

NOTE: CHECKING THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9 MEANS THAT YOU
HAVE ALREADY APPLIED FOR A TIN OR THAT YOU INTEND TO APPLY FOR ONE IN THE NEAR
FUTURE.

As soon as you receive your TIN, complete another Form W-9, include your TIN,
sign and date this form, and give it to the requester.

WHAT IS BACKUP WITHHOLDING? -- Persons making certain payments to you after
1992 are required to withhold and pay to the IRS 31% of such payments under
certain conditions. This is called "backup withholding." Payments that could be
subject to backup withholding include interest, dividends, broker and barter
exchange transactions, rents, royalties, nonemployee compensation, and certain
payments from fishing boat operators, but do not include real estate
transactions.

If you give the requester your correct TIN, make the appropriate
certifications, and report all your taxable interest and dividends on your tax
return, your payments will not be subject to backup withholding. Payments you
receive will be subject to backup withholding if:

(1) You do not furnish your TIN to the requester, or

(2) The IRS notifies the requester that you furnished an incorrect TIN, or

(3) You are notified by the IRS that you are subject to backup withholding
because you failed to report all your interest and dividends on your tax return
(for reportable interest and dividends only), or

(4) You fail to certify to the requester that you are not subject to backup
withholding under (3) above (for reportable interest and dividend accounts
opened after 1983 only), or

(5) You fail to certify your TIN. This applies only to reportable interest,
dividend, broker or barter exchange accounts opened after 1983, or broker
accounts considered inactive in 1983.

Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies. Certain payees and payments
are exempt from backup withholding and information reporting. See PAYEES AND
PAYMENTS EXEMPT FROM BACKUP WITHHOLDING, below, and EXEMPT PAYEES AND PAYMENTS
under SPECIFIC INSTRUCTIONS, on page 2, if you are an exempt payee.

PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING. -- The following is a
list of payees exempt from backup withholding and for which no information
reporting is required. For interest and dividends, all listed payees are exempt
except item (9). For broker transactions, payees listed in (1) through (13) and
a person registered under the Investment Advisers Act of 1940 who regularly acts
as a broker are exempt. Payments subject to reporting under sections 6041 and
6041A are generally exempt from backup withholding only if made to payees
described in Items (1) through (7), except that a corporation that provides
medical and health care services or bills and collects payments for such
services is not exempt from backup withholding or information reporting. Only
payees described in items (2) through (6) are exempt from backup withholding for
barter exchange transactions, patronage dividends, and payments by certain
fishing boat operators.

(1) A corporation.

(2) An organization exempt from tax under Section 501(a), or an IRA, or a
custodial account under section 403(b)(7).

(3) The United States or any of its agencies or instrumentalities.

(4) A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.

(5) A foreign government or any of its political subdivisions, agencies or
instrumentalities.

(6) An international organization or any of its agencies or
instrumentalities.

(7) A foreign central bank of issue.

(8) A dealer in securities or commodities required to register in the U.S. or
a possession of the U.S.

(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.

(10) A real estate investment trust.

(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.

(12) A common trust fund operated by a bank under section 584(a).

(13) A financial institution.

(14) A middleman known in the investment community as a nominee or listed in
the most recent publication of the American Society of Corporation Secretaries,
Inc., Nominee List.

(15) A trust exempt from tax under section 664 or described in section 4947.

Payments of dividends and patronage dividends generally not subject to backup
withholding also include the following:

- Payments to nonresident aliens subject to withholding under section 1441.

- Payments to partnerships not engaged in trade or business in the U.S. and
that have at least one nonresident partner.

- Payments of patronage dividends not paid in money.

- Payments made by certain foreign organizations.

Payments of interest generally not subject to backup withholding include the
following:

- Payments of interest on obligations issued by individuals.

NOTE: YOU MAY BE SUBJECT TO BACKUP WITHHOLDING IF THIS INTEREST IS $600 OR MORE
AND IS PAID IN THE COURSE OF THE PAYER'S TRADE OR BUSINESS AND YOU HAVE NOT
PROVIDED YOUR CORRECT TIN TO THE PAYER.

- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).

- Payments described in section 6049(b)(5) to nonresident aliens.

- Payments on tax-free covenant bonds under section 1451.

- Payments made by certain foreign organizations.

- Mortgage interest paid by you.

Payments that are not subject to information reporting are also not subject to
backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045,
6049, 6050A, and 6050N, and their regulations.

PENALTIES

FAILURE TO FURNISH TIN. -- If you fail to furnish your correct TIN to a
requester, you are subject to a penalty of $50 for each such failure unless your
failure is due to reasonable cause and not to willful neglect.

CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.

CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.

MISUSE OF TINS. -- If the requester discloses or uses TINs in violation of
Federal law, the requester may be subject to civil and criminal penalties.
<PAGE> 2

SPECIFIC INSTRUCTIONS

NAME. -- If you are an individual, you must generally provide the name shown
on your social security card. However, if you have changed your last name, for
instance, due to marriage, without informing the Social Security Administration
of the name change, please enter your first name, the last name shown on your
social security card and your new last name.

If you are a sole proprietor, you must furnish your individual name and either
your SSN or EIN. You may also enter your business name. Enter your name(s) as
shown on your social security card and/or as it was used to apply for your EIN
on Form SS-4.

SIGNING THE CERTIFICATION. --

(1) INTEREST, DIVIDEND, AND BARTER EXCHANGE ACCOUNTS OPENED BEFORE 1984 AND
BROKER ACCOUNTS CONSIDERED ACTIVE DURING 1983. -- You are required to furnish
your correct TIN, but you are not required to sign the certification.

(2) INTEREST, DIVIDEND, BROKER AND BARTER EXCHANGE ACCOUNTS OPENED AFTER 1983
AND BROKER ACCOUNTS CONSIDERED INACTIVE DURING 1983. -- You must sign the
certification or backup withholding will apply. If you are subject to backup
withholding and you are merely providing your correct TIN to the requester, you
must cross out item (2) in the certification before signing the form.

(3) REAL ESTATE TRANSACTIONS. -- You must sign the certification. You may
cross out item (2) of the certification.

(4) OTHER PAYMENTS. -- You are required to furnish your correct TIN, but you
are not required to sign the certification unless you have been notified of an
incorrect TIN. Other payments include payments made in the course of the
requester's trade or business for rents, royalties, goods (other than bills for
merchandise), medical and health care services, payments to a nonemployee for
services (including attorney and accounting fees), and payments to certain
fishing boat crew members.

(5) MORTGAGE INTEREST PAID BY YOU, ACQUISITION OR ABANDONMENT OF SECURED
PROPERTY, OR IRA CONTRIBUTIONS. -- You are requested to furnish your correct
TIN, but you are not required to sign the certification.

(6) EXEMPT PAYEES AND PAYMENTS. -- If you are exempt from backup withholding,
you should complete this form to avoid possible erroneous backup withholding.
Enter your correct TIN in Part 1, write "EXEMPT" in the block in Part 2, and
sign and date the form. If you are a nonresident alien or foreign entity not
subject to backup withholding, give the requester a completed Form W-8,
Certificate of Foreign Status.

(7) "AWAITING TIN". -- Follow the instructions under HOW TO OBTAIN A TIN, on
page 1, check the box in Part 3 of the Substitute Form W-9 and sign and date the
form.

SIGNATURE. -- For a joint account, only the person whose TIN is shown in Part
1 should sign the form.

PRIVACY ACT NOTICE. -- Section 6109 requires you to furnish your correct TIN
to persons who must file information returns with the IRS to report interest,
dividends, and certain other income paid to you, mortgage interest you paid, the
acquisition or abandonment of secured property, or contributions you made to an
IRA. The IRS uses the numbers for identification purposes and to help verify the
accuracy of your tax return. You must provide your TIN whether or not you are
required to file a tax return. Payers must generally withhold 31% of taxable
interest, dividends, and certain other payments to a payee who does not furnish
a TIN to a payer. Certain penalties may also apply.

WHAT NAME AND NUMBER TO GIVE THE REQUESTER

<TABLE>
<C> <S> <C>
---------------------------------------------------------------
GIVE THE NAME AND
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF:
- ---------------------------------------------------------------
1. Individual The individual
2. Two or more individuals (joint account) The actual owner of
the account or, if
combined funds, the
first individual on
the account(1)
3. Custodian account of a minor (Uniform The minor(2)
Gift to Minors Act)
4. a. The usual revocable savings trust The
(grantor is also trustee) grantor-trustee(1)
b. So-called trust account that is not The actual owner(1)
a legal or valid trust under state law
5. Sole proprietorship The owner(3)
---------------------------------------------------------------
GIVE THE NAME AND
EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION NUMBER
OF:
- ---------------------------------------------------------------
6. Sole proprietorship The owner(3)
7. A valid trust, estate or pension trust Legal entity(4)
8. Corporate The corporation
9. Association, club, religious, The organization
charitable, educational, or other
tax-exempt organization
10. Partnership The partnership
11. A broker or registered nominee The broker or nominee
12. Account with the Department of The public entity
Agriculture in the name of a public
entity (such as a state or local
government, school district, or prison)
that receives agricultural program
payments
</TABLE>

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

(1) List first and circle the name of the person whose number you furnish.

(2) Circle the minor's name and furnish the minor's social security number.

(3) Show the individual's name. You may also enter your business name. You may
use your SSN or EIN.

(4) List first and circle the name of the legal trust, estate, or pension trust.
(Do not furnish the TIN of the personal representative or trustee unless the
legal entity itself is not designated in the account title.)

NOTE: IF NO NAME IS CIRCLED WHEN THERE IS MORE THAN ONE NAME, THE NUMBER WILL BE
CONSIDERED TO BE THAT OF THE FIRST NAME LISTED.

<PAGE> 1
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell Shares. The Offer is made solely by the Offer to Purchase
dated May 27, 1994 and the related Letter of Transmittal, and is being made
to all holders of Shares. Purchaser is not aware of any state where the making
of the Offer is prohibited by administrative or judicial action pursuant to
any valid state statute. If Purchaser becomes aware of any valid state statute
prohibiting the making of the Offer or the acceptance of Shares pursuant
thereto, Purchaser will make a good faith effort to comply with such state
statute. If, after such good faith effort, Purchaser cannot comply with such
state statute, the Offer will not be made to (nor will tenders be accepted from
or on behalf of) the holders of Shares in such state. In any jurisdiction where
the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of
Purchaser by Morgan Stanley & Co. Incorporated or one or more registered
brokers or dealers licensed under the laws of such jurisdiction.

NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)

GERBER PRODUCTS COMPANY

$53.00 NET PER SHARE

SL SUB CORP.

AN INDIRECT WHOLLY OWNED SUBSIDIARY OF

SANDOZ LTD.

SL Sub Corp., a Delaware corporation (``Purchaser'') and an indirect
wholly owned subsidiary of Sandoz Ltd., a corporation organized under the laws
of Switzerland (``Parent''), is offering to purchase all outstanding shares of
common stock, par value $2.50 per share (the ``Common Stock''), of Gerber
Products Company, a Michigan corporation (the ``Company''), and the associated
preferred stock purchase rights issued pursuant to the Rights Agreement, dated
as of July 25, 1990, as amended, between the Company and Harris Trust and
Savings Bank, as Rights Agent (the ``Rights'' and, together with the Common
Stock, the ``Shares''), at a price of $53.00 per Share, net to the seller in
cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated May 27, 1994 (the ``Offer to Purchase''), and in the related
Letter of Transmittal (which together constitute the ``Offer''). Following the
Offer, Purchaser intends to effect the Merger described below.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON THURSDAY, JUNE 30, 1994, UNLESS THE OFFER IS EXTENDED.

THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST A
MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS. THE OFFER IS ALSO
CONDITIONED UPON, AMONG OTHER THINGS, THE RECEIPT OF APPROVAL OF THE
SUPERINTENDENT OF INSURANCE OF THE STATE OF NEW YORK (THE ``SUPERINTENDENT'')
FOR THE ACQUISITION OF CONTROL OF GERBER LIFE INSURANCE COMPANY, A WHOLLY OWNED
SUBSIDIARY OF THE COMPANY, BY PARENT PURSUANT TO THE OFFER. IT IS NOT EXPECTED
THAT THIS CONDITION WILL BE SATISFIED BEFORE A SUBSTANTIAL PERIOD OF TIME HAS
ELAPSED.

The Company owns Gerber Life Insurance Company, a stock life insurance
company domiciled in the State of New York. Under Section 1506 of the New York
Insurance Law, the acquisition of Shares pursuant to the Offer will require the
approval of the Superintendent. In connection with obtaining such approval,
Purchaser and Parent intend to file on or promptly following the date of the
Offer to Purchase an Application for Approval of Acquisition of Control with
the Superintendent. There are no specific requirements imposed on the
Superintendent as to the timing of the Superintendent's determination with
respect to such application. Accordingly, the consideration and determination
of the Superintendent may result in substantial delay in the consummation of
the Offer.

The Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of May 21, 1994, as amended (the ``Merger Agreement''), among Parent,
Purchaser and the Company. The Merger Agreement provides that, among other
things, as soon as practicable after the purchase of Shares pursuant to the
Offer and the satisfaction of the other conditions set forth in the Merger
Agreement and in accordance with the relevant provisions of the General
Corporation Law of the State of Delaware (``Delaware Law'') and the Michigan
Business Corporation Act (``Michigan Law''), Purchaser will be merged with and
into the Company (the ``Merger''). Following consummation of the Merger, the
Company will continue as the surviving corporation and will become an indirect
wholly owned subsidiary of Parent. At the effective time of the Merger (the
``Effective Time''), each Share issued and outstanding immediately prior to the
Effective Time (other than Shares held in the treasury of the Company or owned
by Purchaser, Parent or any direct or indirect wholly owned subsidiary of
Parent or of the Company) will be cancelled and converted automatically into
the right to receive $53.00 in cash, or any higher price that may be paid per
Share in the Offer, without interest.

THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT
EACH OF THE OFFER AND THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE
SHAREHOLDERS OF THE COMPANY, AND RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES PURSUANT TO THE OFFER.

<PAGE> 2

For purposes of the Offer, Purchaser will be deemed to have accepted
for payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when Purchaser gives oral or written notice to Chemical
Bank (the ``Depositary'') of Purchaser's acceptance for payment of such Shares
pursuant to the Offer. Upon the terms and subject to the conditions of the
Offer, payment for Shares accepted for payment pursuant to the Offer will be
made by deposit of the purchase price therefor with the Depositary, which will
act as agent for tendering shareholders for the purpose of receiving payments
from Purchaser and transmitting such payments to tendering shareholders whose
Shares have been accepted for payment. Under no circumstances will interest on
the purchase price for Shares be paid, regardless of any delay in making such
payment. 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 (i) the certificates evidencing such Shares (the ``Share Certificates'') or
timely confirmation of a book-entry transfer of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities (as defined
in Section 2 of the Offer to Purchase) pursuant to the procedure set forth in
Section 3 of the Offer to Purchase, (ii) the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees and (iii) any other documents required under the Letter of
Transmittal.

Purchaser expressly reserves the right, in its sole discretion (but
subject to the terms and conditions of the Merger Agreement), at any time and
from time to time, to extend for any reason the period of time during which the
Offer is open, including the occurrence of any of the conditions specified in
Section 14 of the Offer to Purchase, by giving oral or written notice of such
extension to the Depositary. Any such extension will be followed as promptly as
practicable by public announcement thereof, such announcement to be made no
later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled expiration date of the Offer. During any such extension,
all Shares previously tendered and not withdrawn will remain subject to the
Offer, subject to the rights of a tendering shareholder to withdraw such
shareholder's Shares.

Tenders of Shares made pursuant to the Offer are irrevocable except
that such Shares may be withdrawn at any time prior to 5:00 p.m., New York City
time, on Thursday, June 30, 1994 (or the latest time and date at which the
Offer, if extended by Purchaser, shall expire) and, unless theretofore accepted
for payment by Purchaser pursuant to the Offer, may also be withdrawn at any
time after July 25, 1994. For the withdrawal to be effective, a written,
telegraphic or facsimile transmission notice of withdrawal must be timely
received by the Depositary at one of its addresses set forth on the back cover
page of the Offer to Purchase. Any such notice of withdrawal must specify the
name of the person who tendered the Shares to be withdrawn, the number of
Shares to be withdrawn and the name of the registered holder of such Shares, if
different from that of the person who tendered such Shares. If Share
Certificates evidencing Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such Share
Certificates, the serial numbers shown on such Share Certificates must be
submitted to the Depositary and the signature(s) on the notice of withdrawal
must be guaranteed by an Eligible Institution (as defined in Section 3 of the
Offer to Purchase), unless such Shares have been tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the procedure
for book-entry transfer as set forth in Section 3 of the Offer to Purchase,
any notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares. All
questions as to the form and validity (including the time of receipt) of any
notice of withdrawal will be determined by Purchaser, in its sole discretion,
whose determination will be final and binding.

The information required to be disclosed by Rule 14d-6(e)(1)(vii) of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.

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

THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.

Questions and requests for assistance or for additional copies of the
Offer to Purchase and the related Letter of Transmittal and other tender offer
materials may be directed to the Information Agent or the Dealer Manager as set
forth below, and copies will be furnished promptly at Purchaser's expense. No
fees or commissions will be paid to brokers, dealers or other persons (other
than the Information Agent and the Dealer Manager) for soliciting tenders of
Shares pursuant to the Offer.

The Information Agent for the Offer is:

GEORGESON
& COMPANY INC.

Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
ALL OTHERS CALL TOLL FREE 1-800-223-2064

The Dealer Manager for the Offer is:

MORGAN STANLEY & CO.
INCORPORATED
1251 Avenue of the Americas
New York, New York 10020
(212) 703-8477

May 27, 1994

<PAGE> 1
SANDOZ

PRESS RELEASE

CONTACT:

Mr. Tim Croasdaile - Gerber Bjorn Edlund - Sandoz
(616) 928-2718 41-61-324-9001

FOR IMMEDIATE RELEASE: Laurie Smith - Burson-Marsteller
(212) 614-4952

SANDOZ LTD. TO ACQUIRE THE GERBER PRODUCTS COMPANY

SANDOZ TO COMMENCE TENDER OFFER AT $53 PER SHARE IN CASH

Fremont, Michigan and Basel, Switzerland, May 23, 1994 - Gerber
Products Company (NYSE-GEB) and Sandoz Ltd., Basel announced today that they
have entered into a definitive agreement for Sandoz to acquire all of the
issued and outstanding shares of common stock of Gerber at $53 per share in
cash, for an aggregate purchase price of approximately $3.7 billion. According
to the agreement, Sandoz will commence a tender offer for all outstanding
shares of common stock of Gerber at $53 per share in cash on or prior to May
27, 1994.

The $53 cash price represents a premium of approximately 53 percent
over Friday's closing price of Gerber stock on the New York Stock Exchange.

Sandoz' obligation to purchase shares in the offer will be subject to
the satisfaction or waiver of certain conditions, including the expiration or
termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and, as a result of Gerber's ownership of Gerber Life
Insurance Company, the receipt of the approval of the Superintendent of
Insurance of New York. The parties indicated that they expect to receive all
such approvals in due course and expect to close the tender offer in three to
six months.
<PAGE> 2
- 2 -

All shares not purchased in the tender offer will be converted into the
right to receive $53 per share in a second-step merger to be consummated as
soon as practicable after the tender offer.

Mr. Alfred Piergallini, Gerber Chairman, President and CEO said, "This
transaction represents exceptional value for our shareholders and is in the best
interest of our customers and associates. We spent many months assessing the
best course for Gerber. As I wrote to our shareholders in Gerber's Annual
Report, the most important ingredient in our future is further extending the
Gerber franchise in the international arena. To capitalize on the large
international potential for our products would require significant investments
over many years to build the necessary infrastructure. Joining with Sandoz
provides us with opportunities for dynamic growth in a much shorter time
horizon and with the necessary infrastructure already in place in most major
markets".

Dr. Marc Moret, Chariman of Sandoz, Ltd. said, "We are delighted to
welcome the Gerber Products Company into the Sandoz Group. This transaction
furthers our long-term commitment to building a high quality worldwide
nutrition business. Gerber is a unique company of the highest quality which
will fit perfectly as a cornerstone for this business in North America and
complement our strong nutrition business in Europe. We have been searching for
and acquiring high value-added nutritional products with market leadership
positions to add to our portfolio. Gerber's excellent image and exceptional
market strength in North America give us a strong base in child nutrition on
which we will expand internationally."

Dr. Rolf Schweizer, CEO of Sandoz, Ltd. said, "Sandoz has in place the
international structure and presence to capitalize on the Gerber brand and
expertise in child nutrition. Gerber's position in North America strengthens
our existing base of nutrition products there. This geographic balance will
provide a platform for dynamic growth. Gerber provides synergies for Sandoz
with advanced technologies in processing and packaging which we can apply in
Europe and the Far East".
<PAGE> 3
Gerber had sales of $1.2 billion in fiscal 1994 (89% in North America),
operating income of $212 million and net income of $127 million before
restructuring charges.

Gerber has for 65 years been a major developer, producer and
marketer of baby food and baby care products. In the U.S. Gerber is the
leading baby food company with over 70% of the market. The Company has a
strong presence in Mexico, Puerto Rico and Central America. Gerber employs
12,000 worldwide.

Sandoz Ltd. founded in 1886 discovers, develops, manufactures and
markets products and services in pharmaceuticals, nutrition, seeds, chemicals,
agro and the construction & environment business.

Sandoz Nutrition develops, manufactures and markets a wide range of
health-related products such as food drinks, baked goods, sport drinks, health
foods and clinical nutrition. Sandoz Nutrition operations were created by the
merger with the Wander Company in 1967. With Ovaltine as its base, Sandoz
has built a strong group of specialized nutrition products. Wasa and Roland
crispbread have strong market positions. Isostar sports drink is the market
leader in Europe. Health foods have shown good progress with the recent
acquisition of the preforma group and the joint venture with Gazzoni. Clinical
enteral nutrition and healthcare foodservice have grown from their U.S. base in
Minneapolis, Minn. to recent expansions in key European markets.

In 1993, Sandoz had sales of 15 billion Swiss Francs ($10.3 billion) and
net income of 1.7 billion Swiss Francs ($1.2 billion). The Nutrition division
had sales of $1.2 billion (14% in North America). Together with Gerber,
Sandoz Nutrition will now double its revenue world-wide to approximately $2.4
billion. Sandoz Nutrition reported sales growth of 25% in the 1st Quarter
1994.

Sandoz has operated in the U.S. for 75 years and employs approximately
11,000 in its U.S. subsidiaries. Sandoz Ltd. ADRs (American Depository
Receipts) are traded in the OTC market under the symbol, SDOZY.

<PAGE> 1

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

SANDOZ LTD.

SL SUB CORP.

and

GERBER PRODUCTS COMPANY

May 21, 1994
<PAGE> 2
TABLE OF CONTENTS

PAGE
----
RECITALS

ARTICLE I

THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.1 The Offer . . . . . . . . . . . . . . . . . 2
1.2 Company Action . . . . . . . . . . . . . . . 3

ARTICLE II

THE MERGER; EFFECTIVE TIME; CLOSING . . . . . . . . . . . . . . . . 5

2.1 The Merger . . . . . . . . . . . . . . . . . 5
2.2 Effective Time . . . . . . . . . . . . . . . 5
2.3 Closing . . . . . . . . . . . . . . . . . . 6

ARTICLE III

SURVIVING CORPORATION . . . . . . . . . . . . . . . . . . . . . . . 6

3.1 Articles of Incorporation . . . . . . . . . 6
3.2 By-Laws . . . . . . . . . . . . . . . . . . 6
3.3 Directors . . . . . . . . . . . . . . . . . 6
3.4 Officers . . . . . . . . . . . . . . . . . . 6

ARTICLE IV

MERGER CONSIDERATION; CONVERSION OR CANCELLATION
OF SHARES IN THE MERGER . . . . . . . . . . . . . . . . . 7

4.1 Share Consideration for the
Merger; Conversion or Cancella-
tion of Shares in the Merger . . . . . . . . 7
4.2 Shareholders' Meeting . . . . . . . . . . . 8
4.3 Payment for Shares in the Merger . . . . . . 9
4.4 Transfer of Shares After the
Effective Time . . . . . . . . . . . . . . . 11
4.5 Stock Options . . . . . . . . . . . . . . . 11

i
<PAGE> 3
PAGE
----
ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . 11

5.1 Corporate Organization and
Qualification . . . . . . . . . . . . . . . 11
5.2 Capitalization . . . . . . . . . . . . . . 12
5.3 Authority Relative to This
Agreement . . . . . . . . . . . . . . . . . 13
5.4 Consents and Approvals; No
Violation . . . . . . . . . . . . . . . . . 13
5.5 Compliance . . . . . . . . . . . . . . . . 15
5.6 SEC Reports; Financial
Statements . . . . . . . . . . . . . . . . 15
5.7 Absence of Certain Changes or
Events . . . . . . . . . . . . . . . . . . 17
5.8 Litigation . . . . . . . . . . . . . . . . 18
5.9 Proxy Statement; Offer
Documents . . . . . . . . . . . . . . . . . 18
5.10 Taxes . . . . . . . . . . . . . . . . . . . 19
5.11 Employee Benefit Plans; Labor
Matters . . . . . . . . . . . . . . . . . . 19
5.12 Environmental Laws and
Regulations . . . . . . . . . . . . . . . . 21
5.13 Tangible Property . . . . . . . . . . . . . 21
5.14 Intangible Property . . . . . . . . . . . . 22
5.15 Certain Agreements . . . . . . . . . . . . 22
5.16 Brokers and Finders . . . . . . . . . . . . 22
5.17 Opinions of Financial Advisors . . . . . . 23

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF PARENT AND
NEWCO . . . . . . . . . . . . . . . . . . . . . . . . . 23

6.1 Corporate Organization and
Qualification . . . . . . . . . . . . . . . 23
6.2 Authority Relative to This
Agreement . . . . . . . . . . . . . . . . . 23
6.3 Consents and Approvals; No
Violation . . . . . . . . . . . . . . . . . 24
6.4 Annual Report; Financial
Statements . . . . . . . . . . . . . . . . 25
6.5 Proxy Statement; Schedule
14-D-9 . . . . . . . . . . . . . . . . . . 25
6.6 Financing . . . . . . . . . . . . . . . . . 25
6.7 Interim Operations of Newco . . . . . . . . 25

ii
<PAGE> 4
PAGE
----
6.8 Brokers and Finders . . . . . . . . . . . . 25

ARTICLE VII

ADDITIONAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . 26

7.1 Conduct of Business of the
Company . . . . . . . . . . . . . . . . . . 26
7.2 Acquisition Proposals . . . . . . . . . . . 29
7.3 All Reasonable Efforts . . . . . . . . . . . 30
7.4 Access to Information . . . . . . . . . . . 31
7.5 Publicity . . . . . . . . . . . . . . . . . 32
7.6 Indemnification of Directors and
Officers . . . . . . . . . . . . . . . . . . 32
7.7 Filings under the NYIC . . . . . . . . . . . 33
7.8 Employees . . . . . . . . . . . . . . . . . 33
7.9 Company Board Representation;
Section 14(f) . . . . . . . . . . . . . . . 35
7.10 Notification of Certain
Matters . . . . . . . . . . . . . . . . . . 36

ARTICLE VIII

CONDITIONS TO CONSUMMATION OF THE MERGER . . . . . . . . . . . . . 37

8.1 Condition to Each Party's Obliga-
tions to Effect the Merger . . . . . . . . . 37

ARTICLE IX

TERMINATION; WAIVER . . . . . . . . . . . . . . . . . . . . . . . . 38

9.1 Termination by Mutual Consent . . . . . . . 38
9.2 Termination by Either Parent
or the Company . . . . . . . . . . . . . . . 38
9.3 Termination by Parent . . . . . . . . . . . 38
9.4 Termination by the Company . . . . . . . . . 39
9.5 Effect of Termination . . . . . . . . . . . 40
9.6 Extension; Waiver . . . . . . . . . . . . . 40

ARTICLE X

MISCELLANEOUS AND GENERAL . . . . . . . . . . . . . . . . . . . . . 40

10.1 Payment of Expenses
and other Payments . . . . . . . . . . . . 40
10.2 Survival of Representations
and Warranties; Survival of
Confidentiality . . . . . . . . . . . . . 41

iii
<PAGE> 5
PAGE
----
10.3 Modification or Amendment . . . . . . . . 41
10.4 Waiver of Conditions . . . . . . . . . . . 42
10.5 Counterparts . . . . . . . . . . . . . . . 42
10.6 Governing Law . . . . . . . . . . . . . . 42
10.7 Notices . . . . . . . . . . . . . . . . . 42
10.8 Entire Agreement; Assignment . . . . . . . 43
10.9 Parties in Interest . . . . . . . . . . . 43
10.10 Certain Definitions . . . . . . . . . . . 44
10.11 Obligation of Parent . . . . . . . . . . . 44
10.12 Validity . . . . . . . . . . . . . . . . . 45
10.13 Captions . . . . . . . . . . . . . . . . . 45
10.14 Specific Performance . . . . . . . . . . . 45

ANNEX A

iv
<PAGE> 6
AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of May 21,
1994, by and among Sandoz Ltd., a corporation organized under the laws of
Switzerland ("Parent"), SL Sub Corp., a Delaware corporation and an indirect
wholly owned subsidiary of Parent ("Newco"), and Gerber Products Company, a
Michigan corporation (the "Company").

RECITALS

WHEREAS, the Board of Directors of the Company, including all of the
disinterested directors of the Company, has, subject to the conditions of this
Agreement, determined that each of the Offer and the Merger (each as defined
below) is in the best interests of the shareholders of the Company and approved
and adopted this Agreement and the transactions contemplated hereby; and

WHEREAS, in furtherance thereof, it is proposed that Newco shall make a
tender offer (the "Offer") to acquire all of the outstanding shares of common
stock, par value $2.50 per share, of the Company (the "Shares"), together with
the associated Rights (as hereafter defined), at a price of $53.00 per Share
(such amount, or any greater amount per Share paid pursuant to the Offer, being
hereinafter referred to as the "Per Share Amount"), net to the seller in cash,
in accordance with the terms and subject to the conditions of this Agreement;
and

WHEREAS, Parent, Newco and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger.

NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, Parent,
Newco and the Company hereby agree as follows:

<PAGE> 7
ARTICLE I

THE OFFER

1.1 The Offer. (a) Provided that this Agreement shall not have been
terminated in accordance with Article IX and none of the events or conditions
set forth in Annex A shall have occurred and be existing, Newco shall commence
the Offer not later than the fifth business day from and including the date of
initial public announcement of this Agreement. Newco shall accept for payment
Shares which have been validly tendered and not withdrawn pursuant to the Offer
at the earliest practicable time following expiration of the Offer that all
conditions to the Offer shall have been satisfied or waived by Newco. The
obligation of Newco to commence the Offer shall be subject only to the
conditions set forth in Annex A hereto, and the obligation of Newco to accept
for payment, purchase and pay for Shares tendered pursuant to the Offer shall be
subject only to such conditions and to the further condition that a number of
Shares representing not less than a majority of the Shares outstanding on a
fully diluted basis shall have been validly tendered and not withdrawn prior to
the expiration of the Offer (the "Minimum Condition"). Newco expressly reserves
the right to waive any such condition, to increase the price per Share payable
in the Offer and to make any other changes in the terms and conditions of the
Offer; provided, however, that unless previously approved by the Company in
writing, no change in the Offer may be made (i) which decreases the price per
Share payable in the Offer, (ii) which changes the form of consideration to be
paid in the Offer, (iii) which reduces the maximum number of Shares to be
purchased in the Offer or the Minimum Condition, (iv) which imposes conditions
to the Offer in addition to those set forth in Annex A hereto or which modifies
the conditions set forth in Annex A or (v) which amends any other term of the
Offer in a manner adverse to the holders of the Shares. Notwithstanding the
foregoing, Newco shall, and Parent agrees to cause Newco to, extend the Offer at
any time up to November 30, 1994 for one or more periods of not more than 10
Business Days, if at the initial expiration date of the Offer, or any extension
thereof, the condition to the Offer requiring approval of the New York
Department (as defined herein) for Parent's indirect acquisition of GLIC (as
defined herein) is not satisfied or waived. Subject to the terms

2
<PAGE> 8
and conditions of the Offer and this Agreement, Newco shall, and Parent shall
cause Newco to, pay for all Shares validly tendered and not withdrawn pursuant
to the Offer that Newco becomes obligated to purchase pursuant to the Offer as
soon as practicable after the expiration of the Offer.

(b) As soon as practicable on the date of commencement of the Offer,
Newco shall file with the Securities and Exchange Commission (the "SEC") a
Tender Offer Statement on Schedule 14D-1 with respect to the Offer (together
with any supplements or amendments thereto, the "Offer Documents"). The Offer
Documents will comply in all material respects with the provisions of applicable
federal securities laws. Parent, Newco and the Company each agree to correct
promptly any information provided by them for use in the Offer Documents if and
to the extent that it shall have become false or misleading in any material
respect and Newco further agrees to take all steps necessary to cause the Offer
Documents as so corrected to be filed with the SEC and to be disseminated to
holders of Shares, in each case as and to the extent required by applicable
federal securities laws. The Company and its counsel shall be given an
opportunity to review and comment upon the Offer Documents and any amendments
thereto prior to the filing thereof with the SEC.

1.2 Company Action. (a) The Company hereby approves of and consents
to the Offer and represents that the Board of Directors, including all of the
disinterested directors, at a meeting duly called and held, has, subject to the
terms and conditions set forth herein, unanimously (i) approved this Agreement
and the transactions contemplated hereby, including the Offer and the Merger,
and that such approval constitutes approval of the Offer, this Agreement and the
Merger for purposes of (A) Section 775 through Section 784 of the Business
Corporation Act of the State of Michigan (the "BCA"), (B) Article VIII of the
Company's Restated Articles of Incorporation and (C) the Rights Agreement (as
herein defined in Section 4.1(a)), and (ii) resolved to recommend that the
shareholders of the Company accept the Offer, tender their Shares thereunder to
Newco and approve and adopt this Agreement and the Merger; provided, that such
recommendation may be withdrawn, modified or amended if in the opinion of the
Board of Directors, after consultation

3
<PAGE> 9
with independent legal counsel, such recommendation would be inconsistent with
its fiduciary duties to the Company's shareholders under applicable law. The
Company consents to the inclusion of such recommendation and approval in the
Offer Documents.

(b) The Company hereby agrees to file with the SEC as soon as
practicable on the date of commencement of the Offer a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
amendments or supplements thereto, the "Schedule 14D-9") containing the
recommendation described in Section 1.2(a). The Schedule 14D-9 will comply in
all material respects with the provisions of applicable federal securities
laws. The Company, Parent and Newco each agree promptly to correct any
information provided by them for use in the Schedule 14D-9 if and to the extent
that it shall have become false or misleading in any material respect and the
Company further agrees to take all steps necessary to cause the Schedule 14D-9
as so corrected to be filed with the SEC and disseminated to the holders of
Shares, in each case as and to the extent required by applicable federal
securities laws. Notwithstanding anything to the contrary in this Agreement,
the Board of Directors may withdraw, modify or amend its recommendation if in
the opinion of the Board of Directors, after consultation with independent
legal counsel, such recommendation would be inconsistent with its fiduciary
duties to the Company's shareholders under applicable law. Any such
withdrawal, modification or amendment shall not constitute a breach of this
Agreement.

(c) In connection with the Offer, the Company shall promptly furnish
Parent and Newco with mailing labels, security position listings and any
available listing or computer files containing the names and addresses of the
record holders of the Shares as of a recent date and shall furnish Newco with
such additional information and assistance (including, without limitation,
updated lists of shareholders, mailing labels and lists of securities positions)
as Newco or its agents may reasonably request in communicating the Offer to the
record and beneficial holders of Shares. Subject to the requirements of
applicable law, and except for such steps as are necessary to disseminate the
Offer Documents and any other documents necessary to consummate the Offer or the
Merger, Parent, Newco and their affiliates, associ-

4
<PAGE> 10
ates, agents and advisors shall use the information contained in any such
labels, listings and files only in connection with the Offer and the Merger,
and, if this Agreement shall be terminated, will deliver to the Company all
copies of such information then in their possession.

ARTICLE II

THE MERGER; EFFECTIVE TIME; CLOSING

2.1 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 2.2), the Company and
Newco shall consummate a merger (the "Merger") pursuant to which (a) Newco shall
be merged with and into the Company and the separate corporate existence of
Newco shall thereupon cease, (b) the Company shall be the successor or surviving
corporation in the Merger and shall continue to be governed by the laws of the
State of Michigan, and (c) the separate corporate existence of the Company with
all its rights, privileges, immunities, powers and franchises shall continue
unaffected by the Merger. The corporation surviving the Merger is sometimes
hereinafter referred to as the "Surviving Corporation." The Merger shall have
the effects set forth in the BCA and the Delaware General Corporation Law (the
"DGCL").

2.2 Effective Time. Parent, Newco and the Company will cause an
appropriate Certificate of Merger (the "Certificate of Merger") to be executed
and filed on the date of the Closing (as defined in Section 2.3) (or on such
other date as Parent and the Company may agree) with the Michigan Department of
Commerce, Corporation and Securities Bureau, Corporation Division as provided in
the BCA and the Secretary of State of the State of Delaware as provided in the
DGCL. The Merger shall become effective on the date on which the Certificate of
Merger has been duly filed with the Michigan Department of Commerce,
Corporations and Securities Bureau, Corporation Division and the Secretary of
State of the State of Delaware or such time as is agreed upon by the parties and
specified in the Certificate of Merger, and such time is hereinafter referred to
as the "Effective Time."

5
<PAGE> 11
2.3 Closing. The closing of the Merger (the "Closing") shall take
place (a) at the offices of Skadden, Arps, Slate, Meagher & Flom, 333 West
Wacker Drive, Chicago, Illinois, at 10:00 a.m. on the first business day
following the date on which the last of the conditions set forth in Article VIII
hereof shall be fulfilled or waived in accordance with this Agreement or (b) at
such other place, time and date as Parent and the Company may agree.

ARTICLE III

SURVIVING CORPORATION

3.1 Articles of Incorporation. The Restated Articles of
Incorporation of the Company, as in effect immediately prior to the Effective
Time, shall be the Articles of Incorporation of the Surviving Corporation until
thereafter amended as provided by law and such Restated Articles of
Incorporation.

3.2 By-Laws. The By-Laws of the Company, as in effect immediately
prior to the Effective Time, shall be the By-Laws of the Surviving Corporation
until thereafter amended as provided by law, the Restated Articles of
Incorporation of the Surviving Corporation and such By-Laws.

3.3 Directors. The directors of Newco at the Effective Time shall,
from and after the Effective Time, be the initial directors of the Surviving
Corporation until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Surviving Corporation's Articles of Incorporation and By-Laws.

3.4 Officers. The officers of the Company at the Effective Time
shall, from and after the Effective Time, be the initial officers of the
Surviving Corporation until their successors have been duly elected or appointed
and qualified or until their earlier death, resignation or removal in accordance
with the Surviving Corporation's Articles of Incorporation and By-Laws.

6
<PAGE> 12
ARTICLE IV

MERGER CONSIDERATION; CONVERSION OR CANCELLATION OF
SHARES IN THE MERGER

4.1 Share Consideration for the Merger; Conversion or Cancellation of
Shares in the Merger. At the Effective Time, by virtue of the Merger and
without any action on the part of the holders of any Shares or capital stock of
Newco:

(a) Each Share, together with the associated right to purchase
shares of Series A Junior Participating Preferred Stock (the "Rights"),
pursuant to the Rights Agreement, dated as of July 25, 1990, by and between the
Company and Harris Trust and Savings Bank, as Rights Agent (the "Rights
Agreement"), issued and outstanding immediately prior to the Effective Time
(other than Shares and Rights to be cancelled and retired pursuant to Section
4.1(b)) shall, by virtue of the Merger and without any action on the part of
Newco, the Company or the holder thereof, be cancelled and extinguished and
converted into the right to receive, pursuant to Section 4.3, the Per Share
Amount in cash (the "Merger Consideration"), payable to the holder thereof,
without interest thereon, less any required withholding of taxes, upon the
surrender of the certificate formerly representing such Share.

(b) At the Effective Time, each Share and Right, if any, issued and
outstanding and owned by any of Parent, Newco or any direct or indirect wholly
owned subsidiary of Parent, or any of the Company's direct or indirect wholly
owned subsidiaries or authorized but unissued or treasury shares held by the
Company immediately prior to the Effective Time shall cease to be outstanding,
be cancelled and retired without payment of any consideration therefor and
cease to exist.

(c) At the Effective Time, each share of common stock of Newco
issued and outstanding immediately prior to the Effective Time shall be
converted into one validly issued, fully paid and nonassessable share of
common stock of the Surviving Corporation.

7
<PAGE> 13
4.2 Shareholders' Meeting. (a) The Company, acting through the
Board of Directors, shall, if required by applicable law in order to consummate
the Merger:

(i) duly call, give notice of, convene and hold a special
meeting of its shareholders (the "Shareholders Meeting"), to be held as
soon as practicable after Newco shall have purchased Shares pursuant to
the Offer, for the purpose of considering and taking action upon this
Agreement and the transactions contemplated hereby;

(ii) prepare and file the Proxy Statement (as defined in
Section 5.9 hereof) with the SEC as promptly as practicable after the
purchase of Shares by Newco pursuant to the Offer;

(iii) include in the Proxy Statement the unanimous
recommendation of the Board of Directors that shareholders of the
Company vote in favor of the approval and adoption of this Agreement
and the transactions contemplated hereby unless, in the opinion of
the Board of Directors after consultation with independent legal
counsel, the inclusion of such recommendation would be inconsistent
with its fiduciary duties to the Company's shareholders under
applicable law; and

(iv) use all reasonable efforts (A) to obtain and furnish the
information required to be included by it in the Proxy Statement and,
after consultation with Parent and Newco, respond promptly to any
comments made by the SEC with respect to the Proxy Statement and any
preliminary version thereof and cause the Proxy Statement to be mailed
to its shareholders at the earliest practicable time following the
expiration or termination of the Offer and (B) to obtain the necessary
approvals by its shareholders of this Agreement and the transactions
contemplated hereby unless, in the opinion of the Board of Directors
after consultation with independent legal counsel, obtaining such
approvals would be inconsistent with its

8
<PAGE> 14
fiduciary duties to the Company's shareholders under applicable law.

At such meeting, Parent, Newco and their affiliates will vote all Shares
owned by them in favor of approval and adoption of this Agreement and the
transactions contemplated hereby.

(b) Notwithstanding the foregoing, in the event that Newco shall
acquire at least 90 percent of the then outstanding Shares, the parties hereto
agree, at the request of Newco, subject to Article VIII, to take all necessary
and appropriate action to cause the Merger to become effective, in accordance
with Section 711 of the BCA and Section 253 of the DGCL, as soon as reasonably
practicable after such acquisition, without a meeting of the shareholders of the
Company.

4.3 Payment for Shares in the Merger. The manner of making payment
for Shares in the Merger shall be as follows:

(a) At the Effective Time, Newco shall make available to a bank or
trust company located in the United States with assets in excess of $500,000,000
selected by Parent after consultation with the Company (the "Paying Agent"), for
the benefit of the holders of Shares, the funds necessary to make the payments
contemplated by Section 4.1 (the "Exchange Fund"). The Paying Agent shall,
pursuant to irrevocable instructions, deliver the Merger Consideration out of
the Exchange Fund. The Exchange Fund, other than any interest thereon (which
shall be retained by Parent), shall not be used for any other purpose.

(b) Promptly after the Effective Time, the Paying Agent shall mail
to each holder of record of a certificate or certificates which immediately
prior to the Effective Time represented outstanding Shares, other than holders
of certificates which represent Shares cancelled and retired pursuant to Section
4.1(b) (the "Certificates"), (i) a form of letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to the
Paying Agent) and (ii) instructions for use in effecting the surrender of the
Certificates for payment therefor.

9
<PAGE> 15
Upon surrender of Certificates for cancellation to the Paying Agent, together
with such letter of transmittal duly completed and executed and any other
documents required by such instructions, the holder of such Certificates shall
be entitled to receive for each of the Shares formerly represented by such
Certificates the Merger Consideration, without any interest thereon, less any
required withholding of taxes, and the Certificates so surrendered shall
forthwith be cancelled. If payment is to be made to a person other than the
person in whose name a Certificate so surrendered is registered on the stock
transfer books of the Company, it shall be a condition of payment that the
Certificate so surrendered shall be properly endorsed and otherwise in proper
form for transfer and that the person requesting such payment shall pay to the
Paying Agent any transfer or other taxes required by reason of the payment to a
person other than the registered holder of the Certificate surrendered, or
shall establish to the satisfaction of the Paying Agent that such tax has been
paid or is not applicable. Until surrendered in accordance with the provisions
of this Section 4.3(b), each Certificate (other than Certificates representing
Shares held in the Company's treasury or by Newco, or by any subsidiary of the
Company or Newco) shall represent for all purposes only the right to receive
for each Share represented thereby the Merger Consideration.

(c) At any time following the sixth month after the Effective Time,
the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds which had been made available to the Paying Agent and
not disbursed to holders of Certificates (including, without limitation, all
interest and other income received by the Paying Agent in respect of all funds
made available to it), and thereafter such holders shall be entitled to look
only to the Surviving Corporation (subject to abandoned property, escheat and
other similar laws) as general creditors thereof with respect to any Merger
Consideration that may be payable upon due surrender of the Certificates held by
them. Notwithstanding the foregoing, neither the Surviving Corporation nor the
Paying Agent shall be liable to any holder of a Certificate for any Merger
Consideration delivered in respect of such Certificate or the Shares formerly
represented thereby to a public official pursuant to any abandoned property,
escheat or other similar law.

10
<PAGE> 16
4.4 Transfer of Shares After the Effective Time. No transfers of
Shares shall be made on the stock transfer books of the Company after the close
of business on the day prior to the date of the Effective Time.

4.5 Stock Options. After the Effective Time, each option ("Option")
which has been granted under the Company's Stock Ownership Program or any
predecessor plans thereto (together, the "Option Plans") and is outstanding at
the Effective Time, whether or not then exercisable, will be exchanged for, and
the holder of each such Option will be entitled to receive upon surrender of the
Option for cancellation, cash equal to the product of the following:

(a) the difference between the Per Share Amount and the exercise
price of each such Option; times

(b) the number of Shares covered by such Option.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to Parent and Newco that:

5.1 Corporate Organization and Qualification. Each of the Company
and its subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of its respective jurisdiction of incorporation and
is qualified and in good standing as a foreign corporation in each jurisdiction
where the properties owned, leased or operated, or the business conducted, by it
require such qualification, except where failure to so qualify or be in good
standing would not, individually or in the aggregate, have a Material Adverse
Effect (as hereinafter defined in Section 10.10). Each of the Company and its
subsidiaries has all requisite power and authority (corporate or otherwise) to
own, lease and operate its properties and to carry on its business as it is now
being conducted, except where the failure to have such power and authority would
not have a Material Adverse Effect. The Company has heretofore made available
to Parent complete and correct copies of its Restated

11
<PAGE> 17
Articles of Incorporation and By-Laws. Such Restated Articles of Incorporation
and By-Laws are in full force and effect and the Company is not in violation of
any provision of its Restated Articles of Incorporation or By-Laws. Set forth
on Schedule 5.1 is a true and complete list of all direct and indirect
subsidiaries of the Company, setting forth, for each subsidiary, its name, its
jurisdiction of organization and the percentage ownership of its authorized
capital stock or other equity interests by the Company and its subsidiaries.

5.2 Capitalization. The authorized capital stock of the Company
consists of (i) 200,000,000 Shares, of which 69,519,935 Shares are issued and
outstanding (without taking into account any changes as a result of the issuance
of shares pursuant to the exercise of outstanding options or the issuance of up
to 15,000 shares pursuant to the Company's Stock Ownership Plan or Annual Bonus
Plan) and (ii) 5,000,000 shares of preferred stock, par value $1.00 per share,
none of which is issued or outstanding. All of the outstanding shares of
capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable and were not issued in violation of any
preemptive rights. As of the date hereof, options to acquire 1,705,537 Shares
were outstanding. Except as set forth on Schedule 5.1 or 5.2, (i) as of the
date hereof all outstanding shares of capital stock of the Company's
subsidiaries have been duly authorized and validly issued and are fully paid and
nonassessable and were not issued in violation of any preemptive rights and (ii)
except as would not have a Material Adverse Effect, are owned by the Company or
a direct or indirect wholly owned subsidiary of the Company, free and clear of
all liens, charges, encumbrances, claims, rights of first refusal, limitations
on voting rights and options of any nature. Except as set forth above and on
Schedule 5.2, there are not as of the date hereof any outstanding or authorized
options, warrants, calls, rights (including preemptive rights), commitments or
any other agreements of any character which the Company or any of its
Significant Subsidiaries or, except as would not have a Material Adverse Effect,
any of its other subsidiaries is a party to, or may be bound by, requiring it to
issue, transfer, sell, purchase, redeem or acquire any shares of capital stock
or any securities or rights convertible into, exchangeable for, or evidencing
the right to subscribe for, any shares of capital stock

12
<PAGE> 18
of the Company or any of its subsidiaries, or to provide funds to, or make a
investment (in the form of a loan, capital contribution or otherwise) in, any
of the Company's subsidiaries or any other person.

5.3 Authority Relative to This Agreement. (a) The Company has the
requisite power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. This Agreement and the
consummation by the Company of the transactions contemplated hereby have been
duly and validly authorized by the Board of Directors of the Company and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby
(other than, with respect to the Merger, the approval and adoption of this
Agreement by the shareholders of the Company, including Newco, in accordance
with Section 703a of the BCA and the Company's Restated Articles of
Incorporation). This Agreement has been duly and validly executed and delivered
by the Company and, assuming this Agreement constitutes the valid and binding
agreement of Parent and Newco, constitutes the valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except that the enforcement hereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law).

(b) The Board of Directors of the Company has duly and validly
approved and taken all corporate action required to be taken by the Board of
Directors for the consummation of the transactions contemplated by this
Agreement, including the Offer, the acquisition of Shares pursuant to the Offer
and the Merger, including but not limited to, all actions required to render the
provisions of Section 775 through Section 784 of the BCA restricting business
combinations with "interested shareholders" and Article VIII of the Company's
Restated Articles of Incorporation inapplicable to such transactions. The
Company has taken all action necessary to opt out of Sections 790 through 799 of
the BCA.

5.4 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement nor

13
<PAGE> 19
the consummation by the Company of the transactions contemplated hereby will
(a) conflict with or result in any breach of any provision of the respective
Articles of Incorporation or By-Laws of the Company or any of its Significant
Subsidiaries; (b) except as set forth on Schedule 5.4(b), require any consent,
approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, except (i) in connection with the
applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), (ii) pursuant to the applicable requirements
of the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the "Securities Act"), and the Exchange Act, (iii) the
filing of the Certificate of Merger pursuant to the BCA and the DGCL and
appropriate documents with the relevant authorities of other states in which
the Company or any of its subsidiaries is authorized to do business, (iv) in
connection with any state or local tax which is attributable to the beneficial
ownership of the Company's or its subsidiaries' real property, if any
(collectively, the "Gains Taxes"), (v) as may be required by any applicable
state securities or "blue sky" laws or state takeover laws, (vi) the approval
of the Insurance Department of the State of New York (the "New York
Department") and such filings and consents which may be required under the
insurance laws of any state in which Gerber Life Insurance Company ("GLIC")
does business, (vii) such filings, consents, approvals, orders, registrations
and declarations as may be required under the laws of any foreign country in
which the Company or any of its subsidiaries conducts any business or owns any
assets or (viii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
in the aggregate have a Material Adverse Effect; (c) except as set forth on
Schedule 5.4(c), result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration or lien or other charge or
encumbrance) under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, permit, franchise, license, agreement or
other instrument or obligation to which the Company or any of its subsidiaries
or any of their assets may be bound or affected, except for such violations,
breaches and defaults (or rights of termination, cancellation or acceleration
or lien or

14
<PAGE> 20
other charge or encumbrance) as to which requisite waivers or consents have
been obtained or which, individually or in the aggregate, would not have a
Material Adverse Effect; or (d) assuming the consents, approvals,
authorizations or permits and filings or notifications referred to in this
Section 5.4 are duly and timely obtained or made and, with respect to the
Merger, the approval of this Agreement by the Company's shareholders has been
obtained, violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Company or any of its subsidiaries or to any of
their respective assets, except for violations which would not individually or
in the aggregate have a Material Adverse Effect.

5.5 Compliance. Neither the Company nor any of its subsidiaries is
in conflict with, or in default or violation of, (i) any order, writ,
injunction, decree, statute, rule or regulation applicable to the Company or any
of its subsidiaries or by which any property or asset of the Company or any of
its subsidiaries is bound or affected, or (ii) any note, bond, mortgage,
indenture, lease, permit, franchise, license, agreement or other instrument or
obligation to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or any property or asset of the
Company or any of its subsidiaries is bound or affected, except for any such
conflicts, defaults or violations that would not, individually or in the
aggregate, have a Material Adverse Effect.

5.6 SEC Reports; Financial Statements.

(a) The Company has filed all forms, reports and documents required
to be filed by it with the SEC since March 31, 1993 pursuant to the federal
securities laws and the SEC rules and regulations thereunder, all of which, as
of their respective dates, complied in all material respects with all applicable
requirements of the Securities Act and the Exchange Act (collectively, the
"Company SEC Reports"). None of the Company SEC Reports, including, without
limitation, any financial statements or schedules included therein, as of their
respective dates, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. None of the

15
<PAGE> 21
Company's subsidiaries is required to register any of its outstanding
securities under the Securities Act or the Exchange Act.

(b) The consolidated statements of financial position and the related
consolidated statements of operations, shareholders' equity and cash flows
(including the related notes thereto) of the Company for the fiscal year ended
March 31, 1994 set forth on Schedule 5.6(b) hereto (including the related notes
thereto, the "1994 Financial Statements") comply in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles applied on a basis consistent with prior periods
(except as otherwise noted therein), and present fairly the consolidated
financial position of the Company and its consolidated subsidiaries as of their
respective dates, and the consolidated results of their operations and their
cash flows for the periods presented therein.

(c) Except as set forth in the 1994 Financial Statements, neither
the Company nor any of its subsidiaries has any liability or obligation of any
nature (whether accrued, absolute, contingent or otherwise) which would be
required to be reflected on a balance sheet, or in the notes thereto, prepared
in accordance with generally accepted accounting principles, except for
liabilities and obligations incurred in the ordinary course of business
consistent with past practice since March 31, 1994 which would not, individually
or in the aggregate, have a Material Adverse Effect. Set forth on Schedule
5.6(c) is a description, as of the date hereof, of all interest rate and
currency exchange agreements and all uncovered commodities trading positions in
excess of normal supply requirements.

(d) The Company has delivered to Parent true and complete copies of
(i) the annual statement of GLIC filed with the New York Department for the year
ended December 31, 1993, together with all related notes, exhibits and schedules
thereto (the "GLIC Annual Statement"), and (ii) the audited statutory basis
balance sheet of GLIC for the year ended December 31, 1993, and the related
audited statutory basis statements of operations, changes in capital stock and
surplus and cash

16
<PAGE> 22
flows, together with all related notes, accompanied by the report thereon of
Ernst & Young, GLIC's independent auditors (the "GLIC Audited Statements").
Except as would not result in a Material Adverse Effect, the GLIC Annual
Statement and the GLIC Audited Statements were prepared in accordance with
statutory accounting principles applied on a basis consistent with prior
periods (except as otherwise noted therein) and present fairly the statutory
assets, liabilities, capital and surplus, results of operations and cash flows
of GLIC as of the date thereof or for the period covered thereby. The GLIC
Annual Statement complied on its date of filing with the New York Insurance
Code (the "NYIC") and the rules and regulations of the New York Department
promulgated thereunder, except for any failure to comply which would not result
in a Material Adverse Effect.

(e) All reserves reflected in the GLIC Annual Statement (i) were
determined in accordance with commonly accepted actuarial standards consistently
applied, (ii) met in all material respects the requirements of the NYIC and the
rules and regulations of the New York Department promulgated thereunder and the
insurance laws and regulations of each other jurisdiction in which GLIC is
licensed to write life insurance and (iii) reflected the related reinsurance,
coinsurance and other similar agreements to which GLIC is a party. Except as
would not have a Material Adverse Effect, adequate provision for all such
reserve liabilities has been made (under commonly accepted actuarial standards
consistently applied and through reinsurance, coinsurance or other similar
agreements) to cover the total amount of all reasonably anticipated matured and
unmatured benefits, claims and other liabilities of GLIC under all insurance
policies under which GLIC has any liability (including, without limitation, any
liability arising out of or as a result of any reinsurance, coinsurance or other
similar agreement) on the date of the GLIC Annual Statement based on commonly
accepted actuarial assumptions as to future contingencies which are reasonable
and appropriate under the circumstances.

5.7 Absence of Certain Changes or Events. Except as disclosed in the
Company SEC Reports, as reflected on the 1994 Financial Statements, as set forth
on Schedule 5.7 or contemplated by this Agreement, since March 31, 1993, the
business of the Company has been car-

17
<PAGE> 23
ried on only in the ordinary and usual course and in a manner consistent with
past practice, and there has not been (i) any change in the business,
operations, properties, condition (financial or otherwise) or assets or
liabilities (including, without limitation, contingent liabilities) of the
Company or any of its subsidiaries having, individually or in the aggregate, a
Material Adverse Effect, (ii) any damage, destruction or loss (whether or not
covered by insurance) with respect to any property or asset of the Company or
any of its subsidiaries and having, individually or in the aggregate, a
Material Adverse Effect, (iii) any change by the Company in its accounting
methods, principles or practices, (iv) any revaluation by the Company of any
assets (including, without limitation, any writing down of the value of
inventory or writing off of notes or accounts receivable), other than in the
ordinary course of business consistent with past practice, (v) any declaration,
setting aside or payment of any dividend or distribution in respect of any
capital stock of the Company (other than the declaration and payment of regular
quarterly dividends of $.215 per Share in accordance with past dividend policy)
or any redemption, purchase or other acquisition of any of its securities or
(vi) any increase in or establishment of any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock option
(including, without limitation, the granting of stock options, stock
appreciation rights, performance awards, or restricted stock awards), stock
purchase or other employee benefit plan, or any other increase in the
compensation payable or to become payable to any officers or key employees of
the Company or any of its subsidiaries, except in the ordinary course of
business consistent with past practice.

5.8 Litigation. The Company SEC Reports or the 1994 Financial
Statements accurately disclose in all material respects as of the date of this
Agreement all actions, claims, suits, proceedings and governmental
investigations pending or, to the knowledge of the Company, threatened, which
(i) are required to be disclosed therein by the Securities Act and the Exchange
Act or (ii) individually or in the aggregate, are reasonably likely to have a
Material Adverse Effect.

5.9 Proxy Statement; Offer Documents. Any proxy, information
statement or similar materials dis-

18
<PAGE> 24
tributed to the Company's shareholders in connection with the Merger, including
any amendments or supplements thereto (the "Proxy Statement"), will comply in
all material respects with applicable federal securities laws, and will not, at
the date the Proxy Statement (or any amendment or supplement thereto) is first
mailed to shareholders of the Company, at the time of the Shareholders Meeting
or at the Effective Time, contain any untrue statement of a material fact, or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading or necessary to correct any statement in any
earlier communication with respect to the solicitation of proxies for the
Shareholders Meeting which shall have become false or misleading, except that
no representation is made by the Company with respect to information supplied
by Newco or Parent for inclusion in the Proxy Statement. None of the
information supplied by the Company in writing for inclusion in the Offer
Documents or contained in the Schedule 14D-9 will, at the respective times that
the Offer Documents and the Schedule 14D-9 or any amendments or supplements
thereto are filed with the SEC and are first published or sent or given to
holders of Shares, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading. The Schedule 14D-9 will comply in all material
respects with applicable federal securities laws.

5.10 Taxes. Since April 1, 1990, the Company and its subsidiaries
have filed when due all Federal, state, local and foreign income tax returns
that any of them is required to file ("Tax Returns") other than those Tax
Returns the failure of which to file would not have a Material Adverse Effect
and have paid all taxes shown on those returns. The Company has delivered or
made available to Parent true and complete copies of its Federal income tax
returns for each of the three years ended March 31, 1991 through 1993.

5.11 Employee Benefit Plans; Labor Matters. (a) With respect to
the employee benefit plans, programs and arrangements maintained or contributed
to by the Company or any of its United States subsidiaries (the

19
<PAGE> 25
"Company Plans"), except as set forth on Schedule 5.11, the Company SEC Reports
or the 1994 Financial Statements and except as would not individually or in the
aggregate have a Material Adverse Effect: (i) each Company Plan intended to be
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), has received a favorable determination letter from the Internal
Revenue Service (the "IRS") that it is so qualified and nothing has occurred
since the date of such letter that could reasonably be expected to affect the
qualified status of such Company Plan; (ii) each Company Plan has been operated
in all material respects in accordance with its terms and the requirements of
applicable law; (iii) neither the Company nor any of its United States
subsidiaries has incurred any direct or indirect liability under, arising out
of or by operation of Title IV of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), in connection with the termination of, or
withdrawal from, any Company Plan or other retirement plan or arrangement, and
no fact or event exists that could reasonably be expected to give rise to any
liability. Except as set forth on Schedule 5.11 or the Company SEC Reports, or
the 1994 Financial Statements the aggregate accumulated benefit obligations of
each Company Plan subject to Title IV of ERISA (as of the date of the most
recent actuarial valuation prepared for such Company Plan) do not exceed the
fair market value of the assets of such Company Plan (as of the date of such
valuation).

(b) With respect to each Company Plan subject to non-United States
law (a "Foreign Plan") and any government-sponsored employee benefit
arrangement to which the Company or any of its subsidiaries must contribute
under applicable non-United States law (a "Foreign Governmental Scheme"),
except as would not individually or in the aggregate have a Material Adverse
Effect, (i) any employer or employee contributions required by law or by the
terms of any Foreign Plan or Foreign Government Scheme have been made, or, if
applicable, accrued in accordance with normal accounting practices, (ii) the
fair market value of the assets of each funded Foreign Plan, or the liability
of each insurer for any Foreign Plan funded through insurance or the book
reserve established for any Foreign Plan, together with any accrued
contributions, is sufficient to procure or provide for the accrued benefit
obligations with respect to all

20
<PAGE> 26
current and former participants in such plan according to the actuarial
assumptions and valuations most recently used to determine employer
contributions to such Foreign Plan and no transaction contemplated by this
Agreement shall cause such assets, book reserves or insurance obligations to be
less than such benefit obligations, and (iii) each Foreign Plan required to be
registered has been registered and has been maintained in good standing with
applicable regulatory authorities.

(c) The Company has made available to Parent all collective bargaining
or other labor union contracts to which the Company or any of its Significant
Subsidiaries is a party applicable to persons employed by the Company or its
Significant Subsidiaries as of the date of this Agreement. As of the date of
this Agreement, there is no pending or threatened in writing labor dispute,
strike or work stoppage against the Company or any of its subsidiaries which may
interfere with the respective business activities of the Company or its
subsidiaries, except where such dispute, strike or work stoppage would not have
a Material Adverse Effect.

5.12 Environmental Laws and Regulations. Except as publicly disclosed
by the Company, (i) the Company and each of its subsidiaries is in compliance
with all applicable federal, state, local and foreign laws and regulations
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata) (collectively, "Environmental Laws"), except for
non-compliance that individually or in the aggregate would not have a Material
Adverse Effect and (ii) neither the Company nor any of its subsidiaries has
received written notice of, or, to the knowledge of the Company, is the subject
of, any action, cause of action, claim, investigation, demand or notice by any
person or entity alleging liability under or non-compliance with any
Environmental Law (an "Environmental Claim") which is reasonably likely to have
a Material Adverse Effect.

5.13 Tangible Property. The Company and its subsidiaries have
sufficient title to all their properties and assets to conduct their respective
businesses as currently conducted or as contemplated to be conducted,

21
<PAGE> 27
with only such exceptions as individually or in the aggregate would not have a
Material Adverse Effect.

5.14 Intangible Property. Except as set forth on Schedule 5.14, (i)
the Company or a subsidiary of the Company is the owner of all items of
intangible property, including, without limitation, trademarks and service marks
(whether or not registered), trade names, brand names, patents and copyrights,
which are material to the business of the Company as currently conducted, taken
as a whole, and (ii) the Company or a subsidiary of the Company is the owner of,
or a licensee under a valid license for, all other items of intangible property
which are used in the business of the Company and its subsidiaries as currently
conducted except where the failure to own or have a valid license to such other
intangible property would not have a Material Adverse Effect. Except as
disclosed on Schedule 5.14, there are no claims pending or, to the Company's
knowledge, threatened, that the Company or any subsidiary is in violation of any
such intangible property rights of any third party which is reasonably likely to
have a Material Adverse Effect.

5.15 Certain Agreements. Except as set forth on Schedule 5.15,
neither the Company nor any of its subsidiaries is a party to, or bound by, any
contract or agreement that materially limits the ability of the Company directly
or through any of its subsidiaries to compete in any line of business or with
any person or in any geographic area or during any period of time.

5.16 Brokers and Finders. Except for the fees and expenses payable
to Goldman, Sachs & Co. and Wasserstein Perella & Co., Inc., which fees and
expenses are reflected in their agreements with the Company, true and complete
copies of which have been furnished to Parent, the Company has not employed any
investment banker, broker, finder, consultant or intermediary in connection with
the transactions contemplated by this Agreement which would be entitled to any
investment banking, brokerage, finder's or similar fee or commission in
connection with this Agreement or the transactions contemplated hereby.

22
<PAGE> 28
5.17 Opinions of Financial Advisors. The Company has received the
opinions of Goldman, Sachs & Co. and Wasserstein Perella & Co., Inc., to the
effect that the consideration to be received by the shareholders of the Company
pursuant to the Offer and the Merger is fair to such shareholders from a
financial point of view, a copy of which opinions will be delivered to Parent
upon receipt.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF PARENT
AND NEWCO

Each of Parent and Newco represent and warrant jointly and severally to
the Company that:

6.1 Corporate Organization and Qualification. Each of Parent and
Newco is a corporation duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of incorporation.

6.2 Authority Relative to This Agreement. Each of Parent and Newco
has the requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. This
Agreement and the consummation by Parent and Newco of the transactions
contemplated hereby have been duly and validly authorized by the respective
Boards of Directors of Parent and Newco and by the shareholders of Newco, and no
other corporate proceedings on the part of Parent and Newco are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by each of
Parent and Newco and, assuming this Agreement constitutes the valid and binding
agreement of the Company, constitutes the valid and binding agreement of each of
Parent and Newco, enforceable against each of them in accordance with its terms,
except that the enforcement hereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity).

23
<PAGE> 29
6.3 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by Parent or Newco nor the consummation by Parent and
Newco of the transactions contemplated hereby will (a) conflict with or result
in any breach of any provision of the Articles of Incorporation or the By-Laws,
respectively, of Parent or Newco; (b) require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, except (i) in connection with the applicable
requirements of the HSR Act, (ii) pursuant to the applicable requirements of the
Exchange Act, (iii) the filing of the Certificate of Merger pursuant to the BCA
and DGCL and appropriate documents with the relevant authorities of other states
in which Parent is authorized to do business, (iv) as may be required by any
applicable state securities or "blue sky" laws or state takeover laws, (v) the
approval of the New York Department in connection with the indirect acquisition
by Parent of GLIC and such filings and consents which may be required under the
insurance laws of any state in which GLIC does business, and (vi) such filings,
consents, approvals, orders, registrations, declarations and filings as may be
required under the laws of any foreign country in which Parent or any of its
subsidiaries conducts any business or owns any assets; (c) result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, cancellation or
acceleration or lien or other charge or encumbrance) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, lease, permit,
franchise, license, agreement or other instrument or obligation to which Parent
or Newco may be bound, except for such violations, breaches and defaults (or
rights of termination, cancellation or acceleration or lien or other charge or
encumbrance) as to which requisite waivers or consents have been obtained or
which, in the aggregate, would not prevent or materially delay the consummation
of the transactions contemplated by this Agreement; or (d) assuming the
consents, approvals, authorizations or permits and filings or notifications
referred to in this Section 6.3 are duly and timely obtained or made, violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
Parent or Newco or to any of their respective assets, except for violations
which would not prevent or materi-

24
<PAGE> 30
ally delay the consummation of the transactions contemplated by this Agreement.

6.4 Annual Report; Financial Statements. Parent has delivered to the
Company true and complete copies of Parent's 1993 Annual Report. The
consolidated balance sheet and the related consolidated statement of income
(including the related notes thereto) of Parent included in Parent's 1993 Annual
Report have been prepared in accordance with the accounting standards described
therein.

6.5 Proxy Statement; Schedule 14D-9. None of the information supplied
by Parent or Newco in writing for inclusion in the Proxy Statement or the
Schedule 14D-9 will, at the respective times that the Proxy Statement and the
Schedule 14D-9 or any amendments or supplements thereto are filed with the SEC
and are first published or sent or given to holders of Shares, and in the case
of the Proxy Statement, at the time that it or any amendment or supplement
thereto is mailed to the Company's shareholders, at the time of the
Shareholders' Meeting or at the Effective Time, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.

6.6 Financing. Either Parent or Newco has sufficient funds available
to purchase all of the Shares outstanding on a fully diluted basis and to pay
all fees and expenses related to the transactions contemplated by this
Agreement.

6.7 Interim Operations of Newco. Newco was formed solely for the
purpose of engaging in the transactions contemplated hereby and has not engaged
in any business activities or conducted any operations other than in connection
with the transactions contemplated hereby.

6.8 Brokers and Finders. Except for the fees and expenses payable to
Morgan Stanley & Co. Incorporated, which fees and expenses are reflected in its
agreement with Parent, a true and correct copy of which has been furnished to
the Company, Parent has not employed any investment banker, broker, finder,
consultant or

25
<PAGE> 31
intermediary in connection with the transactions contemplated by this Agreement
which would be entitled to any investment banking, brokerage, finder's or
similar fee or commission in connection with this Agreement or the transactions
contemplated hereby.

ARTICLE VII

ADDITIONAL COVENANTS AND AGREEMENTS

7.1 Conduct of Business of the Company.

(a) Except as set forth on Schedule 7.1(a), the Company agrees that
during the period from the date of this Agreement to the Effective Time (unless
Parent shall otherwise agree in writing and except as otherwise contemplated by
this Agreement), the Company will, and will cause each of its subsidiaries to,
conduct its operations according to its ordinary and usual course of business
consistent with past practice and, to the extent consistent therewith, with no
less diligence and effort than would be applied in the absence of this
Agreement, seek to preserve intact its current business organizations, keep
available the service of its current officers and employees and preserve its
relationships with customers, suppliers and others having business dealings with
it to the end that goodwill and ongoing businesses shall not be impaired in any
material respect at the Effective Time. Without limiting the generality of the
foregoing, and except as otherwise permitted in this Agreement prior to the
Effective Time or as set forth in Schedule 7.1, neither the Company nor any of
its subsidiaries will, without the prior written consent of Parent:

(i) except for a maximum of 1,705,537 Shares (together with
associated Rights) to be issued pursuant to the terms of the Company's
Stock Ownership Program (or its predecessor plans), the Gerber Company
Retirement Investment Plan or the Company's Employee Stock Ownership
Plan, issue, sell, grant, dispose of, pledge or otherwise encumber, or
authorize or propose the issuance, sale, disposition or pledge or other
encumbrance of (A) any additional shares of capital stock of any

26
<PAGE> 32
class (including the Shares), or any securities or rights
convertible into, exchangeable for, or evidencing the right to
subscribe for any shares of capital stock, or any rights, warrants,
options (including the grant of any options under the current Stock
Plans), calls, commitments or any other agreements of any character to
purchase or acquire any shares of capital stock or any securities or
rights convertible into, exchangeable for, or evidencing the right to
subscribe for, any shares of capital stock, or any other ownership
interest (including, without limitation, any phantom interest), or (B)
any other securities in respect of, in lieu of, or in substitution for,
Shares outstanding on the date hereof;

(ii) except as required pursuant to the terms of the
Company's stock-based employee benefit plans, redeem, purchase or
otherwise acquire, or propose to redeem, purchase or otherwise acquire,
any of its outstanding Shares;

(iii) split, combine, subdivide or reclassify any Shares or
declare, set aside for payment or pay any dividend, or make any other
actual, constructive or deemed distribution, whether in cash, stock,
property or otherwise, in respect of any Shares or otherwise make any
payments to shareholders in their capacity as such, other than the
declaration and payment of regular quarterly cash dividends not to
exceed $.215 per Share in accordance with past dividend policy and
except for dividends by a wholly owned subsidiary of the Company;

(iv) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of the Company or any of its subsidiaries not
constituting an inactive subsidiary (other than the Merger);

(v) adopt any amendments to its Restated Articles of
Incorporation or By-Laws

27
<PAGE> 33
or alter through merger, liquidation, reorganization,
restructuring or in any other fashion the corporate structure or
ownership of any subsidiary not constituting an inactive subsidiary of
the Company;

(vi) make any material acquisition, by means of merger,
consolidation or otherwise, or material disposition, of assets or
securities;

(vii) incur any indebtedness for borrowed money or guarantee
any such indebtedness or make any loans, advances or capital
contributions to, or investments in, any other person, other than to
the Company or any wholly owned subsidiary of the Company, except for
the incurrence of (A) short term indebtedness in the ordinary course of
business consistent with past practice or (B) up to $10,000,000 of
indebtedness related to the construction of the Company's new plant in
Costa Rica;

(viii) grant any increases in the compensation of any of its
directors, officers or key employees, except in the ordinary course of
business and in accordance with past practice or as may be approved on
a case by case basis by a designated representative of the Parent;

(ix) pay or agree to pay any pension, retirement allowance,
severance or other employee benefit not required or contemplated by any
of the existing benefit, severance, termination, pension or employment
plans, agreements or arrangements as in effect on the date hereof to
any such director or officer, whether past or present;

(x) enter into any new or amend any existing employment or
severance or termination agreement with any such director or officer;

(xi) except in the ordinary course of business consistent
with past prac-

28
<PAGE> 34
tice or as may be required to comply with applicable law, become
obligated under any new pension plan, welfare plan, multiemployer plan,
employee benefit plan, severance plan, benefit arrangement, or similar
plan or arrangement, which was not in existence on the date hereof, or
amend any such plan or arrangement in existence on the date hereof if
such amendment would have the effect of materially enhancing any
benefits thereunder;

(xii) make any capital expenditures or commitments for any
capital expenditures, other than capital expenditures or commitments
for any capital expenditures in amounts consistent with the Company's
fiscal 1995 budget previously disclosed to Parent;

(xiii) make any material changes in its customary methods of
marketing, distributing or licensing;

(xiv) take, or agree to commit to take, any action that would
make any representation or warranty of the Company contained herein
inaccurate in any respect at, or as of any time prior to, the Effective
Time; or

(xv) authorize, recommend, propose or announce an intention
to do any of the foregoing, or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing.

7.2 Acquisition Proposals. The Company and its subsidiaries and
their respective officers, directors and employees will immediately cease any
existing discussions or negotiations with any parties conducted heretofore with
respect to any Acquisition Proposal (as hereinafter defined in Section 10.10).
The Company may, directly or indirectly, furnish information and access, in each
case only in response to requests which were not solicited by the Company after
the date of this Agreement, to any corporation, partnership, person or other
entity or group pursuant to confidentiality agreements, and may participate in
discussions and negotiate with such entity or group concerning any merger, sale
of

29
<PAGE> 35
assets, sale of shares of capital stock or similar transaction involving the
Company or any subsidiary or division of the Company, if such entity or group
has submitted a bona fide written proposal to the Board of Directors relating
to any such transaction which the Board reasonably determines represents a
superior transaction to the Offer and the Merger, and if, in the opinion of the
Board of Directors after consultation with independent legal counsel, the
failure to provide such information or access or to engage in such discussions
or negotiations would be inconsistent with their fiduciary duties to the
Company's shareholders under applicable law. The Company shall notify Parent
immediately if any such request or proposal, or any inquiry or contact with any
person with respect thereto, is made and shall keep Parent apprised of all
developments which could reasonably be expected to culminate in the Board
withdrawing, modifying or amending its recommendation of the Offer, the Merger
and the other transactions contemplated by this Agreement. The Company agrees
not to release any third party from, or waive any provision of, any
confidentiality or standstill agreement to which the Company is a party unless,
in the opinion of the Board of Directors after consultation with independent
legal counsel, the failure to provide such release or waiver would be
inconsistent with their fiduciary duties to the Company's shareholders under
applicable law.

7.3 All Reasonable Efforts.

(a) Subject to the terms and conditions herein provided, each of the
parties hereto shall use all reasonable efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement, including using all reasonable
efforts to obtain all necessary or appropriate waivers, consents and approvals,
and to effect all necessary registrations, filings and submissions (including,
but not limited to, (i) filings under the HSR Act and any other submissions
requested by the Federal Trade Commission or Department of Justice, (ii) filings
and consents required under the NYIC and any filings or consents which may be
required under the insurance laws of any state in which GLIC does business and
(iii) such filings, consents, approvals, orders registrations and declarations

30
<PAGE> 36
as may be required under the laws of any foreign country in which the Company
or any of its subsidiaries conducts any business or owns any assets) and to
lift any injunction or other legal bar to the Merger (and, in such case, to
proceed with the Merger as expeditiously as possible), subject, however, to the
requisite votes of the shareholders of any or all of the Company, Newco and
Parent.

(b) Notwithstanding the foregoing, the Company shall not be obligated
to use all reasonable efforts or take any action pursuant to this Section 7.3
if, in the opinion of the Board of Directors after consultation with independent
legal counsel, such actions would be inconsistent with their fiduciary duties to
the Company's shareholders under applicable law.

7.4 Access to Information.

(a) Upon reasonable notice, the Company shall (and shall cause each
of its subsidiaries to) afford to officers, directors, employees, counsel,
accountants and other authorized representatives of Parent ("Representatives"),
in order to evaluate the transactions contemplated by this Agreement, reasonable
access, during normal business hours throughout the period prior to the
Effective Time, to its properties, officers, directors, employees, counsel,
accountants and other representatives, books and records and, during such
period, shall (and shall cause each of its subsidiaries to) furnish promptly to
such Representatives all information concerning its business, properties and
personnel and all financial operating and other data as may reasonably be
requested. Parent agrees that it will not, and will cause its Representatives
not to, use any information obtained pursuant to this Section 7.4 for any
purpose unrelated to the consummation of the transactions contemplated by this
Agreement.

(b) The Confidentiality Agreement previously entered into between the
Company and Parent (the "Confidentiality Agreement") shall apply with respect to
information furnished by the Company, its subsidiaries and the Company's
officers, directors, employees, counsel, accountants and other authorized
representatives hereunder.

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<PAGE> 37
(c) No investigation pursuant to this Section 7.4 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.

7.5 Publicity. The parties will consult with each other and will
mutually agree upon any press releases or public announcements pertaining to the
Offer or the Merger and shall not issue any such press releases or make any such
public announcements prior to such consultation and agreement, except as may be
required by applicable law or by obligations pursuant to any listing agreement
with any national securities exchange, in which case the party proposing to
issue such press release or make such public announcement shall use all
reasonable efforts to consult in good faith with the other party before issuing
any such press releases or making any such public announcements.

7.6 Indemnification of Directors and Officers.

(a) The Articles of Incorporation and By-Laws of the Surviving
Corporation shall contain provisions with respect to indemnification no less
favorable to any party indemnified thereunder than those set forth in the
Restated Articles of Incorporation and By-Laws of the Company on the date of
this Agreement, which provisions shall not be amended, repealed or otherwise
modified for a period of six years after the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who at any time
prior to the Effective Time were directors or officers of the Company in respect
of actions or omissions occurring at or prior to the Effective Time (including,
without limitation, the transactions contemplated by this Agreement), unless
such modification is required by law; provided, that in the event any claim or
claims are asserted or made within such six year period, all rights to
indemnification in respect of any such claim or claims shall continue until
disposition of any and all such claims.

(b) Parent shall cause to be maintained in effect for the Indemnified
Parties (as defined below) for not less than three years the current policies of
directors' and officers' liability insurance maintained by the Company and the
Company's subsidiaries with respect to matters occurring at or prior to the
Effective

32
<PAGE> 38
Time (including, without limitation, the transactions contemplated by this
Agreement); provided, that Parent may substitute therefor policies of
substantially the same coverage containing terms and conditions which are no
less advantageous, in any material respect, to the Company's present or former
directors, officers, employees, agents or other individuals otherwise covered
by such insurance policies prior to the Effective Time (the "Indemnified
Parties"); provided, however, that in no event shall the Surviving Corporation
be required to expend pursuant to this Section 7.6(b) more than an amount per
year equal to 200% of current annual premiums paid by the Company for such
insurance (which premiums the Company represents and warrants to be $251,800 in
the aggregate). In the event that, but for the proviso to the immediately
preceding sentence, the Surviving Corporation would be required to expend more
than 200% of current annual premiums, pursuant to this Section 7.6(b), the
Surviving Corporation shall nonetheless purchase the maximum amount of such
insurance obtainable by payment of annual premiums equal to 200% of current
annual premiums.

(c) In the event the Company or the Surviving Corporation or any of
their respective successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving corporation or entity
of such consolidation or merger or (ii) transfers all or substantially all of
its properties and assets to any person, then, and in each such case, proper
provision shall be made so that the successors and assigns of the Company or the
Surviving Corporation, as the case may be, or at Parent's option, Parent, shall
assume the obligations set forth in this Section 7.6.

7.7 Filings under the NYIC. Parent shall promptly file a Form A with
the New York Department pursuant to the NYIC and shall use all reasonable
efforts to obtain approval for the Merger from the New York Department and the
Company shall use all reasonable efforts to cooperate with Parent in preparing
such filing and obtaining such approval.

7.8 Employees.

(a) For a period of at least two years after the Effective Time,
Parent shall cause the Surviving Corporation to continue to maintain the
Company's

33
<PAGE> 39
existing compensation, severance, welfare and pension benefit plans, programs
and arrangements (other than any stock based plans, programs and arrangements
for which alternative incentive compensation plans will be put into effect
pursuant to paragraph (b) below) for the benefit of current and former
employees of the Company and its subsidiaries (subject to such modification as
may be required by applicable law or to maintain the tax exempt status of any
such plan which is intended to be qualified under Section 401(a) of the
Internal Revenue Code), provided that (i) nothing herein shall prohibit Parent
from replacing any such existing plan or plans, program(s) or arrangement(s)
with a plan or plans, program(s) or arrangement(s) which provide such employees
with benefits which are not less favorable in the aggregate than the benefits
that would have been provided under the Company's existing plan(s), program(s)
or arrangement(s) to the extent such replacement is permitted under the terms
of the applicable plan, program or arrangement and (ii) nothing herein shall
obligate Parent to provide such employees with any stock based compensation
(including, without limitation, stock options or stock appreciation rights)
after the Effective Time.

(b) In the light of Parent's desire that the Surviving Corporation
provide appropriate employee incentives in the future, Parent agrees to develop
during the one-year period following the Effective Time a new performance based
incentive compensation plan for the benefit of employees of the Surviving
Corporation and its subsidiaries as an appropriate substitute for the Company's
current stock based plans, programs and arrangements.

(c) All service credited to each employee by the Company through the
Effective Time shall be recognized by Parent for all purposes, including for
purposes of eligibility, vesting and benefit accruals under any employee benefit
plan provided by Parent for the benefit of the employees; provided, however,
that, to the extent necessary to avoid duplication of benefits, amounts payable
under employee benefit plans provided by Parent may be reduced by amounts
payable under similar Company Plans with respect to the same periods of service.

(d) Individual Agreements. Parent hereby agrees to cause the
Surviving Corporation to honor (with-

34
<PAGE> 40
out modification) and assume the employment agreements, executive termination
agreements and individual benefit arrangements listed on Schedule 7.8(d), all
as in effect at the date hereof.

7.9 Company Board Representation; Section 14(f).

(a) Promptly upon the purchase by Newco of Shares pursuant to the
Offer, and from time to time thereafter, and subject to the last sentence of
Section 7.9(c), Newco shall be entitled to designate up to such number of
directors, rounded up to the next whole number, on the Board of Directors of
the Company as shall give Newco representation on the Board of Directors of
the Company equal to the product of the total number of directors on the Board
of Directors of the Company (giving effect to the directors elected pursuant to
this sentence) multiplied by the percentage that the aggregate number of Shares
beneficially owned by Newco or any affiliate of Newco following such purchase
bears to the total number of Shares then outstanding, and the Company shall,
at such time, promptly use all reasonable efforts to cause Newco's designees to
be elected as directors of the Company, including increasing the size of the
Board of Directors of the Company (subject to the provisions of Article VI of
the Company's Restated Articles of Incorporation) or securing (to the extent
possible) the resignations of incumbent directors or both. At such times, the
Company shall use all reasonable efforts to cause persons designated by Newco to
constitute the same percentage as persons designated by Newco shall constitute
of the Board of Directors of the Company of (i) each committee of the Board of
Directors of the Company, (ii) each board of directors of each domestic
subsidiary and (iii) each committee of each such board, in each case only to the
extent permitted by applicable law or the rules of any stock exchange on which
the Shares are listed. Notwithstanding the foregoing, until the earlier of (i)
the time Newco acquires a majority of the then outstanding Shares on a fully
diluted basis and (ii) the Effective Time, the Company shall use all reasonable
efforts to ensure that all the members of the Board of Directors of the Company
and each committee of the Board of Directors of the Company and such boards and
committees of the domestic subsidiaries as of the date hereof who are not
employees of the Company shall remain members of the Board of

35
<PAGE> 41
Directors of the Company and of such boards and committees.

(b) The Company's obligation to appoint designees to the Board of
Directors of the Company shall be subject to Section 14(f) of the Exchange Act
and Rule 14f-1 promulgated thereunder. The Company shall promptly take all
actions required pursuant to such Section and Rule in order to fulfill its
obligations under this Section 7.9 and shall include in the Schedule 14D-9 such
information with respect to the Company and its officers and directors as is
required under Section 14(f) and Rule 14f-1 to fulfill such obligations. Parent
or Newco shall supply to the Company and be solely responsible for any
information with respect to either of them and their nominees, officers,
directors and affiliates required by such Section 14(f) and Rule 14f-1.

(c) Following the election of designees of Newco pursuant to this
Section 7.9, prior to the Effective Time, any amendment of this Agreement or the
Articles of Incorporation or By-laws of the Company, any termination of this
Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Parent or Newco or waiver
of any of the Company's rights hereunder shall require the concurrence of a
majority of the directors of the Company then in office who are directors as of
the date hereof or persons designated by such directors and neither were
designated by Newco nor are employees of the Company ("Continuing Directors").
Prior to the Effective Time, the Company and Newco shall use all reasonable
efforts to ensure that the Company's Board of Directors at all times includes at
least three Continuing Directors.

7.10 Notification of Certain Matters. The Company shall give prompt
written notice to Parent, and Parent shall give prompt written notice to the
Company, of (i) the occurrence, or non-occurrence, of any event the occurrence,
or non-occurrence, of which would cause any representation or warranty contained
in this Agreement to be untrue or inaccurate and (ii) any failure by the
Company, Parent or Newco, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursu-

36
<PAGE> 42
ant to this Section 7.10 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.

ARTICLE VIII

CONDITIONS TO CONSUMMATION OF THE MERGER

8.1 Conditions to Each Party's Obligations to Effect the Merger. The
respective obligations of each party to effect the Merger are subject to the
satisfaction at or prior to the Effective Time of the following conditions:

(a) Shareholder Approval. If required for the consummation of the
Merger, this Agreement and the transactions contemplated hereby shall have been
duly approved by the shareholders of the Company in accordance with applicable
law and the Restated Articles of Incorporation of the Company; provided that
Parent and Newco shall vote all of their Shares in favor of the Merger.

(b) Injunction. There shall not be in effect any statute, rule,
regulation, executive order, decree, ruling or injunction or other order of a
court or governmental or regulatory agency of competent jurisdiction directing
that the transactions contemplated herein not be consummated or which has the
effect of making the acquisition of shares by Newco illegal; provided, however,
that prior to invoking this condition each party shall use all reasonable
efforts to have any such decree, ruling, injunction or order vacated.

(c) Governmental Filings and Consents. All governmental consents,
orders and approvals legally required for the consummation of the Merger and the
transactions contemplated hereby shall have been obtained and be in effect at
the Effective Time (including, but not limited to, the approval of the New York
Department and any approvals which may be required under the insurance laws of
any state in which GLIC does business and such approvals and consents as may be
required under the laws of any foreign country in which the Company or any of
its subsidiaries conducts any business or owns any assets), except where the
failure to obtain any such consent would not reasonably be expected to have a
Material

37
<PAGE> 43
Adverse Effect on Parent (assuming the Merger had taken place), and the waiting
periods under the HSR Act shall have expired or been terminated.

(d) The Offer. Newco shall have purchased Shares pursuant to the
Offer.

ARTICLE IX

TERMINATION; AMENDMENT; WAIVER

9.1 Termination by Mutual Consent. This Agreement may be terminated
and the Offer and the Merger may be abandoned at any time prior to the Effective
Time, by the mutual written consent of Parent and the Company.

9.2 Termination by Either Parent or the Company. This Agreement may
be terminated and the Offer and the Merger may be abandoned by Parent or the
Company if (i) any court of competent jurisdiction in the United States or some
other governmental body or regulatory authority shall have issued an order,
decree or ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting the Merger and such order, decree, ruling or other action
shall have become final and nonappealable or (ii) Newco shall not have purchased
Shares pursuant to the Offer on or prior to November 30, 1994; provided, that
the right to terminate this Agreement pursuant to this Section 9.2 shall not be
available to any party whose failure to fulfill any of its obligations under
this Agreement results in such failure to purchase.

9.3 Termination by Parent. This Agreement may be terminated by
Parent prior to the purchase of Shares pursuant to the Offer by Newco, if (i)
the Company shall have failed to perform in any material respect any of its
material obligations under this Agreement to be performed at or prior to such
date of termination, which failure to perform is incapable of being cured by
November 30, 1994; (ii) any representation or warranty of the Company contained
in this Agreement shall not be true and correct (except for changes permitted by
this Agreement and those representations which address matters only as of a
particular date shall remain true and correct as of such date), except, in any
case, such failures to be true and

38
<PAGE> 44
correct which are not reasonably likely to have Material Adverse Effect on the
Company; provided, that such failure to be true and correct is incapable of
being cured prior to November 30, 1994; or (iii) an Acquisition Proposal for
the Company exists and the Board of Directors of the Company withdraws or
materially modifies or changes (including by amendment of the Schedule 14D-9)
its recommendation of the Offer, this Agreement or the Merger in a manner
adverse to Parent or Newco; provided, that a statement by the Board of
Directors of the Company that it is neutral or unable to take a position with
respect to the Offer, this Agreement or the Merger shall not be deemed to
constitute a withdrawal, modification or change of its recommendation of the
Offer, this Agreement or the Merger; or (iv) the Board of Directors of the
Company recommends to the shareholders of the Company an Acquisition Proposal
for the Company.

9.4 Termination by the Company. This Agreement may be terminated by
the Company and the Offer and the Merger may be abandoned at any time prior to
the Effective Time if (i) Newco shall have (x) failed to commence the Offer
within five days following the date of the initial public announcement of the
Offer or (y) terminated the Offer prior to the purchase of the Shares pursuant
to the Offer; (ii) Newco or Parent shall have failed to perform in any material
respect any of their material obligations under this Agreement to be performed
at or prior to such date of termination, which failure to perform is incapable
of being cured by November 30, 1994; (iii) any representation or warranty of
Newco or Parent contained in this Agreement shall not be true and correct
(except for changes permitted by this Agreement and those representations which
address matters only as of a particular date shall remain true and correct as of
such date), except, in any case, such failures to be true and correct which are
not reasonably likely to adversely effect Parent's or Newco's ability to
complete the Offer or the Merger; provided, that such failure to be true and
correct is incapable of being cured prior to November 30, 1994; or (iv) the
Board of Directors of the Company withdraws or materially modifies or changes
its recommendation of the Offer, this Agreement or the Merger in order to
approve the execution by the Company of a definitive agreement relating to an
Acquisition Proposal for the Company and the Board of Directors of the Company
after consultation with independent legal counsel determines

39
<PAGE> 45
that the failure to take such action would be inconsistent with its fiduciary
duties to the Company's shareholders under applicable law.

9.5 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Article IX, this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party hereto or its affiliates, directors, officers or shareholders, other
than the provisions of this Section 9.5 and the provisions of Sections 10.1 and
10.2, the last sentence of Section 7.4(a) and Section 7.4(b). Nothing contained
in this Section 9.5 shall relieve any party from liability for any breach of
this Agreement.

9.6 Extension; Waiver. At any time prior the Effective Time, each of
Parent, Newco and the Company may (i) extend the time for the performance of any
of the obligations or other acts of the other party, (ii) waive any inaccuracies
in the representations and warranties of the other party contained herein or in
any document, certificate or writing delivered pursuant hereto or (iii) waive
compliance by the other party with any of the agreements or conditions contained
herein. Any agreement on the part of either party hereto to any such extension
or waiver shall be valid only if set forth in any instrument in writing signed
on behalf of such party. The failure of either party hereto to assert any of
its rights hereunder shall not constitute a waiver of such rights.

ARTICLE X

MISCELLANEOUS AND GENERAL

10.1 Payment of Expenses and Other Payments.

(a) Whether or not the Offer and the Merger shall be consummated,
each party hereto shall pay its own expenses incident to preparing for,
entering into and carrying out this Agreement and the consummation of the
transactions contemplated hereby, provided that the Surviving Corporation
shall pay, with funds of the Company and not with funds provided by Parent,
any and all

40
<PAGE> 46
property or transfer taxes imposed on the Surviving Corporation or any Gains
Taxes.

(b) The Company agrees that if this Agreement is terminated
pursuant to (i) Section 9.2(ii) and at the time of such termination (x) the
Minimum Condition had not been satisfied and (y) an Acquisition Proposal
existed; (ii) Section 9.3(iii); (iii) Section 9.3(iv); or (iv) Section 9.4(iv),
the Company shall pay to Parent an amount equal to $70 million. Such payment
shall be made as promptly as practicable but in no event later than the third
business day following termination of this Agreement and shall be made by wire
transfer of immediately available funds to an account designated by Parent.

(c) The Company agrees that if this Agreement is terminated pursuant
to Section 9.3(i) or Section 9.3(ii), the Company shall reimburse Parent and
Newco for up to $15 million, in the aggregate, of their actual out of pocket
expenses incurred in connection with the Agreement and the Offer (including,
without limitation, legal fees, financial advisor fees, financing commitment
fees and printer fees). Such payments shall be made as promptly as practicable
but in no event later than the third business day following the Company's
receipt of documentation evidencing such expenses, by wire transfer of
immediately available funds to an account designated by Parent.

10.2 Survival of Representations and Warranties; Survival of
Confidentiality. The representations and warranties made herein shall not
survive beyond the earlier of (i) termination of this Agreement or (ii) the
Effective Time. This Section 10.2 shall not limit any covenant or agreement of
the parties hereto which by its terms contemplates performance after the
Effective Time. The Confidentiality Agreement shall survive any termination of
this Agreement, and the provisions of such Confidentiality Agreement shall apply
to all information and material delivered by any party hereunder.

10.3 Modification or Amendment. Subject to the applicable provisions
of the BCA and the DGCL, at any time prior to the Effective Time, the parties
hereto may modify or amend this Agreement, by written agreement executed and
delivered by duly authorized officers of the

41
<PAGE> 47
respective parties; provided, however, that after approval of this Agreement by
the shareholders of the Company, no amendment shall be made which changes the
consideration payable in the Merger or adversely affects the rights of the
Company's shareholders hereunder without the approval of such shareholders.

10.4 Waiver of Conditions. The conditions to each of the parties'
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable law.

10.5 Counterparts. For the convenience of the parties hereto, this
Agreement may be executed in any number of counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts shall
together constitute the same agreement.

10.6 Governing Law. Except to the extent the BCA and the DGCL are
mandatorily applicable to the rights of the stockholders of the Company and
Newco, respectively, this Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to contracts
executed in and to be performed within that state.

10.7 Notices. Any notice, request, instruction or other document to
be given hereunder by any party to the other parties shall be in writing and
delivered personally or sent by registered or certified mail, postage prepaid,
or by facsimile transmission (with a confirming copy sent by overnight courier),
as follows:

(a) If to the Company, to

Gerber Products Company
445 State Street
Fremont, Michigan 49413
(616) 928-2000
(616) 928-2963 (telecopier)

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with a copy to:

Charles W. Mulaney, Esq.
Skadden, Arps, Slate, Meagher
& Flom
333 West Wacker Drive
Chicago, Illinois 60606
(312) 407-0700 (telephone)
(312) 407-0411 (telecopier)

(b) If to Parent or Newco, to

Sandoz Corporation
608 Fifth Avenue
New York, New York 10020
(212) 307-1122 (telephone)
(212) 246-0185 (telecopier)

with a copy to:
David W. Heleniak, Esq.
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
(212) 848-4000 (telephone)
(212) 848-7179 (telecopier)

or to such other persons or addresses as may be designated in writing by the
party to receive such notice.

10.8 Entire Agreement; Assignment. This Agreement and the
Confidentiality Agreement (a) constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all other prior
agreements and understandings, both written and oral, among the parties or any
of them with respect to the subject matter hereof, and (b) shall not be assigned
by operation of law or otherwise, except that Parent and Newco may assign all or
any of their rights and obligations hereunder to any direct or indirect wholly
owned subsidiary of Parent provided that no such assignment shall relieve the
assigning party of its obligations hereunder.

10.9 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and their respective successors
and

43
<PAGE> 49
assigns. Nothing in this Agreement, express or implied, other than the right
to receive the consideration payable in the Merger pursuant to Article IV
hereof is intended to or shall confer upon any other person any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement; provided, however, that the provisions of Section 7.6 shall inure to
the benefit of and be enforceable by the Indemnified Parties.

10.10 Certain Definitions. As used herein:

(a) "Significant Subsidiary" shall have the meaning ascribed to it
under Rule 1-02 of Regulation S-X of the SEC.

(b) "subsidiary" shall mean, when used with reference to any entity,
any corporation a majority of the outstanding voting securities of which are
owned directly or indirectly by such entity and Gerber de Venezuela.

(c) "Material Adverse Effect" shall mean any adverse change in the
financial condition, business or results of operations of the Company or any of
its subsidiaries or Parent or any of its subsidiaries, as the case may be, which
is material to the Company and its subsidiaries, taken as a whole, or Parent and
its subsidiaries, taken as a whole, as the case may be, other than any change or
effect arising out of general economic conditions unrelated to any business in
which the Company or Parent is engaged.

(d) "Acquisition Proposal" means any proposal or offer for a merger,
asset acquisition or other business combination involving a person or any
proposal or offer to acquire a significant equity interest in, or a significant
portion of the assets of, such person other than the transactions contemplated
by this Agreement.

10.11 Obligation of Parent. Whenever this Agreement requires Newco
to take any action, such requirement shall be deemed to include an undertaking
on the part of Parent to cause Newco to take such action and a guarantee of the
performance thereof.

44
<PAGE> 50
10.12 Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, each of which shall remain in full force and
effect.

10.13 Captions. The Article, Section and paragraph captions herein
are for convenience of reference only, do not constitute part of this Agreement
and shall not be deemed to limit or otherwise affect any of the provisions
hereof.

10.14 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with its terms and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.

45
<PAGE> 51
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date first above
written.

Attest: GERBER PRODUCTS COMPANY

________________________ By: /s/ Alfred Piergallini
Name: Alfred Piergallini
Title: Chairman, CEO and
President

Attest: SANDOZ LTD.

________________________ By: /s/ Dr. Marc Moret
Name: Dr. Marc Moret
Title: Chairman of the
Board

By: /s/ Dr. Rolf Schweizer
Name: Dr. Rolf Schweizer
Title: Chief Executive
Officer

Attest: SL SUB CORP.

________________________ By: /s/ Heinz Imhof
Name: Heinz Imhof
Title: President

<PAGE> 52
ANNEX A

THE CAPITALIZED TERMS USED HEREIN HAVE THE
MEANINGS SET FORTH IN THE AGREEMENT AND
PLAN OF MERGER TO WHICH THIS
ANNEX A IS ATTACHED

Notwithstanding any other provisions of the Offer, Newco shall not be
required to accept for payment or pay for any Shares, and may terminate or amend
the Offer and may postpone the acceptance for payment of any Shares tendered if
(i) immediately prior to the expiration of the Offer the Minimum Condition shall
not have been satisfied, (ii) any applicable waiting period under the HSR Act
shall not have expired or been terminated prior to the expiration of the Offer
or (iii) subject to Newco's obligations set forth in Sections 1.1 and 7.7 of the
Agreement, the indirect acquisition of GLIC by the Parent shall not have been
approved by the New York Department or (iv) at any time on or after the date of
this Agreement and prior to the acceptance for payment of Shares, any of the
following conditions exist:

(a) Any government entity or federal or state court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, executive order, decree, injunction or other order
which is in effect and which (i) materially restricts, prevents or prohibits
consummation of the Offer, the Merger or any transaction contemplated by the
Agreement, (ii) prohibits or limits materially the ownership or operation by the
Company, Parent or any of their subsidiaries of all or any material portion of
the business or assets of the Company and its subsidiaries taken as a whole, or
compels the Company, Parent or any of their subsidiaries to dispose of or hold
separate all or any material portion of the business or assets of the Company
and its subsidiaries taken as a whole, (iii) imposes limitations on the ability
of Parent, Newco or any other subsidiary of Parent to exercise effectively full
rights of ownership of any Shares, including, without limitation, the right to
vote any Shares acquired by Newco pursuant to the Offer or otherwise on all
matters properly presented to the Company's shareholders, including, without
limitation, the approval and adoption of this Agreement and the

A-1
<PAGE> 53
transactions contemplated hereby or (iv) requires divestiture by Parent, Newco
or any other affiliate of Parent of any Shares; provided that Parent shall have
used all reasonable efforts to cause any such decree, judgment, injunction or
other order to be vacated or lifted;

(b) The representations and warranties of the Company (without giving
effect to any materiality qualifications) contained in the Agreement shall not
be true and correct as of the date of consummation of the Offer as though made
on and as of such date except (i) for changes specifically permitted by the
Agreement, (ii) that those representations and warranties which address matters
only as of a particular date shall remain true and correct as of such date) and
(iii) in any case where such failure to be true and correct which would not, in
the aggregate, have a Material Adverse Effect;

(c) The Company shall not have performed or complied in all material
respects with its material obligations under the Agreement to be performed or
complied with by it;

(d) The Merger Agreement shall have been terminated in accordance
with its terms;

(e) Prior to the purchase of Shares pursuant to the Offer, an
Acquisition Proposal for the Company exists and the Board of Directors of the
Company shall have withdrawn or materially modified or changed (including by
amendment of the Schedule 14D-9) in a manner adverse to Newco its recommendation
of the Offer, this Agreement or the Merger; provided, that a statement by the
Board of Directors of the Company that it is neutral or unable to take a
position with respect to the Offer shall not be deemed to constitute a
withdrawal, modification or change of its recommendation of the Offer, this
Agreement or the Merger; or

(f) (i) it shall have been publicly disclosed or Newco shall have
otherwise learned that any person or "group" (as defined in Section 13(d)(3) of
the Exchange Act), other than Parent or its affiliates or any group of which any
of them is a member, shall have acquired beneficial ownership (determined
pursuant to Rule 13d-3 promulgated under the Exchange Act) of more than 25% of
any class or series of capital stock of the Company

A-2
<PAGE> 54
(including the Shares), through the acquisition of stock, the formation of a
group or otherwise, or shall have been granted an option, right or warrant,
conditional or otherwise, to acquire beneficial ownership of more than 25% of
any class or series of capital stock of the Company (including the Shares); or
(ii) any person or group shall have entered into a definitive agreement or
agreement in principle with the Company with respect to a merger, consolidation
or other business combination with the Company;

and, in the judgment of Newco in any such case, and regardless of the
circumstances (including any action or omission by Newco) giving rise to any
such condition, makes it inadvisable to proceed with such acceptance for
payment or payments.

The foregoing conditions are for the sole benefit of Newco and
Parent and may be asserted by Newco or Parent regardless of the circumstances
giving rise to any such condition or may be waived by Newco or Parent in whole
or in part at any time and from time to time in their discretion. The failure
by Newco or Parent at any time to exercise any of the foregoing rights shall
not be deemed a waiver of any such right; the waiver of any such right with
respect to particular facts and other circumstances shall not be deemed a
waiver with respect to any other facts and circumstances; and each such right
shall be deemed an ongoing right that may be asserted at any time and from time
to time.

A-3

<PAGE> 1

AMENDMENT NO. 1, dated as of May 27, 1994 (this "Amendment"),
to the Agreement and Plan of Merger, dated as of May 21, 1994, by and among
SANDOZ LTD., a corporation organized under the laws of Switzerland ("Parent"),
SL SUB CORP., a Delaware corporation and an indirect wholly owned subsidiary of
Parent ("Newco"), and Gerber Products Company, a Michigan corporation (the
"Company").

W I T N E S S E T H:

WHEREAS, Parent, Newco and the Company have entered into an
Agreement and Plan of Merger, dated as of May 21, 1994 (the "Merger Agreement";
capitalized terms not defined herein have the meanings ascribed to them in the
Merger Agreement); and

WHEREAS, Parent, Newco and the Company desire to amend the
Merger Agreement as set forth herein.

NOW THEREFORE, in consideration of the premises and of the
mutual agreements and understandings hereinafter set forth, the parties hereto
agree as follows:

SECTION 1. Amendments to Merger Agreement. The Merger
Agreement is, effective as of the date hereof, hereby amended by deleting the
fifth sentence of Section 1.1(a) in its entirety and replacing such sentence
with the following two sentences:

"Notwithstanding the foregoing, Newco shall, and Parent agrees
to cause Newco to, extend the Offer at any time and from time
to time up to November 30, 1994 if at the initial expiration
date of the Offer, or any extension thereof, the condition to
the Offer requiring approval of the New York Department (as
defined herein) for Parent's indirect acquisition of GLIC (as
defined herein) (the "Insurance Condition") is not satisfied
or waived; provided that (i) any such extension shall be for
only such period as Newco shall determine is reasonably
necessary in light of the circumstances then prevailing
related to satisfying such condition, (ii) any extension to be
made before August 10, 1994 may not extend the Offer beyond
August 24, 1994 and (iii) unless waived in writing by the
Company, any extension to be made on or after August 10, 1994
may not be for a period in excess of 10 Business Days. If the
Insurance Condition has been satisfied or waived after June 30,
1994 and the Offer is not due to expire within 15 Business
Days of the date the Insurance Condition was satisfied or
waived, to the extent permitted by applicable law, Newco shall
promptly amend the Offer to cause the Offer to expire on a
date not more than 10 Business Days from the date of such
amendment."
<PAGE> 2
2

SECTION 2. Effect of Amendment. Except as and to the extent
modified by this Amendment, the Merger Agreement shall remain in full force and
effect in all respects.

SECTION 3. Governing Law. This Amendment shall be governed
by, and construed in accordance with, the laws of the State of New York
applicable to contracts executed in and to be performed entirely within such
state.

SECTION 4. Counterparts. This Amendment may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 1 to the Merger Agreement to be executed by their respective duly
authorized officers as of the date first above written.

Attest: GERBER PRODUCTS COMPANY

/S/ By: /S/ STEPHEN R. CLARKE
- --------------------- ---------------------------
Name: Stephen R. Clarke
Title: Vice President

Attest: SANDOZ LTD.

/S/ By: /S/ WERNER WIDNER
- --------------------- ---------------------------
Name: Werner Widner
Title: Assistant Vice President

/S/ By: /S/ DR. MARTIN CH. BATZER
- --------------------- ---------------------------
Name: Dr. Martin Ch. Batzer
Title: Assistant Vice President

Attest: SL SUB CORP.

/S/ By: /S/ ROBERT L. THOMPSON, JR.
- --------------------- ---------------------------
Name: Robert L. Thompson, Jr.
Title: Vice President and
Secretary