[LETTERHEAD OF XXXXXX, INC.]
March 8, 2000
Dear Fellow Stockholder:
I am pleased to inform you that on February 25, 2000, Xxxxxx, Inc.
('Xxxxxx') entered into an Agreement and Plan of Merger (the 'Merger Agreement')
with Cosmair, Inc. ('Cosmair') and its wholly-owned subsidiary, Crayon
Acquisition Corp. ('Purchaser'), pursuant to which Purchaser is commencing a
cash tender offer (the 'Offer') to purchase all of the issued and outstanding
shares of Class A Common Stock of Xxxxxx at a purchase price of $5.20 per share
in cash. Purchaser is the U.S. subsidiary of L'Oreal, S.A. of Paris, France.
Following the successful completion of the Offer, in accordance with the terms
of the Merger Agreement, Purchaser will merge with and into Xxxxxx (the
'Merger') and Xxxxxx will continue as the surviving corporation wholly owned by
Cosmair. Each share of Xxxxxx Common Stock not purchased in the Offer will be
converted in the Merger into the right to receive $5.20 per share (or any
greater amount paid in the Offer) in cash, without interest. Concurrent with the
signing of the Merger Agreement, Xxxxxx stockholders owning in the aggregate
approximately 48% of the shares outstanding on a fully-diluted basis (which
represent approximately 88% of the voting power of all shares of Xxxxxx Common
Stock outstanding) entered into a Stockholders Agreement with Xxxxxx, Cosmair
and Purchaser pursuant to which these stockholders have agreed to tender their
shares in the Offer, or if necessary, to vote their shares in favor of the
Merger.
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY (WITH THREE DIRECTORS ABSTAINING)
DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE OFFER AND THE MERGER, TAKEN TOGETHER, ARE FAIR TO, AND IN THE BEST
INTERESTS OF, THE STOCKHOLDERS OF XXXXXX, AND RECOMMENDS THAT ALL STOCKHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
In arriving at its recommendation, the Board of Directors gave careful
consideration to a number of factors which are described in the enclosed
Schedule 14D-9, including, among other things, the opinion of PaineWebber
Incorporated to the effect that the $5.20 per share cash consideration to be
received by Xxxxxx stockholders pursuant to the Offer and the Merger is fair,
from a financial point of view, to such stockholders.
In addition to the attached Schedule 14D-9 relating to the offer, enclosed
is the Offer to Purchase, dated March 8, 2000, of Purchaser, together with
related materials, including a Letter of Transmittal to be used for tendering
your shares of Class A Common Stock in the Offer. These documents set forth the
terms and conditions of the Offer and Merger and provide instructions as to how
to tender your shares. I urge you to read the enclosed materials carefully.
On behalf of your Board of Directors, I thank you for your continued
support.
Sincerely yours,
/s/ Xxxxx Xxxxx
Xxxxx Xxxxx
Chairman of the Board
